Baron Law LLC Now Hiring Paralegals and Office Admin.

Baron Law LLC is currently hiring paralegals and office management.  Details for this position are detailed below.

Hours: 20-30 per-week

Pay: $20.00 – $32.00 per-hour depending on experience.

Remote Workplace: Applicant would be able to work remotely most of the time while coming into the Independence office as needed. During the temporary pandemic, the office would only be utilized once or twice a week. This position is expected to be full-time once COVID has settled down with benefits. This position is currently a 1099 position.

Experience: Ideal applicant would have some paralegal experience (greater than one year) in estate planning, probate, and/or elder law.

Skills: Detail oriented individual who is a self starter and able to manage multiple tasks. Must have ability and experience to use Microsoft word and excel. Must have ability to work remotely and manage office tasks such as drafting, coordinating with clients, writing letters, managing software systems, completing probate forms and filing, ect. Although not required, experience with Quckbooks Online and Clio would be greatly considered.

Education: High School diploma or greater.

To apply, submit your resume to dan@baronlawcleveland.com. 

Covid-19 Photo

COVID-19 and the Continuing Importance of Powers of Attorney

Certainty in this uncertain time is peace of mind many families are finding themselves without. The Covid-19 pandemic is highlighting harsh realities of life all of us were aware of but chose to ignore. One such reality is the importance of comprehensive and up-to-date estate planning. Many parents, grandparents, established business owners, and seasoned professionals are all awaking everyday to the potential of expensive and long-term hospitalization with the chance of persisting and life-changing health consequences. One can’t fight Covid-19 directly, it isn’t a person or thing to combat with force or wit, however, mitigation and foresight are always available. Estate planning will allow you to proactively get your affairs in order and, worst case scenario, if you become infected, allow you to rapidly and intelligently respond in a way that meets you and your families unique needs. Whether you have no estate plan or are looking to update an existing plan, where should you start? Given the current health crisis, taking a look at your powers of attorney, or POAs, is a good place to start.

Power of Attorney

A comprehensive estate plan provides the instructions necessary for estate administration, via a will, while tax relief and flexibility with asset distribution can be accomplished via trusts. Critical issues and decisions during life, however, must be addressed separately. That is where your powers of attorney come into play. A power of attorney comes in many forms, but its primary purpose is to grant authority to one or more responsible parties to handle financial or health decisions of a person in the event of illness or other incapacity. Life, and its associated obligations and burdens, tend to continue regardless of one’s physical or mental health. As many families are finding out, the bills keep coming due regardless of COVID-19. Powers of attorney are protection that ensures affairs are handled and medical wishes are followed even if you are lacking capacity in mind or body.

In your estate plan you will want both a financial power of attorney and a healthcare power of attorney. Both are agency agreements that grant another individual the authority to make decisions, within a certain sphere of decisions whose terms you dictate, on your behalf. A financial power of attorney, as the name suggests, grants your agent the authority to make financial decisions for you. Managing investments, buying selling land or property, representing you in business negotiations, etc. Healthcare power of attorney works the same way but with healthcare decisions. If you are incapacitated or otherwise can’t decide for yourself, your agent will decide who your doctor is, what treatment you undergo, what medication should be administered, etc.

As always, the terms, powers, and limits for your agents are decided by you in the documents that appoint your agent. If you want to add limits on how long they are appointed, what issues they can or cannot decide, or when exactly their powers manifest, you can do so. Furthermore, you always possess the authority to dismiss them outright or appoint someone new.

Powers of attorney are important to have because spouses or family members will face difficulty and frustration gaining access to things like bank accounts and property that is in your name only. This can be especially damaging within the context of business or professional relations in which the “gears of industry” must keep moving. Regrettably, if an individual trusted to handle the business if something happens doesn’t possess the authority to so, significant or even fatal business consequences may result. The same goes for medical decisions, often treatment decisions must be made right there and then. Hesitation may mean permanent damage or death to you and if someone doesn’t have express authority to make those decisions, things get confusing, messy, and take a lot longer.

If you decide not to draft one or more powers of attorney and you end up incapacitated, then, in certain situations, a court is forced to appoint either a guardian or conservator and the family is effectively cut off from independently managing the relevant affairs of the incapacitated family member. Further, if a court is forced to action, the entire process will take longer, cost more, be public knowledge, and is immensely more complex than it otherwise should be. Having an experienced Ohio estate planning attorney draft the appropriate POAs can avoid a lot of headache and save a lot of money down the line.

