Ohio Probate Lawyer Blog

Can a Prenup Prevent Inheriting From Your Spouse?

Many, if not most people intend their spouse to be the primary beneficiary of their estate. But there are also many situations in which it makes sense to limit a spouse’s inheritance. Maybe you have family wealth or an interest in a family business that you want to remain in your family of origin if you should die. Perhaps you and your spouse are marrying later in life, and have each accumulated significant assets on your own. You might have children from a previous marriage that you would prefer to inherit your assets; a prenup can protect your child’s inheritance in the event that you predecease your spouse. Whatever your motivation, a prenuptial agreement can be a valuable estate planning tool.

If your first thought when you hear the word “prenup” is divorce, you’re not alone. But a prenuptial agreement is nothing more than agreement between a couple before their marriage as to how they will approach issues (usually financial) during their marriage. While a prenup does deal with how the couple’s property will be treated in a divorce, it can also address what… Read More

When Should a Personal Representative Be Removed?

When an Ohio resident dies, a personal representative must be appointed to administer their estate. If there was a will, the probate court often appoints the executor named in the will. If the deceased did not have a will, the court will appoint an administrator (typically a close family member) to serve as personal representative of the estate.

The personal representative is a fiduciary — someone obligated to act in the best interests of another party, rather than their own. In the case of a decedent’s estate, this person is obligated to follow the law and act in the best interests of the heirs or beneficiaries of the estate. Most representatives take their fiduciary duties very seriously. Sometimes, though, an executor or administrator commits a breach of fiduciary duty, or there is so… Read More

The Use of Domestic Asset Protection Trusts to Protect Assets from Creditors

Many people who establish trusts want to do so in order to protect assets for their loved ones. But there are many types of trusts, and not all of them protect against the same types of risks. All trusts keep assets out of probate. Depending on how they are structured, trusts can be used to reduce taxes, provide for loved ones with disabilities or special needs, benefit a favorite charity, and more. But if you are looking to protect assets from your beneficiaries’ creditors, you may need a domestic asset protection trust (DAPT).

Made possible by the Ohio Asset Management Modernization Act (OMMA) of 2012, the Ohio Legacy Trust Act (OLTA) became law in 2013. permitting the creation of domestic asset protection trusts (also called “Ohio Legacy Trusts” in Ohio. People who live in states that do not allow DAPTs can still create one in a state that does, if the trust complies with that state’s laws. Of the states that do allow DAPTs, Ohio consist… Read More

Changes to Ohio Guardianship Law in 2021

Ohio guardians have many responsibilities with respect to incapacitated adults on whose behalf they are acting. Guardianship rights are carefully calculated to give guardians the freedom to act for their wards’ benefit, without giving them excessive powers that could be abused.

For example, guardianship rights include the right to make and manage investments on the ward’s behalf, manage the ward’s real estate, and collect debts that are owed to the ward. Ohio Revised Code Section 2111.50 also gives the guardian the right to do some limited estate planning on the ward’s behalf. In August of 2021, that right was expanded somewhat, and procedural safeguards were put in place to protect the ward and other interested parties. Let’s discuss expanded guardianship rights regarding estate planning and managing a ward’s estate in Ohio.

Prior Limitations on Ohio Guardianship and Estate Planning

ORC Section 2111.50, prior to its amendment, granted a guardian the same powers that the ward would be able to exercise on their own behalf, if the war… Read More

Protecting Your Beneficiaries’ Assets from Creditors

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.

Creditors’ Rights and Powers of Withdrawal

There are a number of common scenarios from which settlors (creators) of such trusts hope to protect their beneficiaries’ assets. Trusts can pr… Read More

Baby, You Can Drive My Car (Without Reducing Your Surviving Spouse Benefits Allowance)

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

An Executor’s Duty to Identify Possible Heirs

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

How to Prove You Are Next of Kin

Most people have heard the term “next of kin,” usually in connection with a deceased person. Who is “next of kin,” and why does it matter? In the probate setting, it is important to identify someone’s legal next of kin when they have died without a will and their estate must be managed and assets distributed.

Next of Kin Rights and Responsibilities

If a deceased person (decedent) has died with a will, it almost certainly identifies a person whom the decedent selected to administer the probate estate. This person is often a close relative, but need not be. The executor named in the will has no legal authority to act on behalf of the estate until they are appointed by the court.

If there is no will, however, the decedent’s next of kin has priority to be appointed as administrator of the estate. The administrator has numerous responsibilities, including identifying all interested parties and notifying them of the probate proceedings; securing the property of the estate; and paying all legitimate debts of the estate before… Read More

“Exemption-Like” Strategies for Asset Protection

Attorneys who offer estate planning and business succession planning services are not just in the business of passing assets to the next generation. We are in the business of helping to protect those assets too. Asset protection involves ensuring that as many assets as possible are outside the reach of creditors and the bankruptcy courts.

While bankruptcy is sometimes necessary and/or the best option for a fresh financial start, it can expose hard-earned assets to seizure and liquidation by the bankruptcy trustee. It is not always possible to predict whether you (or one of your heirs or beneficiaries) will need to file for bankruptcy. But it is possible to take asset protection measures just in case.

Bankruptcy laws provide for certain types and amounts of properties to be “exempt,” placing them outside the reach of the bankruptcy trustee. In addition, there are certain strategies that are “exemption-like,” which end up offering similar protection.

Protecting an Interest in an LLC with an Executory Operating Agreement

For many individuals, their interest in a business is one of their most valuable assets, not only from a financial standpoint… Read More

What to Do When a Beneficiary is Living “Off the Grid”

These days, it seems you can find people, even those you haven’t seen in years, in a matter of moments. A quick internet search can find that long-lost friend or second cousin, yielding social media accounts, emails, phone numbers and even physical addresses. It may feel as if it is impossible to escape the sticky tendrils of the aptly-named “world-wide web.” Even in death, digitized Social Security death records, ancestry sites, and websites like findagrave.com mark a person’s existence and passing.

Most people, when creating or updating a trust, don’t anticipate the possibility that one of their beneficiaries will simply disappear without a trace. Yet this very outcome happens with disturbing frequency. Online trails may go cold, and there may be no conclusive evidence that a beneficiary has died. What happens to a trust when a beneficiary is living off the grid, or perhaps not living at all?

How Does a Beneficiary Disappear?

It may seem impossible that someone who is the beneficiary of a trust would walk away from thousands or hundreds of thousands of dollars,… Read More