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Baron Law Cleveland Business Attorney

How Do Businesses Collect a Debt?

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Cleveland, Ohio, business law firm, Baron Law LLC, Cleveland, Ohio, answers questions on the laws which need to be followed when attempting to collect a debt.  For more comprehensive information contact Baron Law Cleveland to schedule an appointment if you have found yourself in a situation where you are unable to collect a debt.

Unfortunately, people don’t pay their bills on time, sometimes not at all. This is just a reality of business. Tenants fail to pay rent, purchasers don’t pay in full, and business associates don’t uphold their end of the bargain. Naturally, the human reaction is to immediately go after wrongful parties and get what you’re owed. In reality, however, debt collection is not a simple and straight forward process. That is why third-party collectors are often used. However, over the many decades and centuries of business, whether a legitimate debt was owed or not, these collectors went too far in attempting to right a wrong.  In response, nowadays there are rules and regulations governing debt collection practices to prevent misconduct. As such, cavalier or aggressive debt collection practices can, ironically, make a legitimate debtor liable for more than the debt they are trying to collect on. This is why contacting the services of a local Cleveland area business attorney is so critical. A single lawsuit over debt collection misconduct can ruin a quarter, but longtime or routine debt collection misconduct can lead to bankruptcy via litigation.   

  1. What laws apply when I’m trying to collect a debt? 

The three main laws that every third-party debt collector should be aware of when collecting debts is 1) the Fair Debt Collection Practices Act, 2) the Ohio Fair Debt Collection Practices Act, and 3) the Consumers Sales Practices Act.   

  • FDCPA – this federal law limits the behavior and methods of third-party debt collectors who are trying to collect a debt for another, whether a real person or otherwise. Within are rules regarding timing, method, and form of contact, causes of action for misconduct, and duties of specialized debt collection personnel.  

 

  • OFDCPA – This Act primarily concerns the legal conventions and guidelines that must be observed when a debt is assigned for collection by another, i.e. a third-party creditor. The Ohio FDCPA adds additional safeguards to the Federal FDCPA in order to ensure assignees of debts are legitimate businesses with legitimate credit claims.   

 

  • CSPA – this law primarily provides causes of action for deceptive trade practices, of which debt collection is regularly a context. Various Ohio courts have said that various violations of the FDCPA constitute a violation of the CSPA in that the purpose of both acts is to prohibit both unfair and deceptive acts and any violation of the FDCPA is necessarily an unfair and deceptive act or practice in violation of the CSPA. 

 

What are the things I can’t do when collecting a debt? 

Simply, a third-party debt collector cannot engage in deceptive trade practices. What is a deceptive trade practice is a much litigated issue. However, the particulars of what conduct constitutes a deceptive trade practice are too numerous to go over here, but a local Ohio business attorney will be more than happy to fill you in on the details and makes sure you’re not violating State and/or Federal law.  

The short answer though, in the context of debt collection, is that a deceptive trade practice is an activity by an individual or business that is meant to mislead or lure a debtor into paying a debt that isn’t owed, paying more than is owed, attempting to collect in an aggressive, harassing, offensive manner or failing to follow proper form when communicating with a debtor. Within the FDCPA, OFDCPA, and CSPA, there are sections which explicitly state that a violation or one or more provisions of the law is conclusively a deceptive trade practice thus justifying damages.  

How much lability could I be facing for improper debt collection?  

Just under the FDCPA alone, any debt collector who fails to comply with any provision of this law with respect to any person is liable to such person in an amount equal to the sum of 

(1) any actual damage sustained by such person as a result of such failure; 

 (2) additional damages up to $1,000; and/or 

 (3) reasonable attorney’s fees if the court finds them justified. 

 

How do I make sure I’m not breaking the law when trying to collect?  

State and federal law must be followed to the letter when attempting in collect on a third-party debt. An Ohio business attorney can create a compliant debt collection program, complete with compliant forms and communications, to ensure any legitimate debt isn’t consumed by legal damages.  

There are, however, some standard methods to remain compliant under state and federal law. 