Even with the uncertainly pandemics bring, certain estate planning questions always linger. Who will manage my finances and investments if I am sick or incapacitated? Who will pick what doctor treats me or if a risky but potentially lifesaving procedure should be performed? What if I am put on life sustaining medical support? In what situations and for how long will I remain on such support, if I want to be on it at all? These types of issues and questions also must be addressed and accounted for by your estate plan. That is why finding and working with experienced Cleveland estate planning attorneys are so critical. These types of decisions and potential consequences for your life and wellbeing are not things that should be done on the fly or with doctors and stressed out family members demanding a decision. Unfortunately, with COVID-19 cases becoming more and more prevalent with each passing day, the necessity of proper POAs is crystal clear and those without these documents are scrambling to find estate planning attorneys who are open and still taking clients. If your estate planning documents, especially POAs are out of date or incomplete, contact a local estate planning attorney right away. Courthouses and government agencies are closing daily, and you don’t want to find yourself without the stability of critical legal documents during this most unstable time.

COVID-19, for good or ill, has and will continue to change how we live, work, and survive. Fortunately, one aspect of life that has largely gone untouched is estate planning. Estate planning was smart to do before Covid-19 and it still is. Northeast Ohio has felt the touch of this disease like every county in the world has. Cleveland estate planning attorneys are working around the clock to meet the historic demand for quick and immediate estate planning and are currently utilizing more teleconferencing and remote legal services than ever before to make their existing and new clients comfortable and secure. Social distancing and stay-at-home orders are all proactive protection measures that the majority of Americans are following, even if they cause financial hardship or social strain. Estate planning also represents a proactive protection measure, however, it seldom causes any financial or social pain, it actually prevents them. As such, it’s strange that 50% of people don’t even have a simple will. Considering the ongoing crisis, make sure you and your family are in the 50% that protects, not the 50% leaving everything to chance.

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.

CARES Act – What Every Business Owner Should Know

The Covid-19 Economic Relief Package was approved on Monday, March 30th. This unprecedented $2 trillion dollar stimulus package may be incredibly beneficial for our clients, especially business owners.  Here are some of the more significant points you should know:

  • Single-households that earn $75,000 or less a year (as per their latest tax return) will be supplied with a one-time payment of $1,200.
  • Couples who earn $150,000 annually will receive a one-time payment of $2,400 with an additional $500 per child within that household.
  • These benefits are capped around the $99,000 income level and tapper between $75,000 and $100,000.

Small business protection and aid is a major component of the stimulus package. The key points include:

  • Businesses and nonprofits with 500 or fewer employees are generally eligible for assistance. Further, self-employed workers and gig workers also qualify. Qualified borrowers must have been in business before February 15, and must have paid employee salaries and payroll taxes or contractors.
  • The program is meant to ensure that businesses have the funds to pay their employees and to prevent layoffs. Loans offered through the program are forgivable, if used for their intended purpose: As long as a business receiving a loan maintains the average size of its workforce, it will only need to pay back the interest accrued, and the principal will effectively become a grant.
  • Businesses can receive loans up to $10 million at up to 4% interest rates, depending on how much they paid their employees between January 1 and February 29.
  • Loans are provided through banks, credit unions, and other lenders, and are guaranteed by the Small Business Administration. Loan applications should be submitted through lenders who are partnered with the Small Business Administration.

Link to the 2020 Stimulus bill: https://www.documentcloud.org/documents/6819206-CARES-ACT-FINAL-TEXT.html

Trust Adminstrator

What is an Administrator of an Estate?

Managing the affairs and obligation of a recently departed is no easy task. That is why most people take the time to plan their estate. Estate planning, at its fundamental essence, is leaving a plan and instructions for those who survive you regarding what to do with the “stuff” you leave behind. People are living longer than ever before and, consequently, are leaving more behind. Often without a proper plan in place, the loved ones and family members left to organize and account all the leftover worldly possessions are hard pressed to do everything required from them by a probate court within the statutory time limits.

