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 progra… Read More
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.
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 i… Read More
There is a great need for estate planning for blended families. According to the U.S. Census Bureau, 1300 new stepfamilies are formed every day in the United States. Over 50% of families in the United States involve adults who are remarried or re-coupled. These so-called blended families can offer wonderful new relationships to people who are a part of them—and create tremendous conflict over inheritance when one of the partners in the couple passes away.
Even in so-called "intact" families, in which all the children are legally related to both of the parents, there can be conflict over inheritance, especially if one child receives more than another or is disinherited. In a blended family, the potential for conflict rises exponentially. There is sometimes unresolved hostility between one party's children and the new spouse, or between stepsiblings. Inequities, real or imagined, in the distribution of an estate can destroy what remains of relationships.
Picture, for example, a father who has told his adult children after the end of his first marriage that he's "leaving everything" to them when he dies. Then… Read More
If you're thinking about disinheriting a child, you probably have a good reason for considering this option. And while you aren't obligated to explain your reasons to anyone, letting your estate planning attorney in on your reasoning can help you best achieve whatever your aim is in disinheriting a child.
If, for instance, your child, like so many in this country, has fallen prey to addiction, you may be concerned about them using their inheritance for drugs. Obviously, that could have devastating effects for their health or even their life. In such a case, you may be able to create a trust that will pay directly for their living expenses and even drug or medical treatment. In that way, you could provide for them and promote their health without risk of their wasting their inheritance and without resorting to disinheriting them.
Of course, in some circumstances, there's no estate planning work-around; you genuinely want or need to disinherit your child. If this is the case, the answer is yes, it is possible to do this. It's also possible to attempt to disinherit your child and for them to wind up taking from your estate anyhow. Here's why, and how to make sure your… Read More
Providing financially for children and grandchildren is one of the most satisfying ways to use the assets you've spent a lifetime accumulating. Of course, you have made an estate plan to dispose of your assets after you're gone, but you want to be able to have the joy of giving while you're still alive. Not only does giving during your lifetime allow you to experience the gratitude of your beneficiaries, but making lifetime gifts can be an excellent way to reduce your taxable estate.
As of 2017, you can make a gift of up to $14,000 as an individual (or $28,000 for a married couple) to a child or grandchild each year without incurring gift tax liability on that amount. This gift can be used for their education, travel, even a down-payment on a house when the time comes. But how you give the gift has a significant impact on the benefit you and the beneficiary will get out of it.
You don't want to give a large financial gift directly to a minor child, as legal… Read More
We've written before in this space about choosing a probate and estate planning attorney.
Obviously it's important to choose someone who's experienced in estate planning and probate law and who is ethical. But beyond that, does it really make a difference whom you choose?
If one of the assets for which you're planning is a family farm, the answer to that question is an emphatic "yes!"
Family farms are not like other property, for many reasons. Leaving aside financial complexities, family farms, unlike many other assets, have a legacy, a family heritage attached to them.
While it's important to have an attorney who understands what your farm means to you, there is also much more to planning for a family farm than honoring sentimentality. Many economic factors affect the value of a farm from year to year, which could have an impact on estate tax. Like other family businesses,… Read More