» Estate Planning

When Can You Modify a Trust for “Unforeseen Circumstances?”

It has always been possible for a court to modify a trust for unforeseen circumstances. Traditionally, a court could allow or order a trustee to deviate from a term of the trust if, due to circumstances not known to or anticipated by the trustmaker (settlor), complying with that provision would “defeat or substantially impair the accomplishment of the purposes of the trust…” 

Section 5804.12(A) of the Ohio Trust Code (OTC) gives even broader authority to modify a trust for unforeseen circumstances: “The court may modify the administrative or dispositive terms of a trust or terminate the trust if because of circumstances not anticipated by the settlor modification or termination will further the purposes of the trust.” 

Differences Between Ohio Trust Law and Common Law

Ohio law, which is based on the Uniform Trust Code (UTC), has three important distinctions from the traditional (common law) position. First, under Ohio law, a trust cannot only be modified for unforeseen circumstances, it can be terminated early. Second, Ohio law permits the court to mo… Read More

What Happens If My Heir Dies Before Me?

We tend to make our estate plans based on certain assumptions. Most of the time, we assume our children will outlive us, although we know that that doesn’t always happen. What happens if our assumption on that score proves incorrect? One question many people don’t stop to think—or find too painful to think—is “what happens if my heir dies before me?”

There are laws in place, called “anti-lapse statutes,” that are designed to prevent unintended consequences if that happens. For instance, let’s say you have three children, each of whom has three children of their own. When creating your estate plan, you make a will that divides your estate equally among your three children, “share and share alike.”

At the time you made the will, you probably weren’t anticipating that one of your children might die before you. If you did think of it, you might have assumed that your grandchildren would have inherited the share of your deceased parent.

But in Ohio, until recently, you might have been wrong about that.

Castillo v. Ott

A 2015 Ohio Supreme Court case highlighted a problem with Ohio’s anti-lapse statute. In that case, <… Read More

Electronic Wills and Ohio Probate Law

Think about the things you can do electronically that weren’t possible ten, or in some cases, even five years ago. You can order a pizza from your laptop, cash a check using your phone, monitor someone standing at your front door from miles away. You can sign, scan, and e-mail important documents. Can you, and should you, do your estate planning electronically? Let’s talk about electronic wills and recent updates to Ohio probate law.

The Problem With Electronic Wills

A typical will is printed on paper, and signed by the person making it (the testator) in front of witnesses, who also sign, attesting that the testator, who was known to them, was actually the person who signed the will. There are exceptions to this general rule—under some limited circumstances, a handwritten, unsigned will can be valid, for instance—but for many years, this has been the accepted standard.

This is not just the result of attorneys clinging to outdated ways of doing things. Generally, when the law requires people to “jump through hoops” to accomplish a legal goal, s… Read More

Estate Planning and Diminished Capacity

Estate planning attorneys are constantly telling anyone who will listen: “Make your estate plan now; don’t put it off.” Primarily, that is because life is uncertain. Even a young person in good health can be struck down by a sudden illness or accident. If that happens, it is so much easier on everyone involved to have that person’s wishes set forth in a written estate plan. But there are other reasons that we urge people not to put off their estate planning, and one of those is the risk that as they age, they will no longer have the legal capacity to make a binding estate plan. It can be painful to think about, but it’s important to talk about estate planning and diminished capacity.

In order to be legally capable of making a valid will in Ohio, the person making the will (the testator) must be able to:

  • Understand the nature of the business in which he or she is engaged;
  • Comprehend generally the nature and extent of his or her property;
  • Hold in his or her mind the names and… Read More

Estate Planning for Intellectual Property

Increasingly in the past several years, estate planning attorneys have come up against the need to plan for intellectual property when crafting an estate plan. Intellectual property consists of things such as patents, trademarks, copyrights, and trade secrets. The overarching goal of all of these is to allow the owner of the intellectual property (IP) to keep others from producing, using, or selling protected goods and services. Because intellectual property is intangible, estate planning for intellectual property poses some unique challenges.

The various different types of intellectual property are protected by somewhat different means. If you have invented a useful new tool, for instance, the process for protecting it with a patent is different than the process used by your author friend to copyright articles she has written. And if you want your invention, brand, writing, or other creation to continue to benefit your family or other beneficiaries after your death, it is essential to work with an attorney who can successfully plan for the transfer of your intellectual property rights.

Estate Planning and Intellectual Property Issues

When you set out t… Read More

Using Beneficiary Designations in Your Estate Plan

Your estate plan includes a last will and testament, and likely a living trust and powers of attorney. If your goal is to keep your assets out of probate and to provide for your children, you may be overlooking another tool for estate planning: beneficiary designations. Here's a guide to using beneficiary designations in your estate plan.

You probably have some assets with beneficiary designations already, such as life insurance policies. There are also other assets for which you can plan with beneficiary designations, and some documents, such as a divorce decree, that may require you to establish beneficiary designations on certain assets. By deliberately planning your beneficiary designations, you can ensure that your assets pass as you intend with a minimum of red tape.

Beneficiary Designations for Retirement Plans

If you are like many people, your retirement plans are some of your most significant assets. Most retirement plans, like 401(k)s and IRAs, pass through beneficiary designations, not through a will. If you have a 401(k), federal law says that your spouse is your beneficiary. Even so, it is advisable to name him or her as beneficiary on your… Read More

Estate Planning After Your Divorce

Every year, about two and a half million American marriages end in divorce, meaning about five million people have undergone a major change in their legal and family relationships. In the aftermath of your divorce being made final, it is tempting to have nothing to do with legal matters for a while. That's understandable, but you should make one more trip into a lawyer's office—an estate planning lawyer. Hopefully, you will live a long, happy, and healthy life after your divorce, but you will sleep better at night if you have an estate plan that lines up with your new reality. Let's talk about estate planning after your divorce.

Why You Should Review Your Estate Planning Documents Post-Divorce

When you made your estate plan, you probably did so with the idea that your spouse would be your primary beneficiary, and that he or she would administer your estate if you died. If you suffered an illness or accident that incapacitated you, you probably appointed him or her as your agent under a power of attorney, to make your medical and financial decisions.

At the time, those choices seemed reasonable. After divorce, they might seem like a nightmare scenario.… Read More

Ohio Gun Trusts: What You Need to Know

If you have made an estate plan, you have probably considered how you will dispose of property ranging from your home down to your wedding ring. But if you own certain firearms, you may need to take special steps to transfer them in a way that offers clarity and protects your loved ones from unwittingly violating gun laws.  Ohio gun trusts can streamline the transfer of firearms, making life simpler not only for your survivors, but for the executor of your estate.

What is the purpose of an Ohio gun trust? Primarily, to ensure compliance with federal law. Certain firearms are regulated by the National Firearms Act of 1934 (NFA), and by Title II of the Gun Control Act of 1968, a revision of the NFA. Weapons governed by these laws include short-barreled rifles, short-barreled shotguns (including sawed-off shotguns), machine guns, silencers, and grenades. Firearms covered by these federal laws may be referred to as "NFA firearms" or "Title II firearms."

NFA firearms are required to have a serial number and must be registered with the federal bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). These weapons may only be possessed and used by the registered own… Read More

Should You Create a Private Foundation?

If you have amassed significant wealth, either through inheritance, hard work, wise investments, or all three, you may be considering your legacy. Like many people with significant assets (including Bill and Melinda Gates), you may have concluded that it's not necessarily in your family's best interests to inherit a large sum. Wealth can offer security, yes, but also a sense of entitlement and sometimes a lack of motivation, as heirs know they won't need to work for their living.

In addition to concerns about excess wealth leading your descendants to a profitless life of leisure, you may want to set your heirs the example of making a real difference in the world with your wealth. To this end, you may have considered creating a private foundation. A private foundation is a charitable organization, often established by a family or individual, to lend support to charitable causes.

Private foundations are overseen by a board of directors or trustees. This governing body receives charitable contributions, is responsible for investment and management of the foundation's assets, and making grants to worthy charities. The board also handles administrative responsibilitie… Read More

Estate Planning for Separate Property

Something that is perfectly appropriate in one setting can be problematic in another. The casual outfit that is perfect for running errands could cost you a coveted job if you wore it to an interview, for instance. And the language used to describe property in your estate plan could, by the same token, cost you that property should you and your spouse later divorce. We certainly hope that divorce is not in your future, but if you came into the marriage with significant assets, or inherit assets during your marriage, you should ask yourself how you would feel about your spouse getting those assets in the event of a divorce. If the answer is, "not very good," you need to think about estate planning for separate property.

To understand separate property, you need to understand how property is divided in a divorce. In Ohio, as in most states, there are categories of property: marital and separate. Marital property is all property, real and personal, that is acquired by either spouse during the marriage, and any interest in such property. Marital property also includes most  income or appreciation on separate property that occurred during the marriage due to the contribution… Read More