Dying without a will, only exacerbates this difficultly and lengthens the time it takes to administrator an estate. Bluntly, dying without a will, or dying with an invalid will, is never a preferential option. Most people already have a very limited understanding of the probate process, and if you throw intestate succession and administration, with all the accompanying issues and legal winkles, a difficult and trying process only becomes more so. As such, consult with an experienced Ohio estate planning attorney to either properly plan your estate so dying intestate doesn’t happen to you or, for those facing an instate administration, find out all the answers you need regarding what, how, and when to administrate an intestate estate.

What does dying intestate mean?

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. There are two primary situations when a person is deemed to have died intestate, 1) there was no last will and testament, or 2) they had a last will and testament, but for some reason or another, it was found invalid.

Ohio intestacy laws may be avoided altogether with proper estate planning, a major aim of which is to ensure you have a will and that it is valid. It is important to note, however, that sometimes intestacy laws will control even if a valid will is subject to probate administration, an experienced estate planning attorney can inform you of these circumstances. Conversely, sometimes Ohio intestacy laws may not apply even if a decedent died intestate. As such, since the controlling law for dying without a last will and testament can vary dependent on circumstance, meeting with an estate planning and/or probate lawyer is highly recommended.

What is an administrator?

In the context of intestate estate administration, an administrator is, for the most part, functionally identical to an executor. Executors, however, are appointed in the last will and testament by the decedent while administrators are appointed by the probate court in the absence of an executor appointment. Note, however, that Ohio has explicit Ohio residency requirements for intestate administrators. Thus, out-of-state residents can only be named executors and cannot serve as administrators.

Why is an administrator needed, what do they do?

The duties of an administrator aren’t easy. The duties of an administrator are specific to each particular estate, however, there is a “core” group of duties and tasks each one must fulfill. Every administrator must:

  • Conduct of thorough search of decedent’s personal papers and attempt to create a complete picture of their finances and family structure.

 

  • Take possession, catalogue, and value all estate property.

 

  • Maintain and protect estate assets for the duration of the probate proceedings.

 

  • Directly notify creditors, debtors, financial institutions, utilities, and government agencies of decedent’s death.

 

  • Publish notices of decedent’s death, usually a newspaper obituary, which serves as notice and starts the clock running on the statute of limitations for creditor claims on the estate.

 

  • Pay or satisfy any outstanding debts or obligations of decedent.

 

  • Represent decedent during probate court proceedings.

 

  • Locate heirs and named beneficiaries and distribute respective assets at the appropriate time.

These duties occur during the probate process, which is a major reason why probate takes many months to complete. Especially within the context of intestate probate administration, where no preplanning, accounting, or collection of information regarding the decedent’s estate was likely done.

Because intestate administration is such a time-intensive and laborious process, many people take the time to plan their estate and attempt to avoid probate entirely. Often trusts are a good option to avoid probate. With trusts, estate assets can be distributed right away, no executor or administrator is needed, and many mornings, which otherwise would be spent in probate court, are freed for personal enjoyment. Contact an Ohio trust attorney to see if avoiding probate through the use of trusts is right for you and your family.

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.

Helping You and Your Loved Ones Plan for the Future

GST: Generation Skipping Transfer Tax

Staying abreast of current tax changes is critical to getting the most “bang for your buck” when it comes to estate planning. 2018 had significant, albeit likely temporary, increases in the federal estate, gift, and generation-skipping transfer tax exemptions. For example, individuals who previously used their previous lifetime gift tax exemption amounts can now effectively double the amount of assets and money that can be transferred without incurring any federal gift tax consequences. As such, it is a good idea to reevaluate your current estate planning to determine if your estate planning goals are being met and if there are now unexploited taxation opportunities with the recent changes in law. For example, many people, in light of the increased lifetime gift tax exemption amount and generation-skipping transfer tax exemption amount, are making gifts to children, grandchildren, or close family friends with either outright distributions or through new or existing trusts. The first step, however, in manipulating recent changes in federal law to your personal benefit is understanding the underlying tax structures. One significant theory of taxation is the generation-skipping transfer tax. This tax, however, is only one of many which may affect your estate, as such, contact an experienced Ohio estate planning attorney to make sure the most goes to your friends and family.     
 

  • What is the GST Tax? 

First question is the most common, what is the generation-skipping transfer tax? The generation-skipping transfer tax or, “GST”, is a flat, 40% tax on transfers to specific persons, sometimes called “skip persons,” such as grandchildren, other family members more than one generation from you, nonfamily members more than 37.5 years younger than you, and also certain trusts. Whether or not transfers to a particular trust are subject to GST taxation is primarily focused on who are named as beneficiaries and their generational status to the grantor(s). Avoiding GST taxation and preserving the most amount of your money and assets is one of the primary goals for you and your estate planner.     

