What Ohio Families and Business Owners Should Know About Estate Planning

Estate planning is one of those things that is easy to put off.

You may think you have plenty of time to figure it out, or you may assume estate planning is only necessary for people with substantial wealth. In reality, estate planning can be valuable for almost anyone who owns property, has financial accounts, has children or dependents, or simply wants to make their wishes known.

For Ohio families and business owners, estate planning can provide direction for what happens to assets, property, businesses, and other financial interests in the future.

It can also raise important tax questions.

While estate planning itself should be handled by an appropriately qualified estate planning professional, understanding the basics can help you have more productive conversations with your attorney, financial advisor, and tax professional.

What Is Estate Planning in Ohio?

At its simplest, estate planning is the process of deciding how your assets and responsibilities should be handled if you become incapacitated or after you die.

An estate plan may address:

• Who receives your assets

• Who can make financial decisions on your behalf

• Who can make healthcare decisions for you

• How your property should be distributed

• What happens to a business you own

• How certain assets should be transferred

• Your wishes regarding your family and dependents

The specific documents and strategies needed depend on your individual circumstances.

A Will Is Only One Part of an Estate Plan

Many people think estate planning begins and ends with a will.

A will is important, but it may be only one component of a comprehensive plan.

Depending on your situation, an estate planning attorney may recommend considering documents or strategies such as:

• Wills

• Trusts

• Powers of attorney

• Healthcare directives

• Beneficiary designations

• Business succession plans

Not every person needs every document or strategy. The goal is to create a plan appropriate for your circumstances rather than simply collecting legal documents.

Don't Forget About Your Beneficiary Designations

Beneficiary designations are easy to overlook.

Retirement accounts, life insurance policies, and certain financial accounts may pass directly to named beneficiaries. Those designations can have a significant impact on who ultimately receives those assets.

A common mistake is creating an estate plan but failing to update beneficiary designations after major life events.

Marriage, divorce, the birth of a child, or the death of a beneficiary can all be reasons to review your accounts and make sure your designations still reflect your wishes.

Estate Planning Is Especially Important for Business Owners

If you own a small business, your business may be one of your most valuable assets.

That makes succession planning an important part of thinking about your financial future.

Business owners should consider questions such as:

• Who would operate the business if you could no longer do so?

• Who would inherit your ownership interest?

• Should the business eventually be sold?

• How would ownership transfer work?

• What would happen to employees and customers?

• How would the value of the business fit into your overall estate?

These questions can become complicated quickly, which is why business owners should work with qualified legal and financial professionals when developing a succession strategy.

Estate Planning and Taxes

Taxes are another important consideration.

Depending on the size and structure of an estate, the assets involved, and applicable federal and state laws, transferring wealth can create tax considerations for an estate or its beneficiaries.

This is where communication between your estate planning attorney and tax professional can be especially important.

Your estate planning attorney can address the legal structure of your plan, while your tax professional can help you understand the potential tax consequences of financial decisions.

The two perspectives can work together to create a more complete picture.

Estate Planning Isn't Just for the Wealthy

One of the biggest misconceptions about estate planning is that it is only necessary for wealthy families.

In reality, an estate can include much more than investment accounts and expensive property.

Your estate may include:

• Your home

• Vehicles

• Bank accounts

• Retirement accounts

• Life insurance

• Personal property

• Investments

• Business interests

• Real estate

Even if you don't consider yourself wealthy, you may have assets and family responsibilities that deserve thoughtful planning.

When Should You Review Your Estate Plan?

Estate planning isn't necessarily a one-and-done process.

Major changes in your life can mean that an existing plan no longer reflects your wishes.

Consider reviewing your estate planning documents after:

• Getting married

• Getting divorced

• Having or adopting a child

• Losing a beneficiary

• Starting or selling a business

• Receiving a significant inheritance

• Purchasing substantial property

• Experiencing a significant change in your finances

Changes in applicable laws can also be a reason to revisit your plan with your attorney and financial professionals.

Where Tax Planning Fits Into the Bigger Picture

J. Hunter Company does not provide estate planning services, and estate planning documents should be prepared with an appropriately qualified estate planning attorney.

However, tax planning can be an important part of the larger financial picture.

Understanding your income, assets, business interests, and potential tax obligations can give you and your estate planning professionals better information when making long-term decisions.

At J. Hunter Company, our focus is on helping clients understand and manage the financial and tax side of their lives. With experience in bookkeeping, wealth management, business, and tax law, J. Hunter can help clients understand their financial position and prepare for tax-related considerations that may be relevant to their broader financial plans.

Start the Conversation Before You Need the Plan

Estate planning isn't about expecting something bad to happen. It's about making thoughtful decisions while you have the opportunity to make them.

If you haven't created an estate plan, consider speaking with a qualified estate planning attorney about your circumstances. If you already have a plan, periodic reviews can help ensure it continues to reflect your family, assets, and wishes.

And when estate planning decisions involve potential tax consequences, having accurate financial information and knowledgeable tax guidance can help you and your legal professionals make better-informed decisions.

What is estate planning?

Estate planning is the process of preparing for how your assets, financial affairs, healthcare decisions, and other responsibilities should be handled if you become incapacitated or after your death.

Is estate planning only for wealthy people?

No. Estate planning can benefit anyone who owns property, has financial accounts, has children or dependents, owns a business, or wants to establish how their affairs should be handled.

What documents are typically part of an estate plan?

Depending on your circumstances, an estate plan may include a will, trusts, financial powers of attorney, healthcare directives, and beneficiary designations. A qualified estate planning attorney can determine which documents are appropriate for you.

Does a will cover everything I own?

Not necessarily. Certain assets, such as retirement accounts and life insurance policies, may pass according to beneficiary designations rather than through a will. Your estate planning attorney can help you understand how your various assets will be handled.

Do business owners need estate planning?

Business owners should consider how their business interests would be handled if they became incapacitated or died. Business succession planning can help establish what happens to ownership and operations.

How does tax planning relate to estate planning?

Estate planning decisions can have tax consequences depending on the assets involved and applicable laws. Working with both an estate planning attorney and a tax professional can help ensure the legal and tax aspects of your financial plan are considered together.

Does J. Hunter Company provide estate planning services?

No. J. Hunter Company does not prepare estate planning documents or provide estate planning services. The company can, however, provide tax and financial guidance that may be useful when considering the tax implications of your broader financial and estate plans.