The following article from the Columbus Jewish News, written by Kaitlyn Finchler, was published online 6/26/24. It is an excellent reminder that estate planning is not just for the wealthy.
“Prior to 1997, estate planning was mostly driven by people motivated to reduce their estate taxes, according to Mark Coffey, partner and senior financial adviser at Summit Financial Strategies in Columbus. The same year, people dying with an estate of $600,000 or more could face a federal estate tax of up to 55% and an Ohio estate tax of 6% or 7% for estates in excess of $338,333.
“In 2013, Ohio eliminated its estate tax and today the Federal Estate Tax only applied to estates over $13.6 million,” Coffey said.
Coffey said since the “exemption amount is so high,” and people no longer need to set up an “A/B Trust” arrangement to double the exemption for married couples, estate planning is less about saving estate taxes and more about planning for “who gets what at what time.”
“This means that having an estate plan today is something every person should consider regardless of their income or net worth if they own anything of value and care about how it is distributed at their death,” Coffey said.
Jim Bowman, senior vice president and financial adviser at Janney Montgomery Scott LLC in Columbus, said estate plans help avoid any uncertainty after one’s passing.
Bowman said there are six “key steps” to create an estate plan in Ohio: appoint a health care agent; appoint a financial agent; create a list of current assets; decide who the beneficiaries are; make an estate distribution form; and make sure estate documents are in a secure location
The difference between a will and an estate plan, Bowman said, is a will “governs how assets are split up,” while an estate plan says, “here’s what we have in mind.”
Sometimes clients will come to Coffey and say they don’t have a will, he said, but this is false.
“Everyone has a will in Ohio because the state has a law in place that determines how much assets are distributed at the death of everyone without a will,” Coffey said. “The law is very logical and basically provides for assets to pass to your spouse, children, parents, siblings and cousins. If one of those categories do not apply, assets pass to the next class.”
Coffey said he asks his clients to think about the people in those categories and whether or not they should be included – which typically prompts people to meet with an attorney to draft a will reflecting such information.
“For clients who are unmarried without children, I suggest they consider naming a charity such as (Jewish Columbus) as beneficiary for their estate and meet with their representative to discuss how they want their funds to be used at their passing,” Coffey said.
Even if someone has an estate plan with documents for finances, healthcare and end-of-life care, Coffey said, they may still need to meet with an attorney or financial planner to see if the plan needs to be updated under current law.
“I have seen many clients bring in estate documents written by the best estate attorneys in the city, only to discover none of their assets will ever pass under these documents,” Coffey said. “This is because joint assets and beneficiary assets such as life insurance, retirement plans and annuities do not pass through a will or trust, but instead to the joint party or beneficiary.”
The last paragraph says it all … people believe they have their affairs in order only to discover problems. When was the last time you had your estate plan reviewed and, if needed, updated? Or perhaps you don’t have an estate plan. It would be my honor to help you in either case. And I’d like you to know that my clients enjoy a complimentary estate plan review every three years. Life can come at you fast and create changes that can impact your estate plan. An outdated plan is sometimes worse than no plan at all. Please call me at 513-399-7526 or go online to www.davidlefton.com for more information.
Source: Columbus Jewish News 6/26/24 by Kaitlyn Finchler