  • How is it triggered? 

GST taxation can be triggered either intentionally or unintentionally via transfers of assets or money. Intentional transfers, such as purposefully leaving bequests, trust distributions, or inheritance to “skip persons.” Unintentional transfers, such as children predeceasing grandchildren and an estate plan failing to take this possibility into account when calculating future distribution structures.   

When a particular transfer is deemed to trigger the GST tax, the next step is to calculate whether it falls into any exemption categories and if there is any money left in any of those categories to shield the transfer from GST taxation. The two major exemptions are the annual gift tax exclusion, currently $14,000 per recipient; $28,000 for married couples, and the Unified Tax Credit, approximately $11.8 million lifetime exemption and approximately double that amount for married couples.   

  • How do I use exemptions to avoid GST?  

Utilizing tax exemptions to avoid GST essentially boils down to properly documenting and earmarking transfers that may trigger GST taxation and filing any appropriate paperwork with the IRS. Again, regardless of whether these transfers are made during the grantor’s lifetime or at their death, as long as transfers either skip a generation or are made in trust for multiple generations, GST taxation must be considered and addressed.  

Estate planners take the transfers you want to make, then plot different tactics for transfer dependent on your overall goals and realities for your particular estate. Many, few, or no options may be available to avoid GST in your circumstances. Sometimes certain gifts are not applied toward the exemption, such as “annual exclusion” gifts and direct payments for medical or education purposes, thus these can be made completely tax-free. Other times decisions have to be made to temporary hold off on a transfer or to shift a transfer to another spouse to use their tax exemption amounts. Furthermore, the estate planner must decide whether to file a gift tax return or plan the transfer so it appears as an incomplete gift. Just because a transfer looks like it falls within the bounds of a taxation exemption doesn’t mean the transfer magically is ignored by the IRS, your estate planning still has a lot of paperwork and legal leg work to do.    

  • How to Avoid GST with trusts 

Trusts provide a multitude of estate planning benefits, one of the most popular uses for them is minimizing or avoiding estate taxation, in this context, GST taxation. A-B trusts, bypass trusts, and dynasty trusts are all examples of trust vehicles that can mitigate or completely avoid any concerns you might have with generation-skipping transfers. Trust use here primarily concerns manipulating trust funding and available exemption amounts in conjunction with the practical needs of you and your family. Each trust type, however, has their own benefits and disadvantages. As such, it is important to talk with an Ohio estate planning attorney to find out the pro’s and con’s of using a trust in your circumstances.  

Regardless of whether a trust is right for your estate planning goals, now is the time to review your current estate planning documents to ensure they remain in accordance with your intent and the recent changes in law. Often many estates are planned around and use trusts that are funded according to formulas tied to now changed federal estate exemption amounts. As such, with the recent increased estate tax exemptions, such trusts may be funded with significantly larger amounts than you anticipated when you originally met with your estate planner. Further, a comprehensive review of your trust and estate planning documents will allow you to assess their effectiveness in light of the changes to the law, changes in your personal life, and changes to your estate planning goals.    

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.  

How to Lower Your Property Tax – Fighting Overvalued County Appraisals

 

What: Property Value Appraisal

Ohio operates on a system in which county auditors reappraise every piece of land and every building located in their county every six years. These base appraised values are then multiplied by local tax rates. This value is what is shown on local county auditor’s website and is often used as a base line when determining potential real estate taxes.

This reappraisal occurs in different counties at different times. Naturally, it is just too much for every local government to reappraise everything all at once. So, Ohio uses staggered reappraisal with different groups of counties undergoing reappraisal or updating during different tax years.

The following counties recently have either finished reappraisals or recently undergone updates:

Update Counties

 

Allen Coshocton
Guernsey Sandusky
Vinton  

 

Reappraisal Counties

 

Belmont Brown Crawford Cuyahoga Erie
Fayette Highland Huron Jefferson Lake
Lorain Lucas Morgan Muskingum Ottawa
Portage Stark Warren Williams  

 

Why: Property Reappraisal and Updating can result in a Bigger Tax Hit

Most importantly with reappraisal and updating, is that they can result in increased property values and consequently increased tax liability. Property owners in particular counties subject to reappraisal or update will see new property values reflected in their property tax bills that arrive in the mail either December or January.  This is an often-overlooked tax consequence that many people fail to plan for and can eat up an otherwise expected, and critical, tax refund. As such, many people desire to keep their property values low, at least in regards to taxation, and want to challenge their county auditor’s assessment of their property value. This is where experienced Cleveland legal attorneys come in.

