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An estate plan is key to preserving wealth for loved ones

On Behalf of | Jan 18, 2024 | Estate Planning

Many people with significant personal property take for granted the idea that they should have control over who inherits their property. Others simply assume that their family members should inherit regardless of whether they bother with estate planning or not.

While it is true that Ohio intestate succession laws help protect the rights of someone’s close family members, failing to think about what happens after someone dies can significantly complicate the probate process. The deceased individual has no control over who receives which  assets in particular.

The property that they want their loved ones to inherit could be at risk of creditor claims, including Medicaid estate recovery efforts. Those outside demands may actually reduce how much someone’s family members and selected beneficiaries inherit from their estate. Careful estate planning is there for crucial for those who want to maximize how much their loved ones inherit.

There are many outside sources of financial loss

Numerous parties with an interest in an estate technically take priority over someone’s beneficiaries during probate proceedings in Ohio. Creditors with a valid claim related to personal debt and tax authorities, along with the Ohio Medicaid program, are among those who can lay claim to estate resources before someone’s beneficiaries inherit anything. Federal estate taxes could reduce the value of someone’s estate by as much as 40%, and creditors could force the liquidation of all of someone’s assets, leaving nothing for their loved ones to inherit whatsoever.

As if that weren’t concerning enough, those who die without estate plans may also set their loved ones up for unnecessary conflict. Family members may fight over specific assets when they do not provide clear instructions about what should happen with their property. Litigation in probate court can prove to be quite expensive and may significantly reduce how much of someone’s property actually passes to their beneficiaries.

Proper planning can preserve assets

A thorough estate plan can help maximize someone’s legacy through several distinct mechanisms. Someone who provides clear instructions regarding the distribution of their assets can limit how much their loved ones fight over those resources. They can also take steps to protect their property from taxes and creditor claims. Estate planning can even help someone access Medicaid later in life to preserve property that might otherwise go to pay for their medical care.

The needs of each individual are unique, as are their family relationships and resources. People typically need to look carefully at their personal circumstances to determine the best estate planning strategies given their wishes and family needs. Making the decision to create a comprehensive estate plan is often a key step toward maximizing the legacy that someone leaves behind after their passing.