Trust Administration Attorney

Common Reasons Why Family Trusts Are Important

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Baron Law LLC, Cleveland, Ohio, offers information for you to reflect upon while you are setting out looking for an estate planning attorney to help protect as much of your assets as you can. For more comprehensive information contact Baron Law Cleveland to draft your comprehensive estate plan to endeavor to keep more of your assets for your heirs and not hand them over to the government by way of taxes.

Trusts are lauded as an almost indispensable component of estate planning. This largely stems from the ability to outright negate the tax burden upon an estate through the use of martial exemptions, the unified tax credit, and deductions. Nuanced trust use and understanding of the internal revenue code prevents an estate, of which a family has spent a lifetime of labor on, from being consumed by taxes, such as the generation-skipping tax, federal estate tax, and gift tax.

Apart from the overt tax benefits, trusts also afford grantors and beneficiaries a host of secondary benefits. From ensuring comfortable living during senior years and Medicaid eligibility to confirming trust asset longevity and legitimacy, a well drafted, implemented, and managed trust can provide decades of support and peace of mind for surviving friends and family. The following are four not widely-known benefits of using a trust. Nowadays trusts are a ubiquitous but misunderstood estate planning tool. As such, knowing all the ways trusts can work for you helps in deciding if you want to incorporate one into your estate plan.

Primacy of Trusts over UTMA Custodial Accounts (Conveyances to Minors)

Apart from financial aid and personal savings, a common way to help pay for college tuition and associated expenses is a UTMA custodial account. As with any large expense, a little foresight and planning can make a big difference. The Uniform Transfer to Minors Act, i.e. the UTMA, is a potentially advantageous vehicle for the creation of a college savings account.

In Ohio, children under 18 can’t receive direct inheritance. As such, UTMA accounts are available to control and protect assets for minors until they reach they reach the chosen age of termination, between 18 and 25. These accounts are privileged to non-taxed and partially taxed earnings amounts, up to a limited amount, and are simple to create. Though expedient to make, using trusts to house assets for college often is more preferable in particular circumstances.

For a UTMA account, at the age of termination, the beneficiary gets control of the assets. This may pose an untenable risk of frivolous spending or mismanagement. Further, the age of termination is statutorily prescribed, meaning if a grantor desires continued oversight or staggered distribution, such is unavailable. Trusts on the other hand are free to impose continued control and measured distribution thus ensuring asset longevity and more nuanced settlor control. Furthermore, UTMA accounts count as an asset for financial aid eligibility which could reduce available financial assistance or foreclose it entirely. Also, the preferential tax treatment of UTMA accounts are only really effective for smaller gifts. As such, for larger gifts, the tax benefits of using UTMA transfer is negated. Thus, in many circumstances and for many people trusts are preferable for minor conveyances. Contact a local estate planning attorney to find out if a UTMA account or personalized trust plan is right for you.

Professional Rules Mandating Due Diligence

Trust formation is a measured and complex process often undertaken with attorney guidance. As such, an attorney’s ethical obligations of due diligence and competent representation control during trust creation and management.

Because attorneys are ethically bound to do a good job, a secondary benefit of using a trust is the unsung legwork attorneys put in to support a trust and fulfill their duties. For example, confirming a complete chain of title or the existence of valid deeds and signatures. Often long-term or complex assets are rife with unrecognized errors or hibernating claims of ownership. A watchful and dutiful attorney will disarm any surprises before assets are housed within a trust, surprises which would otherwise go unnoticed in the absence of a trust and the supporting attorney. Again, hiring an experienced Cleveland estate planning attorney can save you and your beneficiaries a lot of time and stress down the line.

Deliberate Election of Trustee Experts

A critical component of trust formation is the selection of a trustee. The trustee is responsible for managing trust assets and making distribution per the grantor’s instructions. The importance of this position should not be understated.

Often, however, trust assets are investment accounts, land, or securities. Each asset type possesses its own laws and requisite knowledge to manage effectively. Since trusts are estate planning tools crafted over months, attorneys regularly counsel the appointment of trustees with expertise reflective to trust assets, not just a close family member with little understanding regarding the management of trust assets. Willingness of a grantor to use a trust, with the associated time and resource costs, means a grantor will go the extra mile to pick the best trustee for the job. The right person in the right place can make all the difference.

Privacy
It is a little-known fact that trusts also, by their very nature, protect the privacy of the grantor and the assets placed within the trust. When a person dies with a will, the will goes through probate. Because probate files are publicly accessible court documents, anyone can read the will. Thus bequests, beneficiaries, creditor claims, and any other personal information is obtainable by anyone, for any reason. Trusts, on the other hand, are confidential. Since trusts are private agreements, beneficiaries, trust assets, and the trust estate structure are protected from those not meant to know.

Any internet search about trusts will return volumes of results concerning all the multitudes of trusts out there. From self-needs trust, to tax-shelter trusts, to family trusts, trusts reflect the needs and goals of their creators. Trusts, however, are not a hot or common topic of conversation. As such, not many know, unless they sit down with their Ohio estate planning attorney, of all the ways trusts can mitigate, eliminate, or avoid personal or family problems. In an effort to inform people regarding trusts, and if they are something a particular person should look into, go to www.doineedatrust.com and take a 1-minute quiz. The only thing you’ve got to lose is 1-minute, but you could be saving yourself thousands over your lifetime.

Helping You And Your Loved Ones Plan For The Future

About the author: Mike E. Benjamin, Esq.

Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.