How: Filing a Complaint to Challenge Property Valuation

The period for filing formal challenges to a county auditor appraisal generally begins January 1 and ends March 31 so contact an attorney sooner rather than later if you want to challenge a recent change in your property value. Generally, property owners can only challenge an assessment one time every three years.

How you challenge an improper auditor valuation is with a complaint filed with your local county board of revision where the property under dispute is located. This complaint is sometimes referred to as a “complaint against valuation” and asks 14 boilerplate questions. Questions such as has the property been sold within the last 3 years, have you made any improvements to the property, and your justifications for requesting a change in value.

This form is found on every county auditor’s website as well as the Ohio Department of Taxation’s website. A lot of individuals challenge land valuation so the process, at least in some ways, is streamlined. Note, however, if the property owner challenging valuation is a business, an attorney must almost always sign the complaint.

The most common reasons property values are challenged include declining market values in a depressed area, functionally and/or economically obsolete properties, declining rents in tandem with vacancies, and damage caused by non-human agency, such as fire, flood, earthquakes, or mold. Further, those who recently purchased a property in an arms-length transaction for less than the county auditor’s value, often have a strong case. Note, however, recent Ohio Supreme Court rulings adjusted the evidentiary rules for property owners looking to use a recent arms-length transaction as a basis to challenge the value of real property. The important takeaway from recent legal rulings is that appraisal evidence must be carefully considered before presentment to the board of revision. As such, experienced legal counsel should be retained before filing any tax appeal.

Once the complaint is filed and received by the board of revision, the board sets an evidentiary hearing. The hearing usually lasts between 15 to 30 minutes and takes place in front of a panel of decisions makers, usually the county auditor, county treasurer, and the president of the Board of County Commissioners. At this hearing, an attorney appears on your behalf and presents arguments, evidence, and witness testimony to prove the actual property value. Depending on the value or discrepancy of the value under dispute, other interested parties, such as local school districts, will appear via their own counsel and argue in favor of the higher value.

After the hearing, the board of revision makes its decision of the value of the real property. If you took the proper steps, gathered the right documents, and hired the right attorney, your property value should be changed to reflect the real value and you can avoid any significant tax hit in the near future.

When: When should I challenge?

As with every legal question asked of every attorney, the answer is always going to be, it depends. But as rule of thumb, if it seems like no rational buyer would purchase your property for what the auditor appraised it, calling your local Cleveland business attorney is probably a good move.

Another critical factor in assessing when to challenge is the sufficiency of evidence currently in your possession. This is where good legal counsel comes in. Attorneys are well-versed in hiring qualified appraisers to determine the initial overvaluing of the property, generating presentable reports for the evidentiary hearing, and identifying the relevant purchase transaction documents. If you are asking for a significant change in value, it is highly likely opposing attorneys will come out of the woodwork to counter your appeal. As such, experienced local counsel is often the difference between a waste of time and money and significant tax saving.

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.

Helping You and Your Loved Ones Plan for the Future

House in Trust with Mortgage

Can I Put My House In A Trust If It Has A Mortgage?

More and more people are becoming ever more concerned with either protecting their assets, maintaining eligibility for Medicaid, or leaving as much as possible to children and future grandkids. As such, more and more people are realizing the remarkable utility of trusts within their estate planning. One’s residence often represents the most significant asset an individual or couple possesses, and for many, financial assistance is needed to purchase it, that is mortgages. A common question presented to Cleveland estate planning attorneys is, can protect my house with a trust if it has a mortgage? As with any legal question, the answer is not black and white. 

  • What is trust? 

