Posts

lawyer estate planning cleveland, ohio

Long Term Care – Paying for the Nursing Home

/in /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers the following information on the paying for Long Term Care and incorporating it into your Estate Planning:

Baron Law Estate Planning Attorney

There are misconceptions regarding Long Term Care and who is responsible for paying for any care. This information may be used for informational purposes only.  For more information, or to speak with an experienced Medicaid planning attorney, contact Dan Baron at Baron Law.

Medicare:

In Ohio, Medicare only pays for Long Term Care IF you require rehabilitative care or skilled services. Skilled services are:

    • If you are in a nursing home, the maximum number of days Medicare pays for is 100; however the average covered stay is much shorter at 22 days
    • If you are able to stay at your own home, Medicare pays for skilled home health care or other skilled in-home services but only for a short period of time
    • Medicare does not pay for any non-skilled assistance for your ADL’s (Activities of Daily Living) which tend to make up the majority of in home Long Term Care.
    • You are solely responsible for paying for Long Term Care services provided to you that would not be covered by any other public or private insurance programs. For additional information regarding Medicare, please visit https://www.medicare.gov/

 

Medicaid:

  • Pays for the largest portion of Long Term Care services, provided your income meets the states minimum eligibility requirements.
  • Medicaid will cover your costs depending on how much assistance you need with Activities of Daily Living.
  • There are numerous considerations when considering Medicaid and it’s important to talk with a Medicaid planning attorney.  To learn more about some considerations, visit this Medicaid Considerations Article.
  • There are other federal programs available for specific populations and circumstances that may pay for Long Term Care
    • Older Americans Act
    • Department of Veterans Affairs

Private Health Insurance

  • Employer sponsored or private health insurance, cover the same kinds of limited services as Medicare
  • If your carrier does cover Long Term Care, typically it will only be for skilled care but only short term

Other Private Payment Options can include

For more information on reviewing your goals for Long Term Care as part of your Estate Planning, contact Daniel A. Baron of Baron Law at 216-573-3723.

cleveland, ohio attorney

When Should You Start Planning For Long Term Care?

/in , /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on when you should start planning for Long Term Care and including this as part of your Estate Planning:

 

When should you start planning for Long Term Care? If you are under 50, the answer is – “there is no time like the present”.  Approximately 70% of today’s population will need some sort of Long Term Care sometime within their lifetime.

What you should know about planning for the future

When in later years and you are in need of skilled services or should you require rehabilitation services, Medicare pays for this type of long term care. Unfortunately, Medicare does not pay for any non-skilled assistance with your ADL’s (Activities of Daily Life) or IADL’s (Instrumental Activities of Daily Living) which tend to make up the majority of Long Term Care.

You should start thinking now about how you are going to pay for Long Term Care as it is much more expensive than you might think.

There are a number of ways you can use to pay for your long term care. Being 50 of under, this may be the best time in your life financially to start planning for long term care, rather than after you have had a serious illness or become disabled.

You may also consider securing an Advance Directive which informs your family and other loved ones how you would like your medical matters handles, should you become incapacitated and are no longer able to communicate your wishes of your medical care.

For more information on reviewing your goals for Long Term Care as part of your Estate Planning, contact Daniel A. Baron of Baron Law today at 216-573-3723.

AN AB Trust – What are the benefits for your estate?

/in , , /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on an AB Trust and the benefits realized from including this as part of your Tax and Estate Planning:

For Tax and Estate Planning purposes, as a married couple, maximize the use of your Federal Estate Tax Exemptions through the utilization of an AB Trust.

There are two vehicles available in which to set up an AB Trust

  • Living Will and Last Testament
  • Revocable Living Trust

The “A Trust” also referred to as the

  • Marital Trust
  • Marital Deduction Trust
  • QTip Trust

The “B Trust” is also known as the

  • Family Trust
  • Bypass Trust
  • Credit Shelter Trust

In 2011, the Federal Estate Tax Exemption   was made transferrable between married couples.  Should one pass away in 2011 or after, their entire Federal Estate Tax Exemption is not needed to avoid Estate Taxes.

