Sunday, March 27, 2011
By ADAM MAWSON
amawson@MorningJournal.com
LORAIN — A person’s passing should not be accompanied by squabbling and infighting among survivors. With the help of an attorney, estate planning can help assure that the deceased’ assets and wishes are handled as they wanted.
Attorney Richard J. Colella, of Colella &Weir P.L.L, 6055 Park Square Drive, Lorain, recommends some sort of estate planning for anyone with any type of substantial asset.
“It’s never really too soon,” he says. “I tell people as soon as you have kids you ought to be at least thinking about this. And almost everything you do at any time is changeable.”
But many people in their senior years still have no type of estate planning set up, which can lead to many problems when they die, especially when assets are split up.
“If you die without a will, then the question of who gets your assets is determined by a state statute,” said Colella. “It gets confusing for people and you really have to seek out legal assistance to make sure you know what’s happening.”
He advises that people take care of their final plans as soon as possible. While few like to think about dying, it is inevitable and fretting over an uncomfortable situation now can save many headaches for beneficiaries in the future.
“As people get older they’re more concerned about preservation of wealth, the effect Medicaid could have on their assets and their concerned about people taking advantage of them if they become incapacitated,” Colella said. “Don’t put it off. You may not feel comfortable talking about your final demise, but most of our clients when they get done and sign their documents, they have a big sigh of relief. The basic planning stuff is not a big financial burden and it can really give you some peace of mind.”
“We like to tell people that what were trying to do is make sure your assets go to who you want them to,” he adds. “The other thing we like to tell people we do is to try to set your affairs up so that they’re orderly. If you do pass away you can minimize time, hassle and expenses for those you leave behind.”
Colella said that typically, when he meets with a client he first takes the time to discuss their goals and then explains probate processes, and how taxes can affect their assets. Following the initial questions, the client is given a questionnaire for further information so that Colella can find the best option for the client.
“More than anything we want to make sure people understand what they’re doing and that’s why we don’t just have them in here, get some information, print up some documents and tell them to sign here,” he said.
Colella explains that different levels of planning accomplish different things, and they have different price points to them as well. Most people are well prepared with a simple will and health care directives, which can be pretty affordable.
He said a will can be set up within a week or two, but will ultimately depend on how quickly the client returns the information to their attorney.
Colella also recommends naming a trusted person to make health decisions on your part if incapacitated.
Similar to a will, but much more complicated, trusts help plan for specific instructions for assets. For instance, one can set up an allowance for a beneficiary who is bad with money.
However, the complications of a trust lead to a higher price tag and are more complex.
“When you get into a trust situation, you start talking about a much more expensive product than if you had a more simple estate plan,” says Colella.
He adds contrary to popular advertising, not everyone needs a trust.
“Trusts are more complicated and require a bigger effort on the client to understand what’s going on there. They have their benefits in certain situations and we certainly do a lot of trusts, but we also try to minimize the additional cost for people if a trust is not needed.”
Other options also include re-titling an asset so that instead of being governed by a will or trust, they’re governed by the title of an asset. For instance, if two people own a house, they can set it up so the ownership go directly to the other without going through probate court or a trust. Transfer on death affidavits and pay on death designations are also options that can be considered.
“Seek out a professional legal advisor to explain the options to you,” Colella recommends.
Some think that writing out their own will is an easy alternative. But Colella advises against doing so as people without legal expertise will likely make mistakes or leave language too vague. And where there’s room for interpretation, there’s room for fighting.
“When we come across a hand written will it’s a big pain for everyone involved,” he says. “The problem when you do that is that whatever they write down is not very clear, hard to interpret and becomes subject to all sorts of questions. There are some areas where you can self-help yourself, but writing a will is not one we recommend.”
After all the T’s are crossed and I’s are dotted, Colella said most people are finished with estate planning for their lives. He does recommend making changes as property or assets changes.
For those that move out of state to warmer climates in their senior years, Colella also suggests speaking with a lawyer in their new state, as laws can differ from state to state.
His last piece of advice is simply getting your estate planning in order now before it’s too late. Too late doesn’t just mean dying either.
“If you wait until something does happen to you and you’re incapacitated physically or mentally, it’s very difficult to do this type of planning,” he warns. “It’s good to have in place… just in case.”