To understand how the what, when, and how of funding your trust with a mortgaged house, we must start with the basics, what is a trust? A trust, to put it simply, is a private agreement that allows a third party, a trustee, to manage the assets that are placed inside the trust for the benefit of trust beneficiaries. There are innumerable types of trusts, each with own its respective legal conventions and purposes. A critical aspect of trusts is that the assets housed within them usually aren’t counted as a part of the trust creator’s taxable estate. Thus, when the owner of the trust creates the trust and properly funds it, the assets go from the owner’s taxable estate to the trust. Afterwards, when the owner dies, the assets are not in the owner’s estate and subject to probate, and if the trust is drafted properly, are further ignored for the purposes of Medicaid eligibility. Further, trust assets pass via the beneficiary designations set down when the trust was created. These conveyances via beneficiary designation are much simpler, quicker, and cost-effective then going through probate and can be halted or expedited when circumstantially advantageous depending on the terms of the trust.   

  • When can a mortgage be called?  

The next basic to understand is when can your bank come after your house, i.e. a bank calling on a mortgage. A mortgage being called is when a financial institution/holder of the mortgage demands that the full amount of a mortgage be paid. When this can occur is conditional and which events will trigger are often denoted within the mountain of legal documents that physically make up your mortgage. In the context of funding a trust with a mortgaged house, your “due-on-sale clause” is what your estate planning attorney will be concerned about.    

A “due-on-sale clause” is a contract provision which authorizes a lender (your bank), at its discretion, to collect on the loan, i.e. declare it immediately due and payable if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender’s prior written consent. This is fair because banks depend on mortgages getting paid off, or at least foreclosed, and the mortgage contract is between you and the bank, not the potential buyers and the bank.  

  • How can a mortgaged house in placed in trust without having the mortgage called?  

Any “due-on-sale clause” facially seems to be a death nail to any thought of funding trust with a mortgaged house, I mean, not many people have thousands, if not hundreds of thousands, of dollars in liquid assets to immediately pay off a house. This is where the Garn-St. Germain Depository Institutions Act of 1982 comes into play and your estate planning attorney earns his money. The relevant part of the Garn-St. Germain Act in the context is 12 U.S. Code § 1701j–3, subsection d, as follows:  

(d) Exemption of specified transfers or dispositions.  With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon— […] 

(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; … 

So, to bring everything back down to Earth, this subsection possesses the two “prongs” of the Garn-St. Germain test, occupancy and beneficiary status for the trust makers for the mortgaged house. When there is a mortgage, a trust must be properly drafted to include specified reserved occupancy language in the trust to satisfy the occupancy prong of Garn-St. Germain. Simply, the trust makers, you, must specifically reserve the right to live in the house. Further, in some way, the trust makers, must be a trust beneficiary. The beneficiary status prong usually isn’t an issue with self-settled trusts given their nature, i.e. trusts made with the intent to provide some tangible benefit to the trust makers. An argument can be made that the reservation of occupancy rights inherently makes the settlors beneficiaries, however, more cautious estate planning attorneys further make trust makers income beneficiaries as well.  

Facially, drafting a trust to satisfy the prongs of the Garn-St. Germain test appears straight-forward, however, care must be taken when making your trust. The interplay between the actual language of a trust can have profound effects on taxation, ownership, inheritance, and eligibility for state and federal assistance programs whose admittance guidelines are based on income and asset thresholds.    

Now it is important to note that the issue of a mortgage is an issue apart from Medicaid eligibility, though often the two are interrelated. Addressing both concerns requires the same solution, precise drafting of trust language that is statutorily compliant.  Under the Garn-St. Germain Depository Institutions Act of 1982, placing the home in the MAPT does not trigger the “due on sale clause” contained in most mortgages provided certain steps are taken and legal standards are satisfied. Thus, with a knowledgeable estate planning attorney, you can remain Medicaid eligible and avoid Medicaid Estate Recovery, while still living in your home and paying the mortgage as you always have.  

Helping You And Your Loved Ones Plan For the Future

Advanced Directives and Your Estate Planning

What are Advanced Directives?

Advance directives are a set of documents where you are appointing another individual to make medical decisions on your behalf. Typically, we have in these documents a living will, HIPPA authorization, and then health care power of attorney.

How Are These Documents Used?

Living Will- A living, will not to be confused with the last will and testament, is used where you are telling the world that you do not want to be kept on life support in the event that you have little to no brain activity. Instead of leaving that decision on your loved ones, you’re making the decision for yourself that you don’t want to be kept artificially alive.

Healthcare Power of Attorney- The agent of your healthcare power of attorney can make decisions about your health, such as a risky surgery.

HIPPA Authorization- You are giving your loved ones or your agent the ability to obtain medical records as well as something as simple as attending a doctor’s meeting.