Disclaimer:

The information contained herein is general in nature, is provided for informational and educational purposes only, and should not be construed as legal or tax advice. The author nor Baron Law LLC cannot and does not guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable in a given situation may impact the applicability, accuracy, or completeness of the preceding information. Further, federal and state laws and regulations are complex and subject to change. Changes in such laws often have material impact on estate planning and tax forecasts. As such, the author and Baron Law LLC make no warranties regarding the herein information or any results arising from its use. Furthermore, the author and Baron Law LLC disclaim any liability arising out of your use of, or any financial position taken in reliance on, such information. As always consult an attorney regarding your specific legal or tax situation.

House in Trust with Mortgage

Terminating Irrevocable Trusts I: Changing What Can’t Be Changed

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Baron Law LLC, Cleveland, Ohio, offers information for you to reflect upon while you are setting out looking for an estate planning attorney to help protect as much of your assets as you can.  For more comprehensive information contact Baron Law Cleveland to draft your comprehensive estate plan to endeavor to keep more of your assets for your heirs and not hand them over to the government by way of taxes.

Irrevocable trusts are trusts in which the grantor, i.e. the trust maker, relinquishes all control and ownership over the trust and the assets used to fund the trust. Thus, in theory, the trust can only be changed or canceled per the ways denoted by trusts terms and usually only then with the blessing of the trustee and/or trust beneficiaries.  

So, why would anyone give up control to another and chose to use irrevocable trusts? Conversely with living trusts, grantors keep “the keys” to the trust while with irrevocable trusts “the keys” are given up. In the eyes of the law, generally, what is inside an irrevocable trust no longer belongs to the grantor. Thus, grantors aren’t taxed on what’s inside these trusts and those with claims against the grantor can’t extend potential recovery to these assets as well. This is all well and good, but with everything in life, situations change. A previous estate plan, and accompanying established trusts, sometimes no longer serve the best interest of the grantor and their family. With current sky-high estate tax exemptions, the normal administrative costs associated with trust management, and, perhaps, an adjusting need for liquidity or differing type of asset control, some individuals are evaluating whether it’s worth keeping an irrevocable trust. If this is you, don’t despair. Despite what their name suggests, irrevocable, there are ways to terminate an irrevocable trust. Before, however, anything drastic like trust termination occurs, always consult an experienced Cleveland estate planning attorney to figure out all your options and plot the best course of action.  

Now if after consultation with professionals regarding your estate plan reveals that your irrevocable trust no longer serves your best interests, termination is an option. There are several methods for terminating trusts in Ohio, termination by court order, termination via private agreement, and termination by discretionary distribution. This blog concerns primarily the first method, court ordered trust termination.

   1.Court-Ordered Trust Termination  

In 2007 Ohio passed the Ohio Trust Code which governs the creation, management, and termination of trusts. Chapter 5804 primarily is the vehicle courts use to terminate trusts depending on the circumstances. Now, the most common circumstances in which this method of termination is used is either via independent motion on a probate court to terminate a trust for justifiable cause or as a recovery prayer in a civil suit that someway touches on a trust significantly enough to justify termination. Again, consult an experienced Ohio estate planning attorney, they will know when, how, and where to commence trust termination proceedings.    

       A.Trust Termination by Revocation or by Terms 

Per O.R.C. § 5804.10, a trust may be terminated to the extent that a court finds that: 

  1. It is revoked or expired pursuant to its terms; 
  2. There is no remaining purpose of the trust to be achieved; 
  3. The purpose of the trust has become unlawful or impossible. 

This particular code section denotes the authority/power of the court to terminate a trust. The respective standing, or ability, for a grantor, trustee, and trust beneficiary to petition to terminate a trust are also denoted within the Ohio Trust Code. Note, however, that within R.C. § 5804.10 no mention of settlor, trustee, or beneficiary consent is denoted. This means that if a court thinks termination of a trust is appropriate, they can do so. Now whether or not a particular probate court will take the feelings and considerations of the settlor, trustee, or beneficiaries into account when deciding to terminate a trust is dependent on the judge and jurisdiction. Again, you never can guarantee a particular outcome when you resort to court intervention. That is why you should always consult with an estate planning attorney before asking a court to do anything with your trust.        

        B. Termination of Noncharitable Irrevocable Trust 

Per O.R.C. § 5804.11, an irrevocable trust can be terminated by agreement, authorized by a court, with the consent of the settlor and all of the beneficiaries. Note, however, the trustee’s consent is not required. Though technically a court must approve of termination via § 5804.11, if all valid consent is obtained from the settlor and beneficiaries and all are competent to give such consent, a probate court will almost always approve of the termination and issue the order even if such termination is inconsistent with the terms of the trust and the trust’s material purposes.  

       C. Court Intervention Due to Changing Circumstances  

 Per O.R.C. § 5804.12, a probate court may terminate a trust due to a change in circumstances that has occurred since its creation. Per this section of the Ohio Trust Code:   

(A) The court may modify the terms of a trust or terminate the trust if because of circumstances not anticipated by the settlor modification or termination will further the purposes of the trust. To the extent practicable, the court shall make the modification in accordance with the settlor’s probable intention. 

(B) The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or impair the trust’s administration. 

Further, upon termination of trust via this section, the trustee must distribute the trust property in a manner consistent with the purposes of the trust. O.R.C. § 5804.12 (C). An action under this section to terminate a trust may only be brought by a trustee or beneficiary and a court must act as close as possible to the probable wishes of the settlor but only to the extent practicable in the circumstances. Further, a termination under this section must be due to circumstances not anticipated by the settlor and such termination must be in accordance with the trust purposes. As such, though circumstances may allow for termination of a trust, interested parties just being disgruntled or dissatisfied with a trust’s management is not sufficient to warrant termination.    

Trusts are a useful estate planning tool to ensure increased permanence of your lifetime earnings and instructions down through the generations. Like all things, however, nothing is unalterable. Being aware of the potential reasons and methods for revoking irrevocable trusts can allow a settlor to dictate more effective terms but also allow avenues for change if completely unexpected or frustrating events occur. An experienced Cleveland estate planning attorney is invaluable in creating, managing, and, if the time comes, terminating your trusts.     

 Helping You And Your Loved Ones Plan For The Future

About the Author: 

Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.   

Disclaimer: 

The information contained herein is general in nature, is provided for informational and educational purposes only, and should not be construed as legal or tax advice. The author nor Baron Law LLC cannot and does not guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable in a given situation may impact the applicability, accuracy, or completeness of the preceding information. Further, federal and state laws and regulations are complex and subject to change. Changes in such laws often have material impact on estate planning and tax forecasts. As such, the author and Baron Law LLC make no warranties regarding the herein information or any results arising from its use. Furthermore, the author and Baron Law LLC disclaim any liability arising out of your use of, or any financial position taken in reliance on, such information. As always consult an attorney regarding your specific legal or tax situation.

Baron Law Estate Planning Lawyer - Cleveland, Ohio

How Can I Amend An Existing Will?

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Cleveland, Ohio, estate planning lawyer, Daniel A. Baron, Ohio, offers the following information on what documents are necessary for you to provide your attorney when sitting down to establish your comprehensive estate plan.

 

One of the primary goals of drafting a will is to encapsulate the entirety of a life’s material assets and leave instructions for the dispensation of those assets after death. The other goal is to leave some legacy, emotional, spiritual, or otherwise, to friends and family by communicating final wishes so at least some minor part of ourselves persists, at least for a little bit, after we’re gone. Implicit in the pursuant of these goals is the assumption that the circumstances and realities of the present will mirror those of the future. That, however, is never the case. Time passes, the world changes, and we change with it.

More often than not, the initial draft of a will is not definitive. Family dynamics shift, executors and beneficiaries pass away, people move, assets are conveyed, trusts are established to avoid probate and preserve assets, and the law changes. As such, wills often need to be updated or outright rewritten. Wills, however, are legal documents. As such, you can’t just edit a will with red pen and call it a day. There are particular ways to change a will, each with its own rules and procedures. As always, if your will needs changing, or if you don’t have a will at all, contact an Ohio estate attorney. No one wants to leave their family a confusing or invalid will to deal with during the mourning process.

Codicil

An amendment to a will is called a codicil. Codicils are the primary way to amend a will in Ohio and are meant to amend, alter, or confirm a previously existing will. A codicil doesn’t override a will but becomes a new part of the document. Codicils must be executed with the same formalities as a will. That is, it must be in writing, signed by the person drafting it, and witnessed by two disinterested parties who either saw the person sign or heard them acknowledge their signature. Further, the testator, the person making the will or in this instance the codicil, must possess sufficient legal capacity. That is, be 18 years of age, of sound mind and memory, and not under undue threat or influence.

Codicils are largely holdovers from the past before the existence of Microsoft Word and typewriters. Back then, wills were long, handwritten, and required multiple parties to be physically present during execution. As such, a simple amendment, rather than total rewriting, saved time and expense. Nowadays, though, since wills can be quickly amended and printed, drafting a new will is preferable.

Codicils do possess some persisting utility. In a medical crisis or where a person is on an extreme fixed income, use of a codicil may be viable. Codicils, however, are potentially problematic. Codicils can be executed improperly, establish an ademption, i.e. bequeathing property no longer owned or in existence, mistakenly revoke otherwise valid will provisions, or create ambiguity during probate. Further, any codicils must accompany the associated will. So, the misplacement or destruction of a valid codicil is a major concern when probating a will. Drafting a new will avoids these problems. Contact a Cleveland estate planning attorney to see what option is preferable for your particular circumstances. At minimum, an attorney can guarantee your family can actually find a will, and all the accompanying codicils, when the time comes.

Revocation

The other method of changing a will in Ohio is revocation, and subsequent redrafting. A will is revoked primarily the following ways:

1) a testator, with the intent to revoke, tearing, canceling, obliterating, or destroying a will.

2) an agent of testator, within the presence of testator or with testator’s written direction, doing the same.

3) by another written will or codicil, signed, attested, and subscribed according to the laws of Ohio.

Further, a revocation must have the same state of mind as with will creation, i.e. sound mind and body with no undue influence.

These methods of revocation are available if a will hasn’t been filed with a probate court. In the event that a will was filed, one must file a petition with the relevant probate court, using the standardized forms provided, and ask that the will be revoked. If the court determines that the revocation is valid, it will recognize the revocation and note it in public record.

Revoking a will is often simpler than drafting codicils. Every time concurrent estate documents exist and need to be read together, considerations with conflicting and superseding terms, ademptions, and ambiguity must be addressed. Furthermore, a probate court might reject a codicil which will likely throw an entire estate plan in disarray and balloon probate costs. Such costs are borne by the estate and might outright consume any money slotted to go to surviving friends and family. An Ohio estate planning attorney is in the best position to advise on the sufficiency of an existing will and whether revocation and redrafting is justifiable in your current circumstances.