  • Mini Miranda Notice – the law requires that any debt collector inform a debtor in the initial communication that “this communication is from a debtor collector. This is an attempt to collect a debt and any information obtained will be used for that purpose.” This is commonly called the mini-Miranda and puts the debtor on notice of who they are speaking with and why. If the first communication with the debtor is oral, this notice must be given orally and included in the first written communication. Regardless of who initiates communication, this notice must be given.

 

  • Debt Validation Notice – every third-party collector must within 5 days of the initial communication send the debtor written notice containing the following:  

1) the amount of the debt,  

2) name of creditor that’s owed the debt,  

3) statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector, 

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector, and 

 (5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.  

 The purpose of this notice is to inform debtor of important rights, timing deadlines, and authenticity of the debt being pursued.  

 It is never fun for either the debtor, creditor, or collector to pursue an outstanding debt. Feelings get hurt, lives are disrupted, and valuable business resources and time is wasted. Therefore, it is wise to ensure that state and federal laws are not being broken on top of all that. Throwing potential litigation in with the contentious profession of debt collection begs for trouble.  As such, wise debt collectors retain the counsel and guidance of experienced business attorneys to enable them to focus on recovering debts, not worrying about compliance with government rules and regulations.  

 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.   

 

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.   

 

 

Baron Law Cleveland, Ohio

Procedures To Shorten Or Avoid Probate Of An Estate

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Cleveland, Ohio, estate planning lawyer, Daniel A. Baron, Ohio, offers the following information on what types of probate procedures shorten or avoid the need to probate and estate when speaking with your attorney when you are establishing your comprehensive estate plan.

When an individual dies, their “probate assets,” such as property not dispensed via beneficiary designations, transfer on death designations, or held within trust, go through probate.   

Probate is the legal process provided by Ohio law where a probate court “sets the table” to administer a decedent’s estate. Namely, the probate court appoints an authorized fiduciary for decedent’s estate, determines the validity of a will, if there was one, oversees the determination of probate assets of decedent, and ensures probate assets are collected, maintained, and distributed to the proper parties according to decedent’s last wishes or, if there was no will, according to the laws of Ohio.  

 Probate is not a straight-forward process and it takes, usually, at least six months to complete and close an estate. Therefore, the two most common questions clients of estate planning attorneys ask is, why does probate take so long and how can we shorten or avoid the probate process. There’s a handful a probate processes one can use, if the circumstances of the estate qualify, within the Ohio legal codes to shorten or avoid the need to administrate probate. The following are of the few most widely used accompanied by minor explanations. Naturally, a Cleveland estate planning attorney can provide more expansive elaboration on these processes and guide you towards the ones that are best suited for a particular situation.  

Filing Will for Record Only

 A Will can be filed with the probate court when no probate administration is expected or required for the estate. For this type of probate proceeding, no appointment of an executor is needed. The benefits of going this route is administration costs are totally avoided but since the Will was properly delivered to the court, federal estate tax returns can be filed and exemplified copies of the filed Will are obtainable for out-of-state probate proceedings. This process is often used when certified copies of a Will are needed for administrations of out-of-state property owned by Ohio residents.  

 Summary Release from Administration 

 A summary release from administration is the most abbreviated probate proceeding for obtaining a release of assets. Usually, this type is used for small estates, such as those with minor amounts of personal property or a small bank account to distribute. The most common situation where a person would go this route is to get reimbursement from the estate for funeral expenses. Again, no executor is appointed in this proceeding.  

 Ohio law, however, does limit which estates may use this type of probate proceeding. This process may only if used if either:   

 

  • If value of the assets of the decedent’s estate does not exceed the lesser of $5,000 or the amount of the decedent’s funeral and burial expenses, any person who is not a surviving spouse and who has paid or is obligated in writing to pay the decedent’s funeral and burial expenses, may apply to the probate court for an order granting a summary release from administration: or 

 

  • There is a surviving spouse, the decedent’s probate assets do not exceed $45,000, the spouse is entitled to 100 percent of the family allowance, and the funeral bill has been prepaid or the surviving spouse is obligated to pay the funeral bill.  

 Release from Administration 

 A release from administration is the next tier up in regards to available abbreviated probate proceedings for obtaining a release of estate assets. No executor is appointed for this proceeding but a commissioner might be used if the facts surrounding the estate are more complicated than anticipated or if a determination of decedent’s ownership rights is necessary. 