If you are on your second, third, or additional marriage and have different beneficiaries, it is in your best interest to explore the benefits of the AB Trust.

The AB Trust can only function if you secure them while both spouses are alive. Don’t put off securing this beneficial part of your estate and tax planning as once you become a widow or widower, it is too late.

Below is an example of how the AB Trust works to your benefit:

For more information on setting up an AB Trust as part of your Estate and Tax Planning, contact Daniel A. Baron of Baron Law to maximize your Federal Estate Tax savings upon your passing. Contact us today at 216-573-3723.

Medicaid Planning

Applying for Medicaid? Here’s What You Need to Know About Activities of Daily Living vs. Instrumental Activities of Daily Living

/in , /by

Cleveland, Ohio estate planning and elder law attorney, Daniel A. Baron, offers the following information on the definition of ADL’s and IADL’s and how to plan on Long Term Care as part of your Estate and Medicaid Plan: As we are all well aware, there is only one alternative to aging. If you are fortunate […]

Read more
lawyer estate planning cleveland, ohio

The Definition and Role of an Executor of an Estate

/in , /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers the following information on the Definition and Role of an Executor of your Estate.

Last Will and Testament Picture

 

Being named and then carrying out the duties of an executor can be one of life’s most frightening tasks however; keep in mind that this is also an honor. Being named an Executor of someone’s estate shows that the person naming you has entrusted you with the great responsibility of making sure their last wishes are granted with respects to the settlement of their property and assets.  Fundamentally, an executor of any will is responsible for making sure that any and all  debts and creditors of the deceased are paid off, and that any remaining money and/or property of the estate is distributed according to the decedent’s wishes.

Bear in mind that the law does not require an executor to be a lawyer or for that matter a financial expert; however, it does require that every executor fulfill their duties with the utmost honesty and attentiveness. In other words, according to law, you have a “fiduciary duty,” that as the executor, you are going to act in good faith with regards to a person’s will.

As the executor, generally you are not entitled to proceeds from the sale of any property of the estate. The executor however, is entitled to a fee as compensation for administering the will. The fees could be mandated that it be reasonable depending on the size or involvedness of the will.

Executor Definition:

To Fulfill Specific Duties; there are many obligations that an executor of a will may have to realize, depending upon the involvedness of the will and the property to be distributed.

These duties normally include but are not limited to:

Finding the assets: The executor is responsible for finding all the decedent’s assets  and for keeping the assets safe until they can be appropriately dispersed to those named in the will and/or to creditors and debtors. This controlling of assets can include upon deciding which types of assets to sell as well as what kinds of assets to keep.

Winding up the deceased’s affairs:   This can cover a multitude of items to be dealt with

  • Canceling any/and all credit cards that may still be open
  • Notifying any bank or other financial institutions about the death of the individual.
  • Notifying brokerage or financial advisors overseeing investments
  • Contacting the Social Security Administration if the decedent was collecting Social Security Benefits
  • Contacting any and all life insurance carriers to claim death benefits to add to the assets of the estate
  • Cancelling home and auto insurance carriers to cancel policies once the estate has settled or property sold
  • Contacting utility companies if services are no longer needed

Locating and communicating the heirs: Locating and contacting those who have been named and who are supposed to inherit money and/or property can be a challenge at times.  If the will has not been updated, people may have moved so you the executor will need to be vigilant in finding all the heirs listed.  There are some cases the deceased has designated certain property/assets go directly to an individual or charity.  So it is imperative that the correct heir be found.

Deciding whether or not probating the last will and testament in court is necessary: Probating a will is the process of getting a court to approve the legitimacy of the will.

Verifying that the Will has been filed in the proper probate court:  This is commonly required by law even if the will does not need to be probated

Should I set up a Separate Bank Account for the Estate?

Setting up a bank account for the estate: Since it is wise not to co-mingle the Executors funds and the deceased party’s funds, the executor is typically required to keep the estate’s money separate from their own funds. Opening up a bank account in the name of the estate makes paying off creditors and the heirs so much easier and helps prove what went into the estate, came out of the estate until such time it has been completed.

