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Akron Estate Planning Law Blog

More states rolling back estate taxes

As many of our readers know, the federal estate tax exemption is currently $5.34 million, the highest it has ever been. This provides taxpayers with an excellent opportunity to pass on wealth with little fear of taxation except for the most wealthy. As a result, estate planners—who normally spend a significant amount of time helping folks devise strategies to avoid estate tax—are finding their focus shift to other aspects of the estate planning process. Theoretically, estate tax is still a potential issue at the state level and this should be kept in mind, but many states are taking steps to ease off on estate and inheritance taxes as well.

Maryland is reportedly the latest state to make significant efforts to reduce the estate tax burden on its residents. Measures in both the Maryland House and Senate aim to put the state estate tax exemption on a level comparable to the currently large federal estate tax exemption. Although the measure does not get rid of an inheritance tax assessed on some individuals, it does provide significant relief. 

Estate planning and the DIY approach—be cautious

Do-it-yourself, or DIY, projects can be challenging, fun, and a learning experience for people to engage in. But those who have done even a bit of DIY know that it is important to know one’s limits. Without honoring the limits of your knowledge and skill in a DIY project, you could end up with a substandard product, or worse, a product that is hazardous to yourself, your family and others.

There is an analogy here with estate planning. Surely there are some aspects of estate planning that can be done without expert help, provided one researches the issue a bit. There are other aspects of estate planning, however, that one should really have some sort of expert guidance with. This is particularly the case with more complicated estates, though do-it-yourselfers can overlook things on even simple estate plans. 

Popularity of long-term care insurance has decreased

Planning for retirement can be an unsettling thing for many Americans. After all, the costs of medical care and assisted living are high and constantly increasing, and it is difficult or impossible for many people to imagine ever putting enough money aside to cover such costs. Many people assume that they will be able to rely on the state or federal government for their medical and long-term care needs, but welfare programs only pay for these costs in limited circumstances.

It is true, for example, that Medicaid does bay for basic long-term care costs, but one must have exhausted one’s assets in order to qualify for financial assistance. Obviously, this is not a good plan from an estate planning perspective, which is concerned with ensuring one’s ability to pass assets on to future generation’s and to protect them from creditors is maximized. 

Some basic elements of estate planning

When many people hear the term estate planning, they may think of writing a will, picking guardians for their children, or filling out an advance directive form. Those who have been through the process may have other ideas about estate planning. Those who have many years of experience in estate planning and work with people on their plans all the time know that the process is unique for each individual and changes over time as a person’s circumstances and needs change.

While estate planning cannot be broken down to an exact list of elements, there are some common elements in many estate plans. Here we’ll take a look at several. For many people, a will is kind of the foundation document of their plan. A will can do various things, but one of the obvious things it does is to set down in writing who gets which of your assets and who is in charge of managing your assets when you die. 

Long-term care insurance still a valid way to avoid depletion of estate

Retirement is a scary word for many Americans. From a financial perspective, planning properly for retirement is a big deal. But with medical and long-term care costs continually rising along with everything else, many Americans are unsure about how they can put enough money away to ensure a comfortable retirement and avoid depleting their estate to pay for these things.

One way to manage this project, at least from the standpoint of the costs of long-term care, is to invest in long-term care insurance. Because medical and long-term care costs can eat into one’s savings, purchasing such insurance has been viewed as a wise investment for those who can afford it. That being said, long-term care premiums are not as cheap as they used to be, leading to fewer Americans taking advantage of this option in recent years.  

The lessons of celebrity estate planning

We ordinary folks can often learn a thing or two from those who have significant wealth. The celebrities have been known to have both good and not so go estate plans. Lessons can be found in both types of examples. A recent Forbes article explored this topic, giving specific examples of celebrity estate planning lessons.

These lessons vary widely, and include the ideas of being creative in estate planning, benefitting from properly established trusts, updating estate planning documents, and planning to avoid family fights over assets. Although these lessons arise in the context of estates with substantial assets, they often apply to smaller estates as well. 

It's not too early to consider estate planning

One common excuse for not making an estate plan is age. Many people think being young excuses them from having to prepare for the possibility of death. It may be that they feel invincible or think they don’t have any assets to transfer, but statistics show otherwise.

According to the Social Security Administration, one out of eight of today’s 20-year-olds will die before they turn 67. That really puts things into perspective. With that in mind, there is no time like now to start your estate plan.

How can a life estate protect your property?

Although it may seem overwhelming, there are many options when it comes to putting together your estate plan. In many cases, Ohio residents would prefer to avoid probate, so they work with an estate lawyer to create the perfect plan for their situation.

While there are many assets to consider, a very important one to most people is their house. Whether you have lived there five years or thirty years, it's important to make a plan as to what will happen with the home if you pass away.

Tips for Ohio seniors on long-term care insurance

Long-term care insurance is not a new idea, but it's one that many people are uncomfortable even discussing with their families. It can be difficult to talk to your loved ones about estate planning, guardianships, powers of attorney and other end-of-life needs. However, without a solid long-term care plan, your wishes may not be realized if you become incapacitated.

There are a lot of factors to consider before purchasing long-term care insurance. However, you should realize what this type of insurance does and doesn't cover. It's not an insurance plan for medical care. Instead, it covers the cost of helping the insured with their daily life activities, such as bathing, walking and eating. Depending on the type of plan you choose, the insurance may begin up to 100 days after you are in need of it and it might end in three or four years. The length of the policy is generally determined by when the insurer pays out a specific amount.

Paul Walker walked estate planning path, with some missteps

It might have been his sparkling blue eyes and dimples that helped make Paul Walker a star, but it was his apparent estate planning wisdom that has created a relatively simply setup for his loved ones after his unfortunate death.

On Nov. 30, Walker was riding as a passenger in a car that was going way too fast. Going a reported 100 MPH, the car crashed, killing the 40-year-old star of the Fast & Furious movie franchise. The irony of how Walker died shows how life can be unpredictable, which is exactly why creating a will and/or trust is necessary.

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