 

Tangible Personal Property Memoranda

Though not available in Ohio, another potential method to amend a will is with a tangible personal property memorandum, “TTPM.” Most people use simple language to bequest remaining personal property to surviving friends and family. Usually by either leaving everything to the surviving spouse or to children in proportional shares. Facially, this seems like a fair and simple way to distribute an estate. In application, though, issues often arise. Certain children may feel snubbed or offended by a particular asset distribution or manner of distribution, as often is the case when one adult child served as a caregiver for ailing parents but received the same proportional estate share that less selfless children received. Further, often estate assets cannot be spilt equally. For example, splitting a timeshare in Aspen between three children and six grandchildren. Addressing and preventing these problems is where a personal property memo comes in.

As previously mentioned, this method of will amendment is not recognized as valid by Ohio courts and will be disregarded. This places an even greater emphasis on forethought when creating an estate plan and use of clear and concise language for bequests. An experienced Ohio estate attorney will know the common pitfalls and how to avoid them.

A few hours of planning can save thousands of dollars down the line and avoid embarrassing family infighting over who gets what. Life is perpetual change and estate planning attorneys try valiantly to predict the future and address any and every circumstance. Try as they may, however, the only thing one can expect is the unexpected. Therefore, it is always wise to be flexible and not to become entrenched in now old and defunct legal documents. Even if an estate plan covers 95% of what you need, the 5% unaddressed can easily cripple any well laid plan and lead to a lifetime of savings and earnings being extinguished by taxes, creditors, or penalties.

For more information, you can contact Mike Benjamin of Baron Law LLC at 216-573-3723. Baron Law LLC is a Cleveland, Ohio area law firm focusing on estate planning and elder law. Mike can also be reached at mike@baronlawcleveland.com.

 

Helping You and Your Loved Ones Plan for the Future.

 

About the author: Mike E. Benjamin, Esq.

Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.

Disclaimer:
The information contained herein is general in nature, is provided for informational and educational purposes only, and should not be construed as legal or tax advice. The author nor Baron Law LLC cannot and does not guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable in a given situation may impact the applicability, accuracy, or completeness of the preceding information. Further, federal and state laws and regulations are complex and subject to change. Changes in such laws often have material impact on estate planning and tax forecasts. As such, the author and Baron Law LLC make no warranties regarding the herein information or any results arising from its use. Furthermore, the author and Baron Law LLC disclaim any liability arising out of your use of, or any financial position taken in reliance on, such information. As always consult an attorney regarding your specific legal or tax situation.
“He who is always his own counselor will often have a fool for his client.” Old English Proverb est. circa

 

Daniel A Baron - Baron Law Cleveland

Dying Without A Will – A Mess for Your Family To Clean-up

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Baron Law LLC, Cleveland, Ohio, offers information for you to reflect upon while you are setting out looking for an estate planning attorney to help protect as much of your assets as you can. For more comprehensive information contact Baron Law Cleveland to draft your comprehensive estate plan to endeavor to keep more of your assets for your heirs and not hand them over to the government by way of taxes.

No one likes it think about death, and even less people actively prepare for its inevitable occurrence. With everything that makes up life, job, family, recreation, there aren’t enough hours in the day to do what we need to do or want to do, let alone do what we despise. Thinking about death and how life will continue on regardless of whether we are here or not isn’t a fun concept people like to dwell on. Estate planning, or lack thereof, has tremendous consequences for surviving friends and family. A proper estate plan can mean the kids get to go college and the surviving spouse gets to stay in the house and doesn’t have to get a second job. No estate plan means the martial home gets sold to pay off debts and necessities or the surviving kids blow through an investment portfolio shrewdly managed for 25 years in 6 months. A local Cleveland estate planning attorney can create a customized estate plan with supporting documents to ensure that your friends and family are in the best position when your gone and avoid familial infighting and asset waste.  

Apart from the absolute chaos and/or squandering of a lifetime of assets which may result from a lack of estate planning, what are the practical consequences of not having a will?  When a decedent does not have a valid will in existence at the time of death, a decedent is deemed to have died intestate and Ohio intestacy laws govern how estate assets are managed and distributed. Ohio intestacy laws may be avoided altogether with proper estate planning. It is important, however, to be familiar with these laws because they may apply for a variety of reasons in a variety of situations. Sometimes intestacy laws will control even if a valid will is subject to probate administration. Conversely, sometimes Ohio intestacy laws may not apply even if a decedent died intestate. As such, since the controlling law for dying without a will can be flexible, an estate planning and/or probate lawyer is highly recommended.  

One example where intestacy laws are inapplicable even if decedent died without a valid will is where the estate assets in question would not have been part of the decedent’s probate estate if the decedent had a will. An example of this situation is property that is owned jointly with right of survivorship. This type of ownership will pass to the surviving joint owner by operation of law irrespective to the terms of the decedent’s will or intestacy statutes. The same is true for bank accounts or other assets with valid payable on death (POD) or transfer on death (TOD) designations. Property that the decedent transferred to a trust during life will not typically become part of the decedent’s probate or intestate estate.   

The most common situation where intestate law applies is when a will is declared invalid by a probate court because it was not executed in accordance with the requirements under Ohio law. The same holds true if a will is set aside for other reasons, such as fraud in the execution. Further, even if a decedent’s will is found valid and is not set aside, there can be many circumstances where intestacy laws still apply. One such circumstance is that a will fails to dispose of all of the decedent’s property because it does not have a residuary clause. This outsight is becoming more common with the use of services like Rocket Lawyer and LegalZoom. Ensuring that estate planning documents are properly executed, drafted, and filed is a major reason why estate planning attorneys are employed and retained. Doing it yourself may be cheaper in the short-term, but when it counts the most, self-drafted estate document all too often fail to make the grade.  

So, apart from not knowing whether intestacy laws will apply or not, what’s the big deal dying intestate?  

In a nutshell, dying intestate can have serious consequences for surviving friends and family and, most importantly, can affect the amount of  estate money and assets available, who those assets go to, and when those assets are distributed. First off, dying intestate means a decedent has very little, if any, direct control over who gets what and when. That is decided per the laws of intestacy. So, if you have two children, one is rich and doesn’t need any more money and the other has addiction issues and can’t be trusted, but you have a niece who just got accepted to Harvard but can’t afford it, too bad, you can’t help out your niece if you die intestate. Further, dying intestate means the court has to administrate the estate, which takse a lot longer than direct bequests in a will. Instead of potentially almost instantaneous transfer of money and assets, you likely have to wait at least six months to distribute estate assets. During this time, surviving friends and family are angry they haven’t gotten their share, the legal fees are running for the attorney, the fees are running for the estate administrator, and you’re paying taxes and upkeep on any estate assets that require such.  

Furthermore, subjecting an estate to intestate administration means creditors and litigants have almost free reign to bring claims against intestate assets. If an estate is properly planned and organized, there are ways to protect most if not all of an estate’s assets from these outside threats. As previously mentioned before, an intestate estate requires an administrator. This person is appointed by the probate court, it may be a family member, it may not be. Hopefully, they will be competent, responsible, and honest, but if an estate fiduciary isn’t proactively appointed, who know who’ll be appointed. Ohio law subjects estate fiduciaries to steep penalties for incompetence and misconduct, there is a reason for this. History is rife with examples of fiduciaries wasting or absconding with estate assets. After you’ve spent a lifetime working, saving, and building, why put it all in the hands of a strange or irresponsible or inexperienced family member. This is why Ohio estate attorneys exist, to help you protect a lifetime of labor and give to the people you love.  

Choosing to die intestate certainly is one way to do it but it is hardly the best way. Spending a little time to sit down with a probate attorney or estate planner will ensure that you’re proactively thinking about the future and putting your friends and family in the best possible situations and avoiding needless stress, confusion, and time waste. A last will and testament is the “core” of any estate plan. If you don’t have anything else, you must have a will. Simply put, its foolish not to even take this basic step.  

You don’t have to be rich to protect what you’ve spent a lifetime trying to build. To find out whether a trust is right for your family, take the one-minute questionnaire at www.DoIneedaTrust.com. There are a number of different trusts available and the choices are infinite. With every scenario, careful consideration of every trust planning strategy should be considered for the maximum asset protection and tax savings. For more information, you can contact Mike Benjamin of Baron Law LLC at 216-573-3723. Baron Law LLC is a Cleveland, Ohio area law firm focusing on estate planning and elder law. Mike can also be reached at mike@baronlawcleveland.com.  

 Helping You And Your Loved Ones Plan For The Future

About the author: Mike E. Benjamin, Esq.  

Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.   

Disclaimer:

The information contained herein is general in nature, is provided for informational and educational purposes only, and should not be construed as legal or tax advice. The author nor Baron Law LLC cannot and does not guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable in a given situation may impact the applicability, accuracy, or completeness of the preceding information. Further, federal and state laws and regulations are complex and subject to change. Changes in such laws often have material impact on estate planning and tax forecasts. As such, the author and Baron Law LLC make no warranties regarding the herein information or any results arising from its use. Furthermore, the author and Baron Law LLC disclaim any liability arising out of your use of, or any financial position taken in reliance on, such information. As always consult an attorney regarding your specific legal or tax situation.

 

I’ve Changed My Mind, How Do I Modify Or Revoke My Trust?

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Baron Law LLC, Cleveland, Ohio, offers information for you to reflect upon while you are setting out looking for an estate planning attorney to help protect as much of your assets as you can.  For more comprehensive information contact Baron Law Cleveland to draft your comprehensive estate plan to endeavor to keep more of your assets for your heirs and not hand them over to the government by way of taxes.

People change their minds. Circumstances change, family dynamics shift, realities, needs, and desires are fluid. Estate plans reflect the lives of their owners at the moment of their creation. As such, the want, and sometimes need, to adjust and change an estate plan is common. And since a major part of many people’s estate plans are one or more trusts, it is important to understand when, how, and if you can change the terms your trusts or eliminate them outright.

Modifying or revoking an existent trust is not a straight forward prospect. Trusts fundamentally are legal agreements and thus, are bound by Ohio law and procedure. Trusts bring with them a multitude of benefits, from tax incentives, asset protection, and privacy. The other side of trust use is the conformity with the law and strict adherence to, sometimes burdensome, procedure. The law must ensure any changes to trust terms are legitimate and do not improperly harm the settlor, named beneficiaries, or trust assets. What can or cannot be changed within a trust and who can or cannot effectuate that change largely depends on the type of trust and the circumstances of its creation. The modification or revocation of an existing trust is a nuanced area of law, as such, an experienced Ohio estate planning attorney should be retained at the earliest possible opportunity.