Pay ongoing required payments:  Monies in the estate’s bank account are used for making mortgage, insurance and any additional ongoing payments that need to be paid during the management of the will until the estate is settled with all property being sold.

Do Heirs get paid before debtors and creditors:  First and foremost; all of the decedent’s debts and creditors need to be paid off before any heirs can inherit the remaining assets.  The executor of the will should notify all creditors of the death of the individual and see how they wish to proceed.

Paying final income taxes:  You know that there are two things certain in life – death and taxes.  One of the responsibilities the executor of a will has it that they are in charge of making certain that the decedent’s income taxes are paid for the last year they were alive.

Distributing deceased’s property: If listed in the will that certain property goes to certain heirs, the job of the Executor has it to make sure that it gets to the rightful heirs and recorded that it was given to the appropriate party.  If there is other property that is not named in the will, it should pass according to the laws of the State of Ohio.

If no will is in place, the party in charge is typically called the administrator and will be responsible for reviewing the state law to see who the estate’s property will pass to in “intestate succession.”

Having an Executor of your Estate is only one part to a comprehensive estate plan. For information regarding living wills, Last Will and Testaments, trusts, powers of attorney, or a pour-over will, contact Daniel A. Baron of Baron Law today at 216-573-3723.

Cleveland, Ohio estate planning attorney

Grantor vs Non-Grantor Trusts

/in , /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on the differences between and Grantor and a Non-Grantor Trusts and further considerations to as part of your Tax and Estate Plan:

Baron Law Cleveland

Understanding tax benefits and pitfalls of a trust and putting together a trust which is most beneficial for your personal situation is best left to an experienced trust attorney who can explain the differences in trusts and customize your Estate Plan.

Consequently, understand that the term used; Grantor Trust and Non-Grantor Trust are important.  These terms mean very different things but are both associated with tax implications.

The Grantor is the party who establishes the trust and maintains control while living and mentally capable.

Some examples of Grantor Trusts

  • Revocable Living Trust
  • Dynasty Trust
  • Grantor Retained Annuity Trust (GRAT)
  • Spousal Access Trusts
  • The majority of Irrevocable Trusts
  • Defective Grantor Trust (IDGT or DIGIT)

When setting up your trust as part of your Estate Planning, tax planning is an integral part of each and every plan and is as individual as you are.

Planning for Tax implications

How is the trust going to be taxed? Does the American Tax Relief Act of 2012 (ATRA) affect the taxes of your trust?  By setting up a Grantor Trust you can realize a number of tax advantages.  Some of these advantages are but not limited to:

  • Sell assets to the trust and not have to pay for the gains of the sale
  • Loan money to the trust – keeping in mind that the trust must pay the minimal IRS interest rate; however the income recognized from the interest is not taxable to you
  • The trusts income tax, paid by you (the Grantor), is not viewed as a gift to the trust

Plain and simple, the assets of the trust grows, which in turn benefits the beneficiaries without paying income tax. Essentially this is a tax free gift.

Non Grantor Trust

A Non-Grantor Trust is where the donor of the assets relinquishes all control within the trust. The donor of the trust funds is not a beneficiary or a trustee and has no input on how the funds are disbursed or controlled.  When the donor establishes a Non-Grantor Trust (aka irrevocable trust) they give up their rights to amend, revoke, or terminate the trust as this now becomes the functions of the trustee(s) either acting by themselves or with a Trust Protector.

Although the assets used to establish the trust were once owned by the donor, they are now owned by the trust. Any income being generated from the assets now is the sole responsibility of the trust.  As is with the Grantor Trust, any distribution to a beneficiary must now the proper IRS forms issued and provided to the recipient.

When a non-grantor trust is established it becomes a taxable entity and a Federal Employer Identification Number is issued. This also means that an income tax return needs to be filed on behalf of the trust each year.

Understanding tax benefits and pitfalls of a trust and putting together a trust which is most beneficial for your personal situation is best left to an attorney who can explain the differences in trusts and customize your Estate Plan. Contact Daniel A Baron of Baron Law Cleveland, Ohio at 1-216-573-3723.

Baron Law Estate Planning Attorney

Incