While in some cases the laws governing wills and trusts vary among the states, one of the primary estate planning goals remains consistent for individuals in Ohio and across the country. People want to leave something for their kids. Three of the basic ways to facilitate the transfer of an inheritance are by will, via a trust and pursuant to a beneficiary designation.
A will is a legal document that governs how a person's assets are to be distributed in the event of the person's death. The process of the judicial review of a will is called probate, and it may be inconvenient and expensive in some cases. Trusts generally avoid the time and money costs of probate, and they may allow greater flexibility than wills in structuring the terms of a distribution. Spendthrift provisions, for example, are not uncommon where there is a fear that an inheritance will be squandered by an heir.
A trust is a planning instrument that puts one individual or entity, called the trustee, in charge of assets held for the benefit of others, called beneficiaries. A trust may require the trustee to distribute an inheritance according to a predetermined schedule or for specified purposes. Certain types of assets are commonly transferred by beneficiary designation. Those who own life insurance policies, company retirement accounts or IRAs, for example, typically designate a beneficiary as part of the purchase or funding process.
Communication with beneficiaries may be helpful, for both the owner of the assets as well as for the planned recipients. An honest discussion about likely inheritances grants peace of mind and allows for due weight to the wishes of the beneficiaries. Individuals who have questions about leaving an inheritance may wish to consult an attorney for advice regarding the proper method of transfer for particular assets. An attorney with experience in estate planning may be able to help draft wills, trusts or other legal documents to suit the goals and circumstances of the client.