 For this proceeding, the applicant certifies the nature and value of the probate assets to the court and the identity of decedent’s creditors and the amounts they are owed. If the decedent died testate, i.e. with a valid Will, the application to relieve the estate from administration is filed with the Will, along with all of the forms necessary to admit a Will for probate. Further, the decedent’s next of kin and devisees under the Will are notified and are parties to this process. If everything goes as it should and all the requirements are met, the probate court will issue an order releasing the probate assets, the payment to creditors with valid claims, and the distribution of probate assets.     

 Again, Ohio law does limit which estates qualify to use this type of probate proceeding. The process may be used only if either: 

  •  There is no surviving spouse or the surviving spouse is not entitled to all probate assets and the probate assets are $35,000 or less and the decedent died on or after November 9, 1994. (Different asset levels apply for qualification if decedent died prior to this date.)  

 

  •  The surviving spouse is entitled to all of the probate assets and the probate assets are $100,000 or less and the decedent died on or after March 18, 1999. (Again, different asset levels apply for qualification if decedent died prior to this date.) 

 Avoiding or limiting the probate process through selective use of codified probate processes is one way of preserving estate assets and saving everyone’s time. There are, however, other methods that avoid probate but also carry positive benefits for the estate, heirs, and intended beneficiaries. Creative and conscientious use of estate planning tools such as trusts, pour-over wills, and P.O.D. and T.O.D. designations can see even more savings for friends and family of a recently deceased. Contact a local Ohio estate attorney and find out the best way to plan your estate to maximize what is left behind for those you love and save time and expenses when going through probate.   

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.   

 

 

 

 

Baron Law Cleveland - Estate Planning Attorney

Knowledge Is Power – Why Knowing The Difference Between Irrevocable And Revocable Trusts Is Critically Important.

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Cleveland, Ohio, estate planning law firm, Baron Law LLC, Cleveland, Ohio, offers the following information on the differences between a Revocable Trust and an Irrevocable Trust.  Contact Baron Law Cleveland to ask and have answered your questions on what the differences are and what would suit your needs best.

Your estate plan consists of many documents and covers a lot of bases. From protecting assets from creditors and litigants to avoiding probate where desirable, a comprehensive estate plan protects you while you’re living and provides for loved ones after death. Because estate plans are, by design, comprehensive, a lot of legal jargon is thrown around and often it’s difficult to keep track of all the nuance and detail. You can put your faith in your financial adviser or estate planning attorney and trust them completely with little or no understanding of what they’re actually doing. That certainly is an option, however, the better course is to ask questions and endeavor to remain informed as possible.  

That said, one of the most common questions posed during an initial estate planning consultation is, what is the difference between a revocable and irrevocable trust? Since trusts represent one of the most utilitarian estate planning tools, they have the ability to do many useful and advantageous things in regards to estate planning, understanding the difference is critical to providing context to advice dispensed by Ohio estate planning attorneys.  

 

  1. Revocable Trusts

Revocable trusts, commonly referred to as living trusts, are trusts that the grantor/settlor can change or cancel during their lifetime. The most significant aspect of living trusts is that the grantor usually keeps control over the assets placed in the living trust and, as such, receives no tax relief for those assets. Similarly, the grantor can also appoint themselves trustee of the living trust to dispense that control.  

To use a simple metaphor, a trust is a treasure chest. Putting assets in the chest, the trust, protects the assets from particular threats outside and establishes rules which govern what is placed inside. The major distinguishing characteristic of living trusts is that the grantor, owner of the trust, keeps control of the key that unlocks the treasure chest and can get at what’s inside.  

So, naturally, the next question after what is a revocable trust is, why would I want one? The advantages of living trusts are numerous but are highly particular to individual circumstances. An Ohio estate planning attorney is in the best position to judge what an individual’s needs are and the best ways to meet them. Generally, however, the primary advantages of using living trust are avoiding probate, directly providing for distribution of assets through trust beneficiary designations, privacy, trust inventories are not public record, and maintaining control of assets trusts during life and post-death.   

  1. Irrevocable Trusts  

Irrevocable trusts are trusts in which the grantor relinquishes all control and ownership over the trust and the assets used to fund the trust. Thus, the trust cannot be changed or canceled without the beneficiaries’ permission. Prior to trust formation, grantor can dictate whatever terms they desire to govern the trust, but after formation, those terms control independent of grantor’s wishes and desires.  

