» Trusts

A trust is a legal tool that splits legal ownership of assets from the ability to benefit from those assets. In a moment, we'll get to the question of why anyone would want to do that. First, let's talk about how a trust works.

A trust involves three roles: the grantor, also known as the trustmaker; the trustee; and the beneficiary or beneficiaries. For living revocable trusts, commonly called "living trusts," the same person can serve in all three roles, at least initially. The grantor creates and funds the trust by putting assets in the trust's name. The trustee manages the assets and distributes them for the benefit of the beneficiary. If you create a living trust to hold your assets, you can continue to manage and use them just as if they were in your own name.

Why Should You Have an Ohio Trust?

Which brings us back to the question: if you can manage and use the assets in a living trust just as if they were in your own name, why create a trust at all? Why not keep the assets in your own name? As it turns out, there are… Read More

If you have family members who depend on you, you know you should have life insurance. But should you have a life insurance trust? Most people don't, but more people should.

What is a life insurance trust? An irrevocable life insurance trust (ILIT) is a trust that is established for the ownership and control of a life insurance policy, whether whole-life or term. In order for an ILIT to be effective, the settlor or grantor of the trust (usually the person whose life is insured by the policy held in trust) may not have any "incidents of ownership" in the policy.

As the name suggests, the trust cannot be revoked, meaning the insured person is no longer the owner of the policy. The ILIT manages anything to do with the policy during the insured's lifetime, and manages and distributes benefits paid out upon the insured's death. An ILIT may contain an individual policy, or a "second-to-die" policy which pays out when the second person in a couple dies.

You may be among the people who should consider an ILIT if any of the following apply to you:

You Want to Avoid Gift Taxes.

An ILIT can be drafted to avoid gift taxes if it is set up like a Read More

If you are the beneficiary of a trust, you have certain rights under Ohio law. Exactly what these rights are depends somewhat on the type of trust you expect to benefit from. Many people create revocable living trusts during their lifetime, with their descendants named in the trust document as beneficiaries after their death.

Frequently, with a revocable living trust, the creator of the trust (also known as the grantor, settlor, or trustmaker) not only funds the trust, but serves as both trustee and beneficiary during their lifetime. The word "revocable" in the name of the trust means, simply, that the settlor can revoke the trust at any time, destroying the interest of any future beneficiaries. Under these circumstances, the beneficiaries have very few rights. They cannot compel the grantor not to revoke the trust, or to manage assets in a certain way.

After the settlor dies, however, the trust is no longer revocable. A successor trustee takes over, and the named beneficiaries do have rights. The trustee is obligated to meet them

Rights of Beneficiaries to an Ohio Trust

Knowledge, it is said, is power, and a trust beneficiary's primary right is to… Read More

If you have accumulated significant assets during your lifetime, you may be thinking about the best way to preserve them from future creditors, including lawsuit creditors. A third-party irrevocable trust could be the answer, but it's not right for everyone. How can you tell if it is best for your asset protection needs?

First of all, what is a third-party irrevocable trust? Let's break down the name. Any trust involves a person creating the trust (the grantor) entrusting property to someone (the trustee) to manage for the benefit of someone (the beneficiary)

If a trust is a "third-party" trust, that means that the grantor who is creating and funding the trust is not the beneficiary; in other words, unlike an Ohio Legacy Trust, the trust is created and funded by a third party. If the third-party trust is irrevocable, that means that the grantor cannot revoke the trust (at least not without permission of all beneficiaries) and take back the assets in it. So, although an irrevocable third-party trust has advantages we will… Read More

If you are planning for the benefit of a child with special needs, you may have heard the expression "pooled trust." What is a pooled trust, and when is it in your loved one's best interests to use it?

A pooled trust is a trust that has been set up and is administered by a non-profit organization. While each beneficiary of a pooled trust has a separate account for their benefit, all funds in the trust are pooled for purposes of management and investment.

In the event of the beneficiary's death, if funds remain in their individual subaccount, the trust is required to reimburse the state for any Medicaid support provided to the trust beneficiary. The amount of reimbursement may be any amount up to the total amount of Medicaid assistance provided, to the extent that the funds are not retained by the pooled trust.

When Should a Pooled Trust Be Used?

Pooled trusts can… Read More