How Can You Obtain These Documents?

There are a few ways that you can obtain these documents. One way is through the Cleveland Clinic or Metro Health; any big hospital has standard forms that you can complete.

However, we recommend you discuss these options with an attorney so you can discuss what you want and make sure that is carried out in the right manner.


If you are unsure if you have these advanced directives in place, if you know you need these documents, or if you are putting together some estate planning, this is a really important step. Contact us today to get a free consultation or visit us online to learn more.

Estate Planning Attorney Baron Law

D.I.Y. Estate Planning: Saving a Dollar Now, Lose a Thousand Later

D.I.Y. Estate Planning:  Legal Zoom, Rocket Lawyer, and Youtube has granted an unprecedented amount of legal information to the public. Online forums, blogs, and television allow people to converse at any time and anywhere about pretty much anything. Nowadays ordinary people can undertake their own legal research, legal drafting, and, if necessary, personal representation.  Just because you can do something, however, doesn’t mean you should. Google searches and online videos are not a substitute for the advice and guidance of an experienced Ohio attorney and many people put themselves in a bad position after they convince themselves that an attorney is simply not necessary.

At the end of the day, do-it-yourself legal services is all about saving money and time. People don’t want to spend hundreds if not thousands of dollars on legal services and spend the time conversing and meeting with an attorney. Online legal materials, at least the cheap or free ones, are great at providing a false sense of security, that everything is straight-forward, do X and you’ll get Y.

Law firms hear the same problems and fix the same issues from self-representation every day. People who, after a quick google search, start drafting their own wills, LLCs, and contracts. People who put their faith in a disinterested corporation and a handful of document templates. Legal Zoom and Rocket Lawyer are not law firms and they do not represent you or your interests, they explicitly say so on their websites. They cannot review answers for legal sufficiency or check your information or drafting. An experienced Cleveland estate planning attorney, however, properly retained and with your best interests in mind will accomplish everything you expect, and often more.

Hired attorneys are under legal and professional obligations to do the best job possible. They don’t want to get sued for malpractice, they want you to pay your legal bill, and they want you to refer your friends and family. A particular client is concerned with a tree, while the attorney pays attention to the forest. A proper attorney will draft documents correctly with established legal conventions in mind, legalese isn’t something done for attorneys own benefit, it has a definitive and beneficial purpose. A lot of trouble is caused by D.I.Y. legal drafters and estate planners due to typos or the inclusion of legalese for legalese sake. Further, a knowledge of federal, state, and local law along with local procedure and jurisdictional customs is necessary to obtain a proper outcome with minimal cost and stress. At the end of the day, the legal system is made up of people, knowing who to talk to and when is a large reason why attorneys are retained.

We live in a brave new world, never before has so much legal information been so readily accessible to so many. In the same vein, never before has our lives been so complex and estate planning matches this. Attorneys do more than drafting and research, they advise you on the best ways to protect your family and assets in light of an ever-changing legal landscape and your own personal life and dreams. Often do-it-yourself legal services are simply not worth the risk and lull you into a false sense of security. Ultimately, you need your estate planning documents to do what you expect them to. As such, call of local Ohio estate planning attorney and make sure yours are done right.

Guardianship and Your Estate Planning

What is Guardianship?

A guardianship is where a person has the legal authority to care for another.

Are There Different Types of Guardianships?

Minor Children-The most common type of guardianship is with minors. If something happens to children under the age of 18, then you need someone to act as a parent. A misconception is that if you appoint someone as a godparent over your child, this does not give that person legal authority over your child.

Elderly- As we get older, we may need someone who can watch after us and make sure we are getting what we need and doing what we need to as well.

Adults with Special Needs- Guardianship is also needed for adults with special needs so that they have someone to watch over them.

How do I Establish Guardianship?

With planning, there are three ways to appoint someone as a legal guardian, through:

  • Power of Attorney
  • Will
  • Trust

Without planning, you have to go through a court order which is far more expensive and gives you less power.

When Should You Establish Guardianship?

Anyone with children should immediately establish guardianship. The thing is, you never know what is going to happen, and that is why it is best to plan for the future just in case. If it is on your mind, do it now.


If you need to establish guardianship over your children, an elderly loved one, or a loved one with special needs; you can also learn more by visiting our website or by contacting us at Baron Law today.