So, again, why would anyone give up control and chose irrevocable trusts? As mentioned previously, with living trusts, grantors keep the key to the treasure chest. With irrevocable trusts, however, the grantor gives the key to another, namely a trustee. Since grantor no longer has the key, grantor can no longer get what’s inside the chest. Since the assets in an irrevocable trust no longer belong to grantor, at least in the eyes of the law, this has major tax and legal implications. 

These tax and legal consequences are the primary advantages of irrevocable trusts, and what distinguishes revocable from irrevocable trusts. First, since control over trust assets is relinquished, the IRS does not consider trust assets to be in grantor’s taxable estate. Thus, estate, income, or gift taxes may be avoided or reduced in certain circumstances. Further, assets within an irrevocable trust enjoy protection from creditors and litigation. Of particular importance for seniors, assets within this type of trust are not counted as an asset for eligibility in Medicaid or other government assistance programs. A common tactic is to place a martial home, usually the largest asset, in trust. Thus, eligibility is maintained but the house can still be lived in. This sheltering of assets while still maintaining use is at the core of irrevocable trusts. Even though direct control is relinquished, grantors dictate the terms of the trust. Such terms often mandate to the trustee that such trust assets are used for the health, support, and maintenance of the grantors. Thus, grantors still get to enjoy and profit from assets but get the benefits of not, technically, owning such.  

Naturally, the question everyone asks is which one is best. Unfortunately, as with most things financial and legal, there isn’t a straight answer. Dependent on the circumstances, such as estate planning goals, family structure, available estate assets, either or both types of trusts may be advantageous to use. A Cleveland estate planning attorney is in the best position to judge what is most appropriate for a given situation.  

Regardless of which is most appropriate, the most critical part is funding your trust. Picking what type or types of trusts is best is the easy part. The hardest part, and the one most often overlooked, is properly funding a trust. More often than not, people think after creating the trust the work is done. This is patently false. A trust without proper funding isn’t worth the paper it’s printed on. If you’re asking yourself how do I fund my trust or is my trust funded, please contact an Ohio trust attorney as soon as possible. The security you though you bought with your trust is likely imaginary.   

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.  

 

 

Baron Law Cleveland LLC

What Is An Estate Plan, Part I – Death Documents?

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Baron Law LLC, of Cleveland, Ohio, offers the following information on different components of an Estate Plan.  To see what plan is best suited for your needs, contact Baron Law, LLC, Cleveland, Ohio.

By failing to prepare, you are preparing to fail.” Benjamin Franklin

Estate planning is a concept that many people know about, but few fully understand. To most, planning an estate consists simply of establishing a trust or drafting a will. Granted, these are indispensable aspects but such a limited view only serves to handicap successfully preparing for impending mortality.

Aside from ensuring assets pass to heirs and designated assets are freed from probate, a comprehensive estate plan can address a innumerable issues and provide effective solutions. Estate plans may be tailored to provide consistent income for retirement, guarantee responsible individuals are in place in moments of crisis, and medical wishes are communicated and followed. At the end of the day, however, an estate plan is simply a collection of legal documents. Each legal document has a specific purpose, possesses particular advantages, legal conventions, and applicable situations. Nevertheless, most estate plans do consist of a “core” of legal documents that are often advantageous to have regardless of health or financial situation. An estate attorney will draft the documents critical for a given situation but the following is a list of the “core” legal documents that will likely make up any estate plan.

The following consists of the typical documents within a traditional estate plan and is by no means exhaustive. Estate plans are reflective of their owners and are tailored specifically to that person or couple and the needs of surviving family members and financial interests. Again, an attorney is in the best position to advise and guide you on what the major estate planning concerns are and the best legal methods to take. This part of a two-part series discusses the estate planning documents largely concerned with providing instructions in the event of death.

Last Will and Testament

A last will and testament is the document most people associate with estate planning. The will memorializes the “last wishes” of a decedent and guides surviving friends and family on how to split up an estate according to the beneficiary designations and instructions present in the document. There are many types of wills and each one is drafted uniquely for the individual and their estate.

