» Estate Planning

Storing Your Estate Planning Documents

Estate planning documents are only useful if the right people can reach them at the right time. You want to store your documents in a place where they will be safe, yet accessible to the people you want to be able to find them (and not others). What should you think about when deciding where and how to store your estate planning documents?

Organizing Estate Planning Documents

The first step in organizing and storing your estate planning documents is to identify just what constitutes your estate plan. An estate plan can, and should, include more than just a last will and testament. Some of the documents that might be included in your estate plan are:

  • Last will and testament
  • Trust
  • Durable financial power of attorney
  • Medical power of attorney
  • Living will
  • Life insurance policies

In short, these are documents that your loved ones will need to access when you are unable to communicate their location, either because you are… Read More

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

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

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

“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

Who Makes Healthcare Decisions in a Blended Family?

If you were suddenly to become so ill that you couldn’t make healthcare decisions for yourself, who would make them on your behalf? This question has taken on a greater urgency than usual during the COVID-19 pandemic, in which people who have no symptoms on one day can be grievously ill less than a week later.

Many people assume that their next of kin, such as a spouse or an adult child, would make important healthcare decisions for them if the need arose. But what if you are in a blended family? Or if a spouse and adult child disagree, who takes priority?

Unfortunately, this is not an uncommon scenario, especially in second or subsequent marriages when the patient’s spouse is not the parent of the patient’s adult children. In that case, the question of who gets to make a decision about a patient’s health can be a thorny one. The consequences may literally be life-and-death; even if not, the dispute can cause a permanent rift in a family.

Issues in Healthcare Decision Making

Any family can have conflicts over healthcare dec… Read More

Inheritance and Divorce: How the Dissolution of Your Marriage Impacts Your Estate Plan

Families are constantly changing—sometimes through joyful events like marriages, births, and adoptions, and sometimes less happy ones, like a death or dissolution of a marriage. But too often, people plan for the future as if it will only contain happy events. Even when people do make an estate plan, they tend to ignore the very real possibility of a divorce down the road: either theirs, or their child’s.

Of course, unlike death, divorce isn’t inevitable. Even so, failing to take into account that a divorce could happen could have disastrous outcomes for family wealth. Our firm talks about inheritance and divorce in Ohio, and what you can do to protect your assets for the people you want to inherit them.

What Happens to an Inheritance in a Divorce?

As you know, in a divorce, the court divides up the couple’s marital property between them. But unless you have actually gotten divorced, you may not have thought much about what “marital property” is. In essence, “marital property” is any property that either spouse acquires during the marriage, with limited exceptions. In Ohio, one of th… Read More

“Payable on Death” and Your Financial Accounts

Here’s a riddle, and you may not find the answer funny: when does a beneficiary named in a will not get the assets left to them in a will? The answer is when the asset is payable on death to someone else. Ohio law authorizes individuals to enter into contracts with banks and other financial institutions to make the contents of a financial account payable to a designated beneficiary on the owner’s death. These are called “payable on death” or “POD” accounts if the funds are in a bank account. Brokerage accounts and other assets, like car titles and even real estate, may be “transfer on death” or “TOD.” POD and TOD assets operate similarly, with the same advantages and disadvantages.

Advantages of Payable on Death Accounts

At first glance, POD accounts appear to have a number of advantages. For one thing, they bypass probate court. Upon the death of an account holder, the designated beneficiary needs only to present… Read More

What Are Digital Assets and Cryptocurrencies in a Will?

Imagine if, at the moment of your death, a large portion of your assets just...vanished. Or that those assets continued to exist, but your loved ones couldn’t find them, access them, or maybe didn’t even know about them. The fruits of your labors, your careful investments, forever locked away from the people you meant to have them.

If that sounds like a nightmare scenario, you should know that it has already happened to some owners of cryptocurrency who died without creating an estate plan for their digital assets. Cryptocurrency is a type of digital asset. The best known type of cryptocurrency is Bitcoin, but there are others, such as LiteCoin and Ripple.

According to the BBC, research estimates that as of early 2020, up to 3.8 million Bitcoin, with a value of about $30 billion, has been lost. Much of the loss is due to owners of the cryptocurrency dying without giving heirs a way to access these digital assets.

How Does Cryptocurrency Work?

Essentially, cryptocurrency is a digital form of currency—digital cash, if you will—that e… Read More