The first question to ask regarding changing a trust is, what type of trust do you have? Though there exist numerous types of trusts out there, the focus here is between revocable and irrevocable trusts. Generally, modification or revocation by a settlor is not available for irrevocable trusts. Hence, the significance of the irrevocable nature of irrevocable trusts. (Though recent changes in Ohio law made it possible to overcome the difficulties to revoke or amend an irrevocable trust, that is a topic for a later discussion.) So, amending or revoking a trust primarily concerns revocable trusts. The next question is how many settlors, i.e. trust makers, are there?

Only one Trust Maker

If there is only one trust maker for a revocable trust, revoking or amending a trust is straightforward. Either follow the instructions in the trust documents or use a method that is highly likely to follow the intent of the individual who made the trust, curiously in this instance, you. Ohio law provides:

The settlor may revoke or amend a revocable trust by substantial compliance with a method provided in the terms of the trust or, if the terms of the trust do not provide a method, by any method manifesting clear and convincing evidence of the settlor’s intent… O.R.C. § 5806.02 (C).

Clear and convincing evidence is a legal term of art that means, in this context, the method of revocation or amendment is highly and substantially more probable than not to be true to the intent of the trust settlor. Obviously, this is a subjective standard so, in most cases, if you give a good faith effort and act honestly with no nefarious purpose, you should be alright. Even more obvious is that this situation can be avoided, and no subjective standard need be considered, if the terms of your trust are competently and comprehensively drafted, properly addressing the possibility of revocation and/or amendment within the terms of the trust. This is why an experience Cleveland estate planning attorney is critical, you really can’t put a price on good legal drafting.

Two or More Trust Makers

If there are two or more settlors, it gets more complicated because each party has an equal say in modifying or amending the trust. Thus, the rules attempt to strike a balance between the party who wants a change and the party who doesn’t, focusing primarily on the type(s) of trust property effected by the potential change. Ohio law provides:

If a revocable trust is created or funded by more than one settlor, all of the following apply:

To the extent the trust consists of community property, either spouse acting alone may revoke the trust, but the trust may be amended only by joint action of both spouses.

To the extent the trust consists of property other than community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor’s contribution.

Upon the revocation or amendment of the trust by less than all of the settlors, the trustee shall promptly notify the other settlors of the revocation or amendment.

Since Ohio is not a community property state, the rule regarding community property is really only relevant in situations where Ohio couples or joint owners possess property in foreign states which follow community property law, such as Wisconsin or California. For most, the non-community property rule applies most of the time. Here, trust amendment or revocation power is tied to original trust property ownership. This is why accurate and timely accounting of trust funding is paramount, so you can track who put what in and have evidence to back it up. Again, this is why an experienced Ohio estate planning attorney is important, he’ll remind you to keep an accounting of your trust funding to provide for this possibility. Granted, this rule does not expressly provide how to account for jointly owned property put in trust. Ohio law does address this possibility, however, it won’t be examined at this time. Ask your estate planning attorney if you’re looking to amend or revoke a joint trust which was funded with jointly owned property.

Ohio law also allows your power of attorney and guardian of the estate to revoke or amend a trust, however, only to the extent expressly authorized by both the terms of the trust and the authority given to your agent. Make sure the terms of your power of attorney and/or guardianship provide for this contingency. Changing a trust in anyway is a serious action that deserve serious consideration of its consequences. Consult a local estate planning attorney to make sure this is the best course of action and any hidden pitfalls are revealed before acting.

Helping You And Your Loved Ones Plan For The Future

 

About the author: Mike E. Benjamin, Esq.

Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.

Disclaimer:

The information contained herein is general in nature, is provided for informational and educational purposes only, and should not be construed as legal or tax advice. The author nor Baron Law LLC cannot and does not guarantee that such information is accurate, complete, or timely. Laws of a particular state or laws that may be applicable in a given situation may impact the applicability, accuracy, or completeness of the preceding information. Further, federal and state laws and regulations are complex and subject to change. Changes in such laws often have material impact on estate planning and tax forecasts. As such, the author and Baron Law LLC make no warranties regarding the herein information or any results arising from its use. Furthermore, the author and Baron Law LLC disclaim any liability arising out of your use of, or any financial position taken in reliance on, such information. As always consult an attorney regarding your specific legal or tax situation.

 

Probate Lawyer Baron Law LLC

What is Probate?

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Cleveland, Ohio, estate planning law firm, Baron Law LLC, Cleveland, Ohio, offers information for you to reflect upon while you are setting out looking for an estate planning attorney to help protect as much of your assets as you can.   For more comprehensive information contact Baron Law Cleveland to draft your comprehensive estate plan to endeavor […]

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Baron Law Cleveland Ohio

You Have Been Appointed Executor, What Do You Do?

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Cleveland, Ohio, estate planning lawyer, Daniel A. Baron, Ohio, offers the following information on what your duties are as an executor of an estate.  Contact Daniel A. Baron of Baron Law to answer all your questions on what your duties are and to help guide you through the events that will be taking place and how to navigate through them.

An executor appointment is bittersweet. It is heartwarming that your recently deceased friend or loved one had faith enough in your abilities to trust you with the administration of their estate, however, fulfilling the duties of an executor is no simple matter. For the next six months, at minimum, you “stand in the shoes” of the dearly departed. You ensure their debts are paid, their affairs are closed in orderly fashion, and their final wishes are communicated to and followed by grieving friends, family, and business associates.  