Though wills are specifically created, all share important uses and common characteristics. Again, wills bequest particular money and assets to chosen friends and family. Further, they provide for the how and when such bequests will take place. Some instruct money only to be given on an 18th birthday or only between children of a first marriage. Of critical importance, wills are also the primary method of election of guardians for minor children or disabled familial charges and executors of the estate. The provision of guardianship, a clear plan for property distribution post death, and executor election are the primary incentives for drafting a will. Addressing all is an utmost necessity for ensuring peace of mind for those left behind.

Wills, with some exceptions, all possess the same legal conventions controlling their creation. The point of these legal rules is to ensure the legitimacy of the will, the authenticity of the last wishes evidenced by the document, and protect estates from predatory practices and opportunists. Generally, a legally operative will must be in writing, signed by testator of sound mind, and witnessed by two competent witnesses.

While most estate assets are covered under a will, some assets are not. The following are an example common asset outside of a will, also sometimes referred to as non-testamentary assets: retirement accounts, life insurance proceeds, and property owned jointly with right of survivorship. Non-testamentary assets are normally bequeathed by independent beneficiary designations within the documents of creation or on associated accounts. As such, these assets normally do not undergo probate and are available to beneficiaries much quicker than assets passed via a will and the longer probate process. Distinguishing between testamentary and non-testamentary assets can have critical tax consequences for an estate, as such, please consult an estate attorney for guidance.

Wills are a mainstay and common tool for estate planning, however, its drafting can rapidly grow in complexity due to a convoluted family structure or an expansive estate. Again, an attorney should be retained to draft a will thus ensuring last wishes are effectively communicated and legally valid within a probate court. Failure to draft a will or an improperly drafted or implemented one may result in assets going to improper parties, an undesired executor administrating an estate, irresponsible or unknown guardians for minor children, or undue legal fees and court costs.

Guardianship Designations for Minor Children

A critical concern for most people with young children is, who is going to take care of my children if I’m not here? Ensuring that financially stable friends or family willing to raise children exist affords piece of mind to parents in the event of sudden or unexpected death. Also, proactively addressing guardianship lets parents pick like-minded guardians in regards to personal, lifestyle, or religious views so surviving children are still, at least partially, raised in the manner they desire.

The easiest way to designate a guardian is to name that person or persons in the last will and testament. Then upon death, if the children are not yet 18, a probate court in most situations will appoint the named individuals as guardians according to the specified instructions. A simple will guardian designation, however, may not be convenient or appropriate in certain situations. Family compositions often change, such as in divorce or estrangement, or previously nominated guardians pass away thus negating the express wishes within a will. As such, amending or redrafting a will every time a different guardian is preferable can be time consuming and expensive.

Another way, however, exists to appoint a guardian outside of a will. An independent writing, other than a durable power of attorney, signed, witnessed, notarized, and filed with the appropriate probate court, specifying an appropriate guardian, is sufficient to convey such responsibilities. This method is relatively inexpensive and affords more flexibility to concerned parents. This independent writing method is not meant to affect any other issue or provision within a last will and testament other than appointment of guardians in the event of death. Note, an attorney will be able to resolve and watch for any potential issues regarding contradictory guardianship designations in separate estate planning documents.

Unfortunately, not everyone is blessed with a stable home life or responsible extended family. As such, proper guardian designation documentation is important and alleviates stress for parents, especially within the context of debilitating disease or deteriorating health. Further, appropriate designation avoids the involvement of child services and the courts in determining custody, eliminates the prospect of child trauma and stress upon children and concerned family during transition, and ensures surviving children have no opportunity to become wards of the state.

Letter of Intent

The aforementioned documents taken together serve to mostly illustrate and communicate a decedent’s final wishes. Everything, however, is subject to interpretation. Take the phone game most people played as children for example. A message begins at one end of a chain and, through repetitive communication and subtle shifts in language and understanding, comes out at the end completely different than how it started. A letter of intent fills in any gaps in understanding and prevents manipulation, subtle or overt, of estate instructions.

