Ohio Probate Lawyer Blog

Serving as the executor of an estate can be a daunting prospect, especially if it's a large or complex estate, and particularly if you have never before served as executor. It is reasonable to be concerned about this responsibility, but you do not have to be overwhelmed. As attorneys who have guided executors through hundreds of Ohio probate matters, we have guidance to offer first time executors that we hope will set your mind at ease and make the probate process smoother. Here are some of the things people often wish they knew before serving as a first-time executor.

Set Aside Space for Estate Documents

Even before the probate estate is opened, you will begin accumulating documents relevant to the estate. These may be bills that have gone out to the deceased person (decedent) which need to be paid, mail, and receipts. You don't need to have a fancy filing system, but it will reduce your stress immeasurably to be able to quickly lay hands on any document that has to do with the estate.

Part of your job will be to keep meticulous records of any claims against the estate, estate income, and payments made by the estate. Even if your "filing system" is a larg… Read More

Trusts come in many forms and serve many purposes, including avoiding probate, protecting assets from creditors, and offering tax benefits. Many people also use trusts to protect beneficiaries whom they fear would not be able to manage assets if they inherited them outright. But what if you have a beneficiary that you trust to manage their financial affairs? You can still help them reap the other benefits of a trust while granting them more control over the assets in it. Learn how a Preservation Trust™ provides asset protection and income tax flexibility.

A Preservation Trust™ is more commonly known as a beneficiary-controlled trust. Beneficiary-controlled trusts are a subset of dynasty trusts. Using a Preservation Trust™, you can grant your beneficiary the authority to manage trust assets while still protecting the assets in the trust for their use and for that of future generations.

What is a Preservation Trust™ and How Does it Protect Assets?

A Preservation Trust™ is a trust in which the primary beneficiary also serves as the controlling, or primary, trustee. This allows the beneficiary to have nearly the same level of control over trust asset… Read More

What's the difference between taxable income and accounting income when administering a trust? Taxable income and accounting income may be different on paper, but they are both important, and it's important to understand how they differ.

What is Trust Accounting Income?

Trust accounting income, or TAI, is the income that is available to distribute to the income beneficiary of a trust. The formula for calculating TAI is all income of the trust, less expenses attributable to income.

Ohio, like most states, has adopted the Uniform Principal and Income Act (UPIA). This law allocates income and expenses as follows: operating income and expenses, depreciation of assets, interest, rents, royalties, and dividends are allocated to accounting income. Taxes on accounting income are also allocated to income. Capital gains and losses, capital improvements and extraordinary repairs to trust property, casualty gains and losses and insurance recoveries are allocated to principal. Taxes on trust principal are also allocated to the principal.

Why is it important to know exactly what the trust's accounting income is? Certain trusts (known as simple trusts) are require… Read More

You are probably aware of how expensive nursing home costs are in this country, and that they will likely only continue to increase. You may also know that in order to meet those rising costs, more and more nursing home residents need Medicaid to help pay for care.

Unless you've had a family member pass away after receiving Medicaid benefits to help pay for their nursing home care, you may be less aware of the Medicaid estate recovery program. Essentially, this program, instituted in Ohio a few decades ago, allows the state to recoup funds it paid out in Medicaid benefits from the estate of a deceased recipient. Even more recently, the state expanded the notion of what assets qualified as recoverable under the Medicaid estate recovery program. Whereas the Medicaid estate recovery originally could recover only probate assets, the state later implemented an "augmented estate" approach that allowed the Medicaid estate recovery program to claim against assets in which the Medicaid recipient had a legal interest in the moment before his or her death. These include living trusts, jointly held bank accounts, and jointly held real estate.

The expanded reach of the Medicaid… Read More

You may be familiar with Medicaid as a government program that provides funding for health care to people with limited income. You may also believe that, as someone who has worked and saved for all of your adult life, you will never fall into the category of individuals who need Medicaid assistance. Hopefully, you are right about that.

You might be surprised to learn that many people in a similar situation to yours have ended up needing Medicaid services for one reason: they have needed nursing home care for an extended period. Nursing home care is expensive—in some cases up to $100,000 per year or more—and it is not covered by Medicare except in certain limited instances. That means that when an individual's funds are depleted and they can no longer pay out-of-pocket for care, they may become eligible for Medicaid.

After a person who has received Medicaid dies, the State of Ohio has the right to file a claim against their estate to recover some or all of the assets paid out through Medicaid on their behalf. This is called "Medicaid estate recovery." All states that receive federal Medicaid funding are required by law to establish such an estate recovery progra… Read More

If you're at the stage of your life where you have spent decades working hard to build a solid financial future for your family, and are now in a position to make the lives of your adult children more financially comfortable, you may be wondering about the best way to go about that—for them and for you. Perhaps you're also wondering if a time is coming when you will need long-term care outside of your home. You don't want your assets to go to the nursing home; you want them to go to your family. Should you just go ahead and transfer assets to your children now? You could, but doing so is not without risk. Let's talk about some of the pitfalls of transferring assets to adult children.

Pitfall #1: Loss of Control

You would do anything for your children, and you believe they would do the same for you. So it doesn't occur to you to hesitate to transfer assets, even the deed to your house, to them. You have an understanding, implicit or explicit, that if you have a need, they will take care of you or even transfer the asset back to you. You might even have a "wink and a nod" agreement with them: the asset is theirs in name only, but really, you both intend that it i… Read More

Federal Medicaid law compels states to seek, when possible, reimbursement from individuals for Medicaid payments made on their behalf. There are a couple of mechanisms by which this happens. One of these is known as Medicaid estate recovery. When the law was written, the word "estate" was interpreted as the Medicaid recipient's probate estate. Your probate estate, of course, may exclude a lot of assets, including those held in trust, property subject to a life estate, and property held jointly with other people. As of 1993, states were given the choice to broaden the definition of estate to include these types of nonprobate assets to the extent of the Medicaid recipient's legal interest in the assets at the moment before their death.

In 2005, Ohio joined the ranks of several other states in adopting an expanded definition of what "estate" means within the context of Medicaid estate recovery. Unfortunately for Ohioans, that definition was as expansive as federal law allowed.

The resulting change meant that any of the deceased Medicaid recipient's probate assets were subject to recovery, along with nonprobate assets such as insurance benefits, trust assets, and payab… Read More

A trust is a legal tool that splits legal ownership of assets from the ability to benefit from those assets. In a moment, we'll get to the question of why anyone would want to do that. First, let's talk about how a trust works.

A trust involves three roles: the grantor, also known as the trustmaker; the trustee; and the beneficiary or beneficiaries. For living revocable trusts, commonly called "living trusts," the same person can serve in all three roles, at least initially. The grantor creates and funds the trust by putting assets in the trust's name. The trustee manages the assets and distributes them for the benefit of the beneficiary. If you create a living trust to hold your assets, you can continue to manage and use them just as if they were in your own name.

Why Should You Have an Ohio Trust?

Which brings us back to the question: if you can manage and use the assets in a living trust just as if they were in your own name, why create a trust at all? Why not keep the assets in your own name? As it turns out, there are… Read More