Most individuals have little prior experience with executorships. Often people agree many years before the faithful day to be an executor and do little preparation or research for when the time arrives. Executor appointments are serious matters with serious consequences. A failure to perform the duties of an executor satisfactorily can result in estate assets being squandered, the infliction of additional stress and trauma upon grieving survivors, and, in extreme cases of misconduct or neglect, personal liability for the executor. Thankfully, executors have been a common reality in estate law for many centuries. As such, what you need to do, how to do it, and when you need to do it are all spelled out in the laws of Ohio. Naturally, the best adviser to seek out if one is appointed an executor is an Ohio estate planning attorney. A Cleveland estate attorney can walk you through the do’s and don’ts and ensure filings are proper in form and timely in submission.  

  1. Open the Estate

As an executor, the first thing you need to do is to open the estate. There is a myriad of probate proceedings available to open an estate, each with its own filing requirements and hurdles. Some may even be able to avoid probate all together, saving time and stress for an executor. Again, an estate attorney is in the best position to advise the best way to probate an estate, if there is a need at all.   

II.Inventory the Estate  

Once an estate has been opened, an inventory of the probate assets is required to be filed with the probate court within 3 months of the executor’s appointment. Only probate assets are inventoried. Non-probate assets pass to beneficiaries or owners outside of the will and, as such, are not considered a part of a decedent’s estate. Your estate attorney will know which estate assets are subject to probate. Practical tip, it is good practice for those with an estate plan to keep a comprehensive accounting of all assets in a centralized location to assist an executor in locating assets and keeping track of values and amounts of assets. Additionally, telling your executor that this accounting exists is just as important as doing it all. All too often executors are completely in the dark regarding the composition of an estate and the location of critical documents.     

To take the actual inventory of decedent’s estate, you will use the series “6” standardized forms from the Ohio Supreme Court website in conjunction with the relevant local probate court forms. There are 88 probate courts in Ohio, each with its own way of doing business, as such, each probate court has particular forms they prefer. Initially, use the local forms, when in doubt, the Ohio Supreme Court forms are always acceptable.  

An inventory itself is a detailed description of all probate estate assets along with their values. Detailed information regarding the assets, such as account numbers, serial numbers, stock certificate numbers, and book, plat, and parcel numbers for real estate are denoted in the inventory. The inventory, at the most basic level, consists of two forms: 1) the Inventory and Appraisal form and 2) the Schedule of Assets form. The Schedule of Assets contains the detailed information regarding the estate. Basically, a list of asset identifiers and information, i.e. the who, what, and where of assets. The Inventory and Appraisal form is the summary of the probate asset information that is detailed on the Schedule of Assets form. It recaps the values of the tangible and intangible personal property and real estate owned by the estate. During the drafting of these documents, appraisals and valuations of assets take place. Naturally, there are particularized rules and procedures for such, but that is a discussion for a later date.  

After all the assets are located and relevant investigations completed, the inventory is submitted to the court and a hearing date is set. Per the laws of Ohio, a probate court is required to set all inventories for hearing not less than 10 days and not more than 30 days after filing of the inventory. During this time notice is required to be sent to all interested parties of the estate, e.g. next of kin, devisees, legatees, and creditors of the estate. An inventory hearing cannot be undertaken unless receipt of formal notice for all interested parties is confirmed or waivers for those interested parties are signed and filed with the court. The notices themselves are standardized forms assessable via any probate court website.  

While waiting for the notice period to expire and for the hearing date to arrive, interested parties can file exceptions to the inventory. Exceptions, generally, are claims to particular estate assets and whether they have been properly included or excluded from an inventory. The important thing is filing of an exception to an inventory triggers an inventory exception hearing which, in turn, continues the inventory hearing. Thus, an inventory cannot be approved until the exceptions are addressed and the probate process stalls.   

If there are no exceptions filed, or the exceptions have been resolved, and after the notice period has been observed, the court will conduct an inventory hearing and enter an Entry Approving Inventory. This Entry, in essence, states going forward, the approved inventory will be the presumptive valuation and appraisal of estate assets. Thus, distributions of estate assets according to the laws of Ohio or the last will and testament of decedent can begin.  

At this point in the process, a significant part of the legwork for an executor is finished. The major hurdles remaining deal with will-contests, asset distribution, and closing of the estate. An upcoming article will flesh out the remainder of the duties and obligations of executors going forward past the inventory hearing and the probate court’s Entry Approving Inventory. If you’ve been appointed an as executor and have questions regarding what you need to do and when you need to do it, contact an Ohio estate planning attorney. Spending a little time now can save you a lot of time later.   

You don’t have to be rich to protect what you’ve spent a lifetime trying to build. To find out whether a trust is right for your family, take the one-minute questionnaire at www.DoIneedaTrust.com. There are a number of different trusts available and the choices are infinite. With every scenario, careful consideration of every trust planning strategy should be considered for the maximum asset protection and tax savings. For more information, you can contact Mike Benjamin of Baron Law LLC at 216-573-3723. Baron Law LLC is a Cleveland, Ohio area law firm focusing on estate planning and elder law. Mike can also be reached at mike@baronlawcleveland.com.  

 Helping You and Your Loved Ones Plan for the Future.

About the author: Mike E. Benjamin, Esq.  

Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.   

 

 

Estate Planning Lawyer Baron Law Cleveland

Executor’s Duties – When Should Debts Be Paid?

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Cleveland, Ohio, estate planning law firm, Baron Law LLC, Cleveland, Ohio, offers the following information on what your duties are as an executor of an estates and  when you need to pay all debts of the estate.   Contact Baron Law Cleveland to answer all your questions on what your duties are and to help guide your through […]

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Baron Law Cleveland Estate Planning Attorney

Spousal Rights – Are You Forced To Take What Is Bequeathed?