A letter of intent is a simple document that provides comprehensive instructions for what the decedent views is the most critical information and desired outcomes of an estate plan. The letter, however, is an informal document that is not legally binding upon a probate court. That being said, courts generally rely on them during probate proceedings because there is no greater authority than a decedent’s own words. After all, the entire point of probate is to distribute estate assets as close to a decedent’s intent as possible after the fact. Common instructions within a letter of intent include: guardian designations for minor children, if not detailed in a last will and testament, specific methods for bequests, the location of assets, funeral details, and the locations of estranged family members or friends chosen as beneficiaries. A decedent’s letter of intent in an additional effort to eliminate any confusion or room for interpretation within an estate plan.

Further, a letter of intent may serve as an alternative to adding on to an existing will independent of a codicil. Again, the letter itself is not legally binding like a codicil would be but it is relatively inexpensive, quick, and may serve as a viable substitute in a crunch. In Ohio, codicils are governed by strict legal conventions while letters of intent are not. As such, letters may be the document of last resort in situations of impending mortality or incapacity. As most probate judges agree, something is better than nothing. Note, however, a letter of intent is never a substitute for a will. Always consult with an attorney regarding how to best utilize a letter of intent in conjunction with other estate planning documents.

Your last will and testament, guardianship designations, and letter of intent are all critical estate planning documents, however, taken together they only offer partial protection and primarily focus on providing instructions after death. In the next part of the series the estate documents of the living will, HIPPA authorization, and healthcare and durable powers of attorney, which concentrate on providing instructions during life, are explored. Taken together, all the documents explored during this series can provide comprehensive protection for the most critical issues of both life and death.

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.

Estate Planning Lawyer - Daniel A Baron

Ohio’s Right to Disposition – Who Has Final Say?

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Cleveland, Ohio, Estate Planning lawyer, Daniel A. Baron, of Cleveland, Ohio, offers the following information on the issue of your Rights to Disposition after you pass.

Imagine if you will, your Uncle Harry has passed away and although he had specific wishes on what to do with his remains, there are others in a packed courtroom (immediate family members, blended family members, extended family members, friends, and lawyers) all thinking that they know what Uncle Harry’s final wishes were.

Although we always seem to hear about this situation coming out of Hollywood or New York City, you don’t have to be a celebrity to have family, friends, and lawyers be involved with what to do with your remains. Not only can this cause undue stress between family members and friends, but this can also produce large legal fees from opposing attorneys.  Ohio has a law which went into effect October 12, 2006 to prevent legal battles such as these from occurring.

Should you have questions like these, they are better answered by a qualified Estate Planning Lawyer.

  • What criteria do the courts use in deciding whether someone should be given authority to make the funeral decisions?
  • What precautionary measures are in place if the “designated person” in charge of making such decisions is not qualified or capable of making this type of decision any longer?
  • What ae some issues pertaining to funerals that arise that tend to lead to legal battles?
  • How does Ohio address these potential issues?
  • What occurs when there has been no person designated to make these decisions?
  • Is there a provision that allows someone to name a group of people rather than an individual having the right to dispose of the remains?

For answers to these and any other estate planning questions it is prudent to contact an experienced Estate Planning Lawyer. Contact Daniel A. Baron of Baron Law today at 216-573-3723 to arrange a meeting.

Helping You and Your Loved Ones Plan for the Future

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What Is A Credit Shelter Trust?

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Cleveland, Ohio estate planning lawyer, Daniel A. Baron, of Cleveland, Ohio, offers the following information on what a Credit Shelter Trust is and should it be part of your comprehensive estate planning.

If you are married and an investor, for example, consider establishing a Credit Shelter Trust. This can also be referred to as an A-B Trust and is an Irrevocable Trust.

The benefits of a Credit Shelter Trust is, that it allows the assets of the trust (up to a predetermined amount, i.e. $500,000) to transfer to the beneficiaries specified within the trust, typically your children, without any estate taxes being assessed.    Also, your spouse continues to have all rights to the assets of the trust and any income generated until the spouse passes away.

If you are a blended family, a Credit Shelter Trust might be the right tool for you as part of your comprehensive estate planning. If at the time of death of the first spouse the assets of the deceased spouse to immediately into the Credit Shelter Trust.  If the assets transferred are larger than the predetermined amount (we used $500,000 as the example), the excess assets go into a trust which qualifies for the Marital Deduction.  Since the Credit Shelter Trust is irrevocable, it has great estate tax liability advantages as well as making certain your assets are passed along to your beneficiaries, typically your surviving spouse and your children.  Establishing a Credit Shelter Trust insures that the worry of the step-parent now getting all the assets, your assets will now be distributed to the beneficiaries as you intended them.

