Ohio Probate Lawyer Blog

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

Benjamin Franklin famously said,"In this world nothing can be said to be certain, except death and taxes.” And while death puts a stop to many things, taxes is not one of them. In this blog post, we will take a look at when your estate has to file a tax return.

Let's clear up a few confusing issues first. Just because your estate may have to file a tax return doesn't mean that your estate is subject to estate tax. Estate tax and income tax are two different things, and for the purposes of this post, we will be talking about an income tax return for your estate. (Estate tax, by contrast, is levied only on the very wealthiest estates. If your assets total less than $11,180,000 in 2018, you probably won't have to worry about it.)

Unlike estate tax, many estates need to file an income tax return. At the moment of a person's death, their estate becomes a separate legal entity from them. If you are the personal representative of an estate, you will probably have to file a final income tax return for the deceased person (decedent) for the year in which they died, and also an income tax return for the estate.

For example, if your Uncle Bartholomew died on June 5,… Read More

If you have a loved one in a nursing home, there's a fairly good chance that they will receive Medicaid benefits at some point to help pay for their care. You probably know that Medicaid is also entitled to recover assets from your loved one's estate. The estate, for purposes of Medicaid estate recovery, includes all assets that a Medicaid recipient owned at death, regardless of whether it passed through probate. (This includes assets conveyed to a survivor, heir, or assign through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.)

What are the mechanics of the recovery process? How long does the state Department of Medicaid have to act in order to recover assets from an estate? Can Medicaid recover assets from an estate after it has gone through the probate process and assets have been distributed to the heirs or beneficiaries of the deceased?

How Medicaid Estate Recovery Works

The Medicaid estate recovery process is addressed in Ohio Revised Code §2117.061, §5162.21, and §5162.211. Under Ohio law, the person responsible for a… Read More

If you have family members who depend on you, you know you should have life insurance. But should you have a life insurance trust? Most people don't, but more people should.

What is a life insurance trust? An irrevocable life insurance trust (ILIT) is a trust that is established for the ownership and control of a life insurance policy, whether whole-life or term. In order for an ILIT to be effective, the settlor or grantor of the trust (usually the person whose life is insured by the policy held in trust) may not have any "incidents of ownership" in the policy.

As the name suggests, the trust cannot be revoked, meaning the insured person is no longer the owner of the policy. The ILIT manages anything to do with the policy during the insured's lifetime, and manages and distributes benefits paid out upon the insured's death. An ILIT may contain an individual policy, or a "second-to-die" policy which pays out when the second person in a couple dies.

You may be among the people who should consider an ILIT if any of the following apply to you:

You Want to Avoid Gift Taxes.

An ILIT can be drafted to avoid gift taxes if it is set up like a Read More

If you are the beneficiary of a trust, you have certain rights under Ohio law. Exactly what these rights are depends somewhat on the type of trust you expect to benefit from. Many people create revocable living trusts during their lifetime, with their descendants named in the trust document as beneficiaries after their death.

Frequently, with a revocable living trust, the creator of the trust (also known as the grantor, settlor, or trustmaker) not only funds the trust, but serves as both trustee and beneficiary during their lifetime. The word "revocable" in the name of the trust means, simply, that the settlor can revoke the trust at any time, destroying the interest of any future beneficiaries. Under these circumstances, the beneficiaries have very few rights. They cannot compel the grantor not to revoke the trust, or to manage assets in a certain way.

After the settlor dies, however, the trust is no longer revocable. A successor trustee takes over, and the named beneficiaries do have rights. The trustee is obligated to meet them

Rights of Beneficiaries to an Ohio Trust

Knowledge, it is said, is power, and a trust beneficiary's primary right is to… Read More

If you are serving as the guardian over the property of a legally incapacitated adult, you are well aware of the responsibilities involved in managing your ward's property. Under Ohio law, guardians are now able to enter into consent sales of real estate in guardianship cases, if the sale of the ward's interest in real property is in the best interest of the ward. This ability facilitates the process of selling real estate for the ward's benefit.

There are four requirements to allow a consent sale to take place. First, the ward's spouse, if any, and any person entitled to inherit the real property from the incapacitated person must consent to the sale of the property. This consent must be in writing and filed with the probate court. Most county probate courts have specific forms for this purpose.

Second, when all necessary consents are filed, a bond must be executed in an amount that the probate court deems sufficient. Third, the sale of the real property must be at least 80% of the appraised value of the property as determined within the two years prior to the sale.

Lastly, in order for a consent sale of real estate to take place in a guardianship case, nei… Read More

If you have accumulated significant assets during your lifetime, you may be thinking about the best way to preserve them from future creditors, including lawsuit creditors. A third-party irrevocable trust could be the answer, but it's not right for everyone. How can you tell if it is best for your asset protection needs?

First of all, what is a third-party irrevocable trust? Let's break down the name. Any trust involves a person creating the trust (the grantor) entrusting property to someone (the trustee) to manage for the benefit of someone (the beneficiary)

If a trust is a "third-party" trust, that means that the grantor who is creating and funding the trust is not the beneficiary; in other words, unlike an Ohio Legacy Trust, the trust is created and funded by a third party. If the third-party trust is irrevocable, that means that the grantor cannot revoke the trust (at least not without permission of all beneficiaries) and take back the assets in it. So, although an irrevocable third-party trust has advantages we will… Read More

Preventing will contests is something most people making a will don't think much about, but probably should. Picture a scenario in which the matriarch of a family dies and leaves behind two heirs: a daughter, and a granddaughter, child of the matriarch's late son. Now imagine that she left her granddaughter the great majority of her estate. The granddaughter claims that her grandmother did this of her own free will. The daughter with the reduced inheritance claims the granddaughter exerted undue influence on her grandmother, who was not of sound mind, to get her to change her will.

A lengthy and contentious will contest ensues, in which accusations are hurled, relationships are destroyed, and much of the estate is consumed in legal battles, rather than going to the heirs. In the end, the court makes a decision as to whether the matriarch's will was valid or procured by undue influence, and the heirs take the assets to which they are entitled, but with a sense of bitterness and loss.

Similar scenarios play out in probate courts in Ohio, and throughout the country, every day. The players may be different, but the story is the same: a will is challenged, heirs fight,… Read More