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Cleveland, Ohio, estate planning law firm, Baron Law LLC, Cleveland, Ohio, offers the following information on how to handle your spouses will after they pass.   Are you forced to take what is left to you?  Contact Baron Law Cleveland to answer this question and any other questions you may have on wills and probate.

 

Humans are material creatures, it’s just how we’re wired. We all like stuff, we all want stuff. The only difference between people is the target of that want and the severity of that desire. Though the passing of a friend, loved one, or spouse is a mournful event whose significance shouldn’t be understated. At the end of the day, the most common question I hear when a person comes into the office with a will of a recent decedent is, “what do I get?” More often than not, the next question after that is, “what else can I get?”  

Whether its due to genetics, environment, habits, or just dumb luck, women live, on average, seven years longer than men. So naturally, women are more often responsible for probating their husband’s will and receiving distributions under it. Regardless of sex, however, under Ohio law, surviving spouses are granted the ability to elect either 1) to receive the surviving spouse’s testamentary share as provided in the decedent’s will, “taking under a will;” or 2) to take against the will. This “taking against the will” is called an election to take under the law. Which option to take is a momentous decision that can affect the total windfall of the surviving spouse, the distributions to beneficiaries and heirs, and temperament of surviving friends and family. A local Cleveland estate attorney is in the best position to calculate the options and spell out the pros and cons of each.  

If the surviving spouse elects to take against the will, the surviving spouse receives either one-half or one-third of the decedent’s net estate. The surviving spouse receives one-half of the decedent’s net estate unless two or more of the decedent’s children or their lineal descendants survive the decedent, in which case the surviving spouse receives one-third.  

So how does one elect to “take against a will?” After the appointment of an executor or administrator, the probate court will issue a citation to the surviving spouse to elect whether to take under the will or against the will. This election must be made within the five-month statutory period or else be forever barred. If you chose to take against the will, you return the form attached to the notice and the court sets a hearing.   

At the hearing to elect to take against a will, the probate judge or deputy clerk, who acts as a referee, will explain the will, the rights under the will, and the rights, by law, in the event of a refusal to take under the will. If the surviving spouse is unable to make an election due to a legal disability, the court will appointment an appropriate proxy to determine if an election to take against the will is the best course of action for the surviving spouse and, if it’s the best course of action, make the actual election.  

Unless a will expressly states otherwise, an election against a will results in the balance of the net estate being disposed of as though the surviving spouse had predeceased the testator. Furthermore, unless a trust says otherwise, if a will transfers property to a trust created by the testator during the testator’s life, such as with a pour-over will, and the spouse elects against the will, then the surviving spouse is considered for purposes of the trust to have predeceased the testator, and there shall be an acceleration of remainder or other interests in all property bequeathed or devised to the trust by the will, in all property held by the trustee at the time of the death of the decedent, and in all property that comes into the possession or under the control of the trustee by reason of the death of the decedent. Again, an election to take against a will can have serious ramifications for a decedent’s estate plan. An Ohio estate planning attorney will be better able to spell out the consequences of such an election and track which estate assets may be effected by an election and in what ways. 

It is important to note, however, that an election to take against a will does not alter or destroy the will for other beneficiaries. Upon an election against a will, the administrator or executor of the estate must still attempt to follow the testator’s intent and final wishes to the best of the fiduciary’s ability as to all others in a will except the surviving spouse.   

The only real ways to waive or eliminate the statutory right of the surviving spouse to elect to take against a will is either a valid prenuptial agreement or antenuptial agreement. These agreements, however, are not guaranteed effective and are only valid if 1) they have been entered into freely without fraud, duress, coercion, or overreaching, 2) if there was a full disclosure, or full knowledge and understanding of the nature, value, and extent of the prospective spouse’s property, and 3) if the terms do not promote or encourage divorce or profiteering by divorce. With the recent rise of divorce rates in America nuptial agreements are steadily gaining in popularity and use. As such, consult an Ohio attorney to find out if nuptial agreements are right for you or if the nuptial agreements you already have are either valid or actually fulfilling their intended purpose.   

Spousal rights were created to ensure that surviving spouses aren’t maliciously or wrongfully cut out from a will. Improper disinheritance from a will can result in a surviving spouse falling into poverty, being kicked out of a lifelong martial home, or becoming a burden on friends and family. Though it may seem unseemly to focus on material possessions when a spouse passes, the responsibilities and burdens of day to day living still persist regardless. You still need food in the fridge and a roof over your head. After all, as Langston Hughes said, “life is for the living.”  

You don’t have to be rich to protect what you’ve spent a lifetime trying to build. To find out whether a trust is right for your family, take the one-minute questionnaire at www.DoIneedaTrust.com. There are a number of different trusts available and the choices are infinite. With every scenario, careful consideration of every trust planning strategy should be considered for the maximum asset protection and tax savings. For more information, you can contact Mike Benjamin of Baron Law LLC at 216-573-3723. Baron Law LLC is a Cleveland, Ohio area law firm focusing on estate planning and elder law. Mike can also be reached at mike@baronlawcleveland.com.  

 Helping You And Your Loved Ones Plan For The Future

About the author: Mike E. Benjamin, Esq.  

Mike is a contracted attorney at Baron Law LLC who specializes in civil litigation, estate planning, and probate law. He is a member of the Westshore Bar Association, the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Federal Bar Association for the Northern District of Ohio. He can be reached at mike@baronlawcleveland.com.