In the event your spouse is still living and would need to dip into the trust’s assets that were set aside for your children, it would be up to your Trustee to assess the necessity of the transfer of funds. The step-parent would not have carte blanche to the funds.

For answers to any questions you may have on a Credit Shelter Trust and making it a part of or your Comprehensive Estate Planning, contact Daniel A. Baron of Baron Law today at 216-573-3723. Let’s work together to see what the best Trust is for your situation.

Helping You and Your Loved Ones Plan for the Future

 

Veteran Benefits

Long Term Care – What Is Available To Veterans

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Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on Long Term Care assistance for those who have served in our military and including this as part of your Estate Planning:

Cleveland Estate Planning Attorney

For those of you who have served in any of our armed forces, Thank You! Because of your bravery and sacrifice, we still enjoy the many freedoms we have in this country and you make us all proud to be Americans.

Should you, as a veteran require Long Term Care and you have a service related disability, the Department of Veterans Affairs pays for your Long Term Care and for certain other eligible veterans, you may also be entitled to additional health programs as well:

  • At home care for aging veterans with Long Term needs
  • Nursing home care

In order for veterans to stay in their homes and be more comfortable there are other programs as well.

A program that was developed in 2009 which provides veterans with a Flexible Budget in which to purchase services is a Veteran Directed Home and Community Based Services Program or     VD-HCBS as it is also known by. These are services available through the Aging Network in conjunction with the Veterans Affairs

Homebound Aid and Attendence – a cash allowance is provided to veterans with disabilities and their surviving spouses to purchase community based long-term services such as homemaker services and personal care assistance as well as to purchase a home. Eligible Veterans receive this as a supplement to pension benefits.

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For more information on reviewing your goals for Long Term Care, what is available for our Veteran’s and incorporating this into your Estate Planning, contact Daniel A. Baron of Baron Law at 216-573-3799.

Why Every Parent Should Establish A Guardianship Within Their Estate Plan

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Cleveland, Ohio estate planning lawyer, Daniel A. Baron, offers information on why every parent should establish a guardianship for their minor children within their estate plan:

 

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When is a guardianship necessary?

It is customary for the parents of minor children to make any and all legal decisions that are necessary to keep their children safe. There may come a time however, when the minor children need a guardianship established.

Some of the reasons in which a guardianship needs to be established are but not limited to:

  • The parent or parents are deceased
  • A minor inherits assets and the parent or parents are not qualified to make legal decisions
  • The parent or parents are not or cannot take care of the minor child any longer due to illness
  • The parent or parents cannot take care of the minor child any longer due to incarceration

What is role and responsibilities of the guardian?

  • Has the right to deny certain persons to come in contact with minor child or restrict the interaction with certain persons
  • Become the minors fiduciary by keeping inventory and control of all assets
  • Investing minors child’s assets
  • Pay the minor child’s bills
  • File income taxes annually
  • Decide where the minor child shall live

In some cases if you are a guardian you may need to get permission from the courts to carry out these duties.

In addition to overseeing the over-all wellbeing of the minor child and the estate, the guardian also has the following duties:

  • If necessary, bring a lawsuit on behalf of the minor child
  • If public assistance benefits are required, apply for them
  • Apply for public housing where needed for the minor child
  • Provide a legal residence for the minor child so that the minor child attends school and receives a quality education
  • Receive and maintain any funds given to support and care of the minor child
  • Authorize any care such as medical or other care necessary to insure the wellbeing and support of the minor child

Essentially the guardian looks after the minor child just as the parent or parents would have.

For more information on setting up guardianships for your minor children or your minor or adult child with special needs, contact Daniel A. Baron of Baron Law today at 216-573-3723.

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The Importance of an Elder Law Attorney

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Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on the importance of having an Elder Law Attorney to help plan for your future: Elder law attorneys are sometimes considered “authorities” as, although they can handle a wide range of other legal issues, they primarily focus on the needs of older adults and also […]

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