» Estate Planning

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

Why Transparency Matters in Estate Planning

You likely already understand how important it is to have an estate plan, especially if you have significant assets. You may even have a plan, carefully crafted in conjunction with your estate planning attorney to achieve your goals. There is one step you probably haven't taken, though: discussing your estate plan, and its context, with your heirs. Here's why transparency matters in estate planning, perhaps more than ever.

Your parents may not have discussed their estate planning with you, except perhaps in the most vague of terms, such as where to find their will when the time came. They may have felt uneasy telling you details of their estate plan, and you may have felt even more uncomfortable asking. In the not-too-distant past, money was not something polite people discussed, even among family.

But there may have been another reason for your parents' reticence: a confidence that when it came time for you to manage their estate, you would have the experience and presence of mind to do so. Ask yourself this: are your children prepared to manage the legacy you plan to leave them? If not, how do you plan to change that? The reality is that you cannot do so unless… Read More

What is a Joint Trust?

For various reasons related to tax issues and drafting challenges, joint trusts have not historically been popular with Ohio estate planning attorneys. Due to changes in tax law in the past several years (most notably an increase in the amount couples can exclude from estate tax), joint trusts have become a more attractive option for many couples. What is a joint trust, and should you consider having one?

Basics of Joint Trusts

All trusts have three roles: the grantor or trustmaker who creates the trust; the trustee who manages trust assets and makes distributions, and one or more beneficiaries, who receive distributions from the trust. A trust may be revocable during the grantor's lifetime, or irrevocable, meaning that the grantor gives up all control of assets once they are in the trust, and the grantor cannot revoke or amend the trust without the permission of all beneficiaries.

A joint trust is a revocable trust. Both parties to the trust are grantors of the trust, as well as both trustees and beneficiaries. In short, they have complete control over all trust assets, just as they did when those assets were in their own name before they were placed i… Read More

Top Mistakes in Making Beneficiary Designations

How will your assets be transferred to your loved ones after your death? Your first thought may be that your last will and testament will distribute your assets, and this may be true to an extent. Chances are, though, that you have assets that will pass to others because of the beneficiary designations you have made. And without realizing it, you could easily have made mistakes in making beneficiary designations.

Assets owned in your sole name will go through probate, but there are many types of assets that will not. These include assets in a trust; real estate or bank accounts held jointly with another person that have a right of survivorship, meaning that the survivor takes the asset; retirement accounts; life insurance policies; transfer-on-death (TOD) accounts; and payable-on-death accounts. All of these assets may be subject to one or more of the following mistakes. Have you made any of them?

Failing to Name a Beneficiary

What happens if you don't name a beneficiary on a retirement account or life insurance policy? The probable outcome is that the benefits will go through probate when you die. Not only does this create inconvenience, it could, in t… Read More

How a Preservation Trust™ Provides Asset Protection and Income Tax Flexibility

Trusts come in many forms and serve many purposes, including avoiding probate, protecting assets from creditors, and offering tax benefits. Many people also use trusts to protect beneficiaries whom they fear would not be able to manage assets if they inherited them outright. But what if you have a beneficiary that you trust to manage their financial affairs? You can still help them reap the other benefits of a trust while granting them more control over the assets in it. Learn how a Preservation Trust™ provides asset protection and income tax flexibility.

A Preservation Trust™ is more commonly known as a beneficiary-controlled trust. Beneficiary-controlled trusts are a subset of dynasty trusts. Using a Preservation Trust™, you can grant your beneficiary the authority to manage trust assets while still protecting the assets in the trust for their use and for that of future generations.

What is a Preservation Trust™ and How Does it Protect Assets?

A Preservation Trust™ is a trust in which the primary beneficiary also serves as the controlling, or primary, trustee. This allows the beneficiary to have nearly the same level of control over trust as… Read More

The "Augmented Estate" and How It Can Affect Your Family

You may be familiar with Medicaid as a government program that provides funding for health care to people with limited income. You may also believe that, as someone who has worked and saved for all of your adult life, you will never fall into the category of individuals who need Medicaid assistance. Hopefully, you are right about that.

You might be surprised to learn that many people in a similar situation to yours have ended up needing Medicaid services for one reason: they have needed nursing home care for an extended period. Nursing home care is expensive—in some cases up to $100,000 per year or more—and it is not covered by Medicare except in certain limited instances. That means that when an individual's funds are depleted and they can no longer pay out-of-pocket for care, they may become eligible for Medicaid.

After a person who has received Medicaid dies, the State of Ohio has the right to file a claim against their estate to recover some or all of the assets paid out through Medicaid on their behalf. This is called "Medicaid estate recovery." All states that receive federal Medicaid funding are required by law to establish such an estate recovery prog… Read More

Pitfalls of Transferring Assets to Adult Children

If you're at the stage of your life where you have spent decades working hard to build a solid financial future for your family, and are now in a position to make the lives of your adult children more financially comfortable, you may be wondering about the best way to go about that—for them and for you. Perhaps you're also wondering if a time is coming when you will need long-term care outside of your home. You don't want your assets to go to the nursing home; you want them to go to your family. Should you just go ahead and transfer assets to your children now? You could, but doing so is not without risk. Let's talk about some of the pitfalls of transferring assets to adult children.

Pitfall #1: Loss of Control

You would do anything for your children, and you believe they would do the same for you. So it doesn't occur to you to hesitate to transfer assets, even the deed to your house, to them. You have an understanding, implicit or explicit, that if you have a need, they will take care of you or even transfer the asset back to you. You might even have a "wink and a nod" agreement with them: the asset is theirs in name only, but really, you both intend that it… Read More