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.
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
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.
For many individuals, their interest in a business is one of their most valuable assets, not only from a financial standpoint… Read More
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.
Any family can have conflicts over healthcare dec… Read More
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.
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
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.
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
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.
Essentially, cryptocurrency is a digital form of currency—digital cash, if you will—that e… Read More
One of the first things many people ask when talking to an estate planning attorney is “How much does it cost to make a will?” On its face, it’s a reasonable question: legal services can be expensive, and people naturally want to know what they will be spending. But it’s not the best question to ask when you are looking to create a will or an estate plan, and it’s certainly not the first one you should be asking. And while a good estate planning attorney will let you know what to anticipate as far as the cost of your estate plan, most lawyers worth their salt won’t be able to answer this question—at least, not right off the bat.
In fact, you should be very hesitant to hire an attorney who gives you a firm answer to the question “What do you charge for a will?” It would be kind of like walking into a hospital and asking, “What do you charge for a surgery?” In that case, the answer should certainly vary depending on whether you need a mole removed or a heart-lung transplant. The hospital staff isn’t going to just give you a price. They are going to ask you questions about your health, and run tests to determine your condition. Similarly, in… Read More
As this blog post is being written, and possibly as you read it, the United States is in the grip of the coronavirus pandemic. The pandemic has led many people to think about their estate planning in light of COVID-19. The coronavirus also has many of us working and learning remotely, leading to the realization that many things we are used to having take place in person can take place electronically.
It was only a matter of time before someone tried to write a will on an electronic device, and before the validity of that will was questioned in court. In fact, such a case arose in Ohio several years ago. A man named Javier Castro dictated his will to his brother. The brother transcribed the will on an electronic tablet. Javier himself signed the will on the tablet with a stylus; two witnesses signed the tablet, affirming his signature.
In 2013, the Lorain County Probate Court ruled that the will was valid. Ohio wills are required to be in writing, and the court concluded that the electronic writing met that requirement. Ohio wills also must be witn… Read More
Estate planning attorneys have a saying: “It’s never too soon to make an estate plan, but soon, it could be too late.” That’s not just a clever slogan used to generate business, and unfortunately, the emergence of a novel coronavirus has demonstrated the truth of this expression.
The good news is that the great majority of people who contract this virus do recover (even if they must suffer some misery in the meantime). The bad news, which has been splashed across TVs, radios, newspapers, and the internet, is that some people don’t. The greatest death toll has been among the elderly, but no age group is immune.
This isn’t said to frighten you, but to empower you. If you are reading this right now, and your estate plan doesn’t fully address your needs, this is your opportunity to take steps to ensure that it does. We hope that the coronavirus does not have a serious impact on you or your family. But even if it doesn’t, you will benefit from taking these estate planning measures: