Central Ohio Estate Planning Blog

The Role of a Trustee

As a lawyer with extensive trust administration experience, I have seen that the death of a loved one, particularly if the deceased is a spouse or parent, is one of the most difficult periods in a person’s life.

At a time when the survivor is already struggling with loss and grief, the administration of the deceased’s trust can be an overwhelming and daunting task. That is why many beneficiary/trustees choose to “leave things the way they are” and ultimately take no action regarding the administration of their loved one’s estate. This is especially true if the trustee is the same person as the beneficiary.

Again, sheer overwhelm is one reason for this, but beneficiaries/trustees also hesitate to administer their loved one’s estate out of fear they will encounter expensive legal costs, endless probate, or tax situations they may not be equipped to handle. Whatever the reason, people have been known to delay for months, or even years. Unfortunately, most of these beneficiary/trustees are unaware of the legal and fiduciary responsibilities of their position.

Part of my job is making sure my client is thoroughly informed about what to realistically expect from the trust. Most clients appreciate that assets held in trust are much easier to administer and distribute after death than through the probate process, but they also need to know that the successor trustee is required by law to do many things before the distribution of assets can occur. 

As the requirements and obligations for trust administration can vary from state to state, it is important to be conscious of the role and the responsibilities for the beneficiary/trustee in Ohio.  Duties include, but are not limited to the following:

• Notifying beneficiaries
• Valuation and Liquidation of Assets
• Paying Debts and Taxes of the Trust
• Filing Tax Returns
• Distribution of Remainder of the Assets to Beneficiaries   

Additionally, it is compulsory for the trustee to follow the accounting and reporting requirements of the state and courts, and to be responsible for defending the trust against all claims of creditors or excluded heirs. Although the trustee may be unacquainted with all of these duties, an experienced trust lawyer knows exactly what is involved and can prepare forms and guide the administrator through the process.

That’s why for many people, having a lawyer who handles trust administration on their side makes this difficult time go more smoothly and eases the administrative burden of having to close out a loved one’s estate.   If you are now in this position and would like further information about how our firm can help you, please feel free to give our office a call and ask to schedule a complimentary consultation. 

Letting Your Teens Know Now About Their Inheritance

Depending on your family’s lifestyle, your teenage children may already have an idea of what would happen if you and your spouse were to pass away. They may not know the exact dollar amount of the money that they would inherit, but they probably have an idea of who they would live with and that they would receive most of your assets if something happened.

 

I know that many parents feel this information is sufficient enough for their minor children.  But having an open discussion with your teen can prevent them from being angry or confused if you have decided that he or she will not have access to their inheritance until they are a few years past the age of majority, such as 21 or 25 years old.

 

It is common knowledge that inheritances are distributed at the age of 18, unless the parents have set up a trust that makes the teen wait. If a teen anticipates these funds at 18, but discovers that you have made them wait until they are older, they might get the wrong idea and feel that you made the decision because you did not trust him or her. And with you not there to defend your decision, the teen could be upset and confused.

 

The best way that you can avoid this anger or confusion is to sit down and have a frank discussion with your teen.

 

Talk to them about the following issues:

 

- The amount of money that he or she is to inherit (you may also ballpark this figure)

 

- The age you feel is appropriate for the inheritance (i.e., 21 or 25 years old, etc.)

 

- The age that the teen feels is appropriate

 

- How you want the money to be spent, for example on college or the down payment on a house

 

- Whether there are other stipulations besides age for receiving the money. For example, you can set it up so that the teen can receive the money at any age, as long as he or she has graduated from college.

 

Doing what you can to eliminate secrets or surprises from your estate plan can not only bring your family together while you are still living, but it can make the grieving process easier for your kids after you are gone.

 

 

When Divorced Parents Can’t Agree on Legal Guardians

I can’t stress enough how important it is for all parents to create a comprehensive plan that will protect their children should the unthinkable occur.

But what happens if you are divorced and can’t come to an agreement with your ex-spouse as to who should raise your kids if something happens to you?  Should you go ahead and document your own guardianship wishes anyway?  And just whose wishes would hold up in court?

In most cases, if your child’s biological parent is still living at the time of your death and you share custody, your children will be raised by the surviving parent, unless there is some clear reason why that should not happen.

There is nothing you can do about this, unless you can prove that the child’s biological parent is unfit to raise your child and make a compelling case as to why your guardianship nominations should be honored under the circumstances.

Examples of this might include a severe drug addiction, criminal past or a history of abuse.

However, if this is unlikely, the next best thing to do is name guardians anyway so that your wishes for the care of your children will be known and taken into consideration should your ex-spouse should also pass away before your kids reach the age of 18.

This is especially important in the event your ex-spouse did not legally document his or her guardianship wishes upon passing, as your wishes would then be given priority over, say, an unwilling step-parent (just think back to the Cinderella story for a chilling example of this).

Finally, if you are a single parent and have concerns not only about guardianship, but also concerning your ex-spouse handling any assets you would leave to your kids if you passed away first, I encourage you to meet with an estate planning attorney right away so you can protect such funds and ensure they are used for your children’s care only in your absence. 

The Dangers of Do-It-Yourself Wills and Trusts

Trusts lawyers are seeing a growing number of online websites offering Do-It-Yourself legal documents and estate-planning software.

Surprisingly, most attorneys will tell you that there are some everyday forms where this approach makes good sense. However, when it comes to wills and trusts, a poorly executed document can cause more harm than doing nothing at all.

It’s important to realize that estate planning is a complex area of law, based on statutes that vary state by state and often change from one year to the next. Wills in this state have procedures and requirements that must be followed, and a wills lawyer in Central Ohio knows what those stipulations are. 

For example, all states require your will to be signed in the presence of at least two witnesses and they must sign in your presence and in the presence of each other. Something as seemingly trivial as improper witnessing procedure can result in the whole document being deemed null and void.

Wills and trusts aren’t merely about the distribution of the deceased’s funds either.  Children are the most valuable “asset” of an estate, yet a recent survey found that nearly 3 out of 4 couples with minor children had made no provisions for legal guardianship of their children should an event claim both parents’ lives at the same time. This may be an unusual circumstance, but it is by no means a rare one. An experienced wills and trusts lawyer will prepare the proper documentation needed to insure the wishes of the parents are carried out that your DIY estate plan may miss.

Another danger inherent in DIY wills is that they give a person a false sense of security. An individual may think that his/her affairs are all in order when, in actuality, something of importance may have been left out or an area of the form filled out improperly. Remember, there is no one-size-fits-all document that covers every situation. Online document mills are prohibited by law from dispensing legal advice, therefore they can not advise you of the forms you really need to protect your family and assets, nor will they represent you in court should it become necessary.

Sadly, DIY wills and trusts that are intended to save a few bucks can easily result in estate losses of tens of thousands of dollars.  If you have a DIY will or trust, the most important thing you should do is have it reviewed by an experienced  wills and trusts attorney. 

Advice on Medicare and Medicaid

I frequently get inquiries about arrangements for long-term care.

Life expectancy continues to rise, due in part to more effective treatments for diseases previously thought to be terminal. This is great news, but with a larger elderly population, new dilemmas arise, including uncertainties related to assisted and rehab care facilities. Two of the most frequently asked questions are, “How do I pay for short-term and long-term care?” and “What is the difference between Medicare and Medicaid and what can each offer me?”

Medicare and Medicaid both pay for certain aspects of rehabilitation after a hospital stay, but there are specific requirements that must be met. A knowledgeable elder lawyer can give you the exact stipulations and explain the difference between Medicare and Medicaid provisions.

In general terms, Medicare provides coverage to people over the age of 65, and is similar to regular health insurance. Since Medicare is a federal program, benefits and requirements are universal for all states. An individual must have been hospitalized for at least 3 days and 3 nights before transferring to a nursing or rehabilitative facility, and the move must be made within 30 days of the hospital stay. In a sense, Medicare pays for an acute occurrence and the rehabilitation from it.  Since Medicare coverage is not intended for custodial care or long-term care, the patient must demonstrate a need for skilled care, in-home or in a care facility, and show that progress is being made toward recovery. If qualified, Medicare will cover a total of 100 days, the first 20 days paid in full and the next 80 days with a co-pay of $124 per day.

On the other hand, Medicaid is a state-run entity intended for those in financial need with different rules and qualifiers which vary from state to state.  Certain criteria must be met to be eligible for benefits.  In Ohio, a single patient would need to spend down his/her assets to around one thousand five hundred dollars, although some states exempt certain assets-- such as your house and car--up to a predetermined value. Any subsequent income the patient gets, including social security, goes first to paying for long-term care.  The rules for married persons are different and more complex.

Unlike Medicare, Medicaid does offer custodial care, but not all facilities are Medicaid approved. Due to the small percentage of nursing homes which offer Medicaid approved housing, and possible waiting lists, it is best to explore all options with the hospital social worker prior to the patient being discharged. Anecdotally, Medicaid approved nursing homes are crowded, so it would be wise to check out a number of facilities in person ahead of time.

Investigating and understanding your options, and implementing preparations before a crisis occurs is the prudent course of action to take.        

We work with families every day to explore such options and also help families implement the best asset protection strategies to preserve the things they’ve worked so hard for without jeopardizing the ability to qualify for Medicaid. 

Advice for Newlyweds

In the midst of finding the perfect dress, choosing a venue, and tasting countless cakes, newlyweds often overlook the importance of finding a reputable wills and trusts lawyer.  It’s easy to get caught up in planning for the wedding and to forget about planning for the marriage!  Really, though, the beginning of your new life together is exactly the right time to start your estate planning.

Perhaps you think it’s unnecessary because you don’t have what you would consider an “estate.”  Wills are not just about leaving property to your (potentially not-even-born-yet) children, however.  They help protect you and your new spouse, as well as other family members, should something unexpected happen.

Living Wills

Living wills are a powerful example of why newlyweds need a wills and trusts lawyer.  A living will declares your wishes in case you are unable to make them clear on your own.  Would you want to live on life support?  Do you wish to donate your organs?  Are there medical procedures that you absolutely would not want to undergo?  Your attorney can help you draw up the paperwork that makes your wishes clear and relieves your new spouse of trying to make those very difficult decisions in what would likely be the worst time of his or her life.

Along with a living will, you will likely also need to create powers of attorney.  These will designate who is able to make decisions for you, both medically and financially.  In many cases, this will be your spouse, but what would happen if you were both unable to make quick decisions for yourself?  A wills and trusts lawyer will help you create these important documents according to our local laws and regulations.

Probate

If you should suddenly pass away, would your spouse or other family members have access to your insurance?  Your bank accounts?  Your property?  The answer is not as obvious as it seems.  Your estate could easily end up in probate, meaning that those who should inherit from you are denied access for months or even years.  Putting an estate plan in place can help relieve some of this burden while speeding up the process for your loved ones.  It can also save them considerable amounts of money.

A wills and trusts lawyer will help you make sense of what needs to be done, and the process is actually far easier than many people imagine.  It’s also less expensive than you might think, and certainly less expensive than having your new spouse or family denied inheritance that should rightfully be theirs.  Just consider it one more administrative task that needs to be taken care of as you add your spouse’s name to your accounts, get a driver license with your new name, or take care of the other paperwork that comes along with being a newlywed.

Protecting Your Kids Should Something Happen to You

One of my greatest passions as a Central Ohio estate planning lawyer is educating parents about how important it is to prepare for their untimely death. Not a fun topic I realize. But it just takes one sad circumstance of parents passing away and leaving the kids to deal with squabbling relatives to understand how critical this is for their well-being.

The possibility of leaving this world can be difficult to accept and many people choose to not think about it. Unfortunately, this fear often prevents people from taking the proper precautions they need to take.

I speak at various groups around the city and usually deliver this message in an upbeat and cheerful way so people can see that preparing their estate plan for their family is a positive and joyful experience.  But for today’s post I’m going to give you the real-deal about estate planning. Blunt, and to the point.

Essentially, it’s critical for everyone to understand the importance of estate planning for those we love – especially our children. As you can imagine, children are incredibly vulnerable if you die while they are still minors due to the simple fact that they are unable to take care of themselves.

Here are a few cold-hard facts about what could happen if you passed away suddenly without a will or trust in place.

1.    A judge that doesn’t know you or your children will decide who raises them.

If something happens to you, who is going to step up?  Is it the person that you want to raise your children?  If you don’t have an estate plan in place, will your relatives squabble over who is or isn’t responsible for raising them? Do you really want to put your children through that?

2.    The person who the judge picks to raise your kids will also be responsible for their financial well-being.

If something happens to you, all of your assets will be handed to the guardian (that you didn’t select) to be managed for them. The obvious fear is that this person could possibly use the funds for something other than the care of your children.  However, there are many other things to consider.  Does the person that the judge picked have the same financial values that you do?  For example, you may feel strongly that you would like your children to attend high-end sports clinics to help develop their athletic skills.  But, will the guardian see the value in this?  What if they think spending money on what you would have wanted is a total waste?  The potential for trouble is endless.

3.      All of the money left from your estate (assuming there IS any) may go to your child in a lump sum when he is 18 years old.

Think about this one.  What would you have done if you had been handed a bunch of money at that time in your life?  Scary thought, huh?  The hard truth is that most 18 year olds are simply not mature enough to properly handle finances at that level.  I have heard story after story of kids who should have been fine financially, but weren’t because they decided to buy cars and clothes instead of investing in their future by going to college. So sad!

So, there you have it - some cold, hard questions for you to ponder. My hope for those of you reading this is that you have already taken care of naming guardians for your children and put your estate plan in place and that you are keeping it up-to-date as the circumstances of your life change.  But, if you are not, I would be happy to offer you a free (name of your consultation) to start you on the path. 

Don’t worry if you aren’t sure who you would pick as guardian.  I’ll help you with that.

Don’t worry if you think you can’t afford planning.  I’ll work with you on that.

Don’t put this off because you don’t have the time.  Think about how your kids will spend their time if something happens to you and you haven’t made these decisions for them.

Put a plan in place and you’ll experience a peace of mind that you didn’t even realize you were lacking.

Locating a Missing Life Insurance Policy

     In administering estates it is often difficult to find information on life insurance policies owned by the deceased.  A relatively new program from the Ohio Department of Insurance may be helpful in locating missing life insurance policies.

    Executors or family members of a deceased person may file a search request with the Ohio Department of Insurance.  The department forwards the request to all Ohio licensed life insurance companies within 25 business days.  If an insurance company has information about a current policy on the life of the deceased person, the company is required to take action to distribute any benefits. 

    For more information about this program visit www.insurance.ohio.gov

Using an Elder Attorney for Nursing Home Decisions

Elder lawyers specialize in certain aspects of senior life that many others have yet to even consider.  For example, as an elder attorney in Central Ohio, it is important to be aware of the nursing home options available to clients, as well as any changes in laws that apply to this type of care.  When it comes to nursing homes, planning ahead is one of the best choices you and your elder attorney can make.

By planning in advance, an elderly family member is able to have a much greater say in what type of nursing home he or she will enter.  When these decisions are left until an emergency, however, the actual resident’s wishes are far less likely to be considered.  That is because placing an elderly person into a nursing home is incredibly stressful for all involved.  When it is done at the last minute as the result of some sort of “last straw” event, no one is thinking clearly anymore.

Working as an elder attorney in Central Ohio has allowed me to develop a few guidelines for choosing the best nursing home for your needs.

1. Start early.  Ask friends their opinions of nursing homes where they’ve lived or visited.  Your doctor may also be a great resource for finding out about the best local care.
2. Don’t just base your decision on a few brochures and a price.  Instead, take the time to travel around to actually conduct in-person visits to your top choices.  Showing up unannounced may help you to see what things are really like on a typical day.
3. Make an appointment with the nursing home staff to discuss the care you or your loved one will receive.  Take notes and compare them among your top choices to ensure you’re making the choice that fits your needs.  If you have questions about what you should expect , elder lawyers are up-to-date on all applicable laws and regulations.

Making an informed choice regarding nursing home options will help you determine where you will receive either long or short-term care when it is needed.  An elder lawyer can help you draw up necessary documents and review any contracts needed to solidify your choice.

Of course if you require further assistance in this area, please give my office a call.

Parents of Disabled Kids Discover the Importance of Special Needs Planning

Estate planning is incredibly important for all parents, as it allows them the opportunity to make very difficult choices.  It provides the chance to determine who will raise your minor children if you can’t, what money will be set aside or used for their upbringing, and even what money will be used to support them as adults.  Each of these choices can become even more difficult when the child has disabilities, especially if he or she is receiving some type of government assistance.  This is where working with a Central Ohio special needs planning attorney comes into play.

A special needs planning attorney is familiar with the most common choices faced by parents of children with disabilities and can offer advice and suggestions on how to plan for that child’s care.  They also understand the ramifications of inheritance when it comes to eligibility for government assistance.  Here, as in other places across the country, planning tools such as a “special needs” or supplemental needs trust must be set up a very particular way in order to meet government standards and allow for the continuation of other benefits.

However, special needs planning is not just about maintaining government support.  It also protects the disabled individual from lawsuits and other debts, as the trust cannot be seized in order to pay these.  This protects the trust and the individual who relies upon it for his or her ongoing care.

A special needs planning attorney will be familiar with how local, state, and federal laws interact in order for parents to put together a plan that best protects their child.  It is highly recommended that you seek out a lawyer who specializes in special needs trust planning.  He or she will help set up your child’s trust, as well as explain all the details such as how a trustee will manage the assets for the beneficiary.

If you are ready to get started in creating a plan that makes sure your disabled child stays physically and financially protected if something happens to you, I invite you to give my office a call.