People in certain professions, like medicine and law, understand the value of asset protection because those professions are often the target of lawsuits. Others may not feel that their assets are vulnerable to a lawsuit. They may not have existing creditors, and they don’t expect to be sued—or that their children might be. In short, they are not concerned about creditors’ rights to their assets, because they don’t expect to have significant exposure.
But that would be a mistake. The truth is that any of us can find ourselves facing a situation in which a court rules that we owe someone else a lot of money. It is for that reason that discretionary trusts for asset protection have become increasingly popular. Discretionary trusts and trusts with spendthrift provisions are commonly used to protect beneficiaries’ assets from potential creditors.
Ohio law provides for a support allowance of $40,000 from the estate of a deceased person for a surviving spouse and/or minor children. If there are no minor children, or the minor children are also the children of the surviving spouse, the spouse will receive the entire allowance. If the deceased had minor children who are not also children of the surviving spouse, the probate court will equitably divide the allowance of support between the surviving spouse and minor children. This amount is sometimes referred to as a “spousal allowance,” “surviving spouse benefits,” or “family allowance.” It is considered a priority claim against the estate, meaning it is paid before most other claims.
The law also provides that the surviving spouse may select one or more automobiles titled in the deceased’s sole name and valued up to a total of $65,000. Any automobiles so selected are not to be included in an inventory of estate assets.
In recent years, there has been some ambiguity in the law about whether a spouse’s selection of even a single automobile should reduce the amount of the surviving spouse benefits. Legislative action that takes effect as of August… Read More
The probate process is full of language that is widely assumed to mean one thing, when it technically means something different or narrower. Executor duty generally consists of administering a deceased person’s (decedent’s) estate. In fact, an executor is the title given to someone tasked with managing the estate of a person who died with a will (testator).
Someone who died without a will is said to have died “intestate” and the person in charge of their estate is called an “administrator.” Administrators and executors collectively are called “personal representatives.”
Similarly, many people assume that an “heir” is someone who inherits from a decedent. What the term really means is a person who would be entitled by law to inherit from someone who died intestate, often a child or grandchild, but perhaps a parent, sibling, aunt, uncle, or cousin. (Spouses, while they have priority to inherit, are not considered “heirs.”) “Beneficiary” is the technical term for someone who inherits under a will or trust. An heir need not be a beneficiary (like a child who has been disowned). A beneficiary need not be an heir (like a friend named in a will… Read More