What’s the Difference Between a Will and a Trust?

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By Chris Meyer

Many people think that Wills and Trusts are the same thing. Nothing could be further from the truth. While there are similarities, there are some very important differences. A Will is a very basic document that simply expresses the wishes of the deceased to the Probate Court. It does not avoid probate. The Executor who oversees the dispersement of the estate must follow a strict set of guidelines, keep meticulous records and report every action to the Probate Court. As such, these actions and the contents of the estate are a public record, in other words, they are NOT private. Any estate that is probated may be accessible to the public and with the convenience of the internet today, anyone may be able to access the details of a probated estate in many counties from the comfort of their own home!

The assets of a Trust on the other hand, completely avoid probate and public knowledge.The assets of a Trust on the other hand, completely avoid probate and public knowledge. A pre-appointed Trustee simply disperses the estate according to the wishes of the decedent which are outlined in the Trust. The Trustee does not have to report to the Probate Court and consequently the estate can remain private. In addition, the Trustee does not have to post bond. Other advantages of a Trust are that it can be customized for special situations, help maximize your estate tax deductions and even help you to preserve your assets from the Medicaid spenddown.

All estates are different, and there are many different types of Trusts that can be created in order to best suit your wishes after you pass away. If you would like to schedule a free one-hour consultation to see one of our attorneys, please contact our office at 1-800-798-5297. Our offices are located in Monroe, Sidney, Chillicothe, and Centerburg. Also, be sure to Like us on Facebook in order to keep up-to-date with our most recent blogs about a wide variety of estate planning and nursing home protection aspects.

How Can You Reduce or Avoid High Trust Taxes?

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By Sandra K. Dennison, CPA

A recent article in the Wall Street Journal describes a strategy to avoid taxes when you put money into a trust and when you take it out. Here’s a summary of how it works:

Distributes net income to lower tax bracket beneficiary

In cases where Mom & Dad’s trust has a higher tax bracket than their beneficiary’s, there is an opportunity to save tax dollars. Trusts have fewer tax brackets and higher tax rates than individuals who have more tax brackets and lower tax rates. Consider that a trust with as little as $12,150 in assets pays the maximum tax rate – 43.4% while individuals can earn over $400,000 before they pay 43.4%. It seems clear that paying at the individual tax rate is better than paying the trust rate, in most cases.

You also have the option to look at which tax strategy (trust or individual) makes the most sense – if you get it done in the first 65 days of the year. This extended “decision time” is only available to trusts and beneficiaries.

Although appealing, distributions should not be made just for the sake of tax saving and certainly not without expert counsel. Distributing funds from a trust could produce negative consequences that far outweigh the tax savings. Respect for the purpose of the trust is more important.

Read more at: “How a Trust Can Cut Taxes” written by Arden Dale for the Wall Street Journal.

How a Trust Affects Your Ohio Homestead Exemption

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By Tricia Applegate

Do I still qualify for the Homestead Exemption if my home is in a Trust? The short answer is yes, with a few provisions. The State of Ohio states:
You are eligible for the homestead exemption if all of the following are true:

  • You created the trust to be effective during your lifetime (an inter vivos trust)
  • You provided the assets for the trust (you are the settlor).
  • The trust agreement contains a provision that says you have complete possession of the property.

Revocable and irrevocable trusts may qualify. Most of the other common forms of property ownership (such as survivorship deeds) also qualify for the exemption. Properties owned by corporations, partnerships, limited liability companies and trusts, other than the trust described above, are not eligible for the homestead exemption because such properties are not owned by an individual.

If you have questions regarding your trust and the homestead exemption, please contact your estate or elder law attorney.


I Don’t Want My Daughter’s Ex-Husband to Get Any of My Estate!

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By Attorney Ted Brown

One of the many benefits of a Living Trust is that it allows you a great deal of flexibility to customize distribution of your assets at your death to avoid undesirable and unintended consequences. One such consequence is an ex-daughter-in-law (or ex-son-in-law) ending up with your assets instead of your grandchildren or remaining family members.

A Living Trust can be specifically drafted to state that, should your daughter pre-decease you, her share will not go to her ex-husband. In addition, the Trust can be used to ensure that her share will be used for the benefit of her children. If those children are minors, the Trust can be drafted to ensure that the funds are managed for their benefit by someone you designate.

Call us today at 1-800-798-5297 to set up a free consultation to learn more about how a Living Trust can help you plan for the unexpected and make sure your assets end up in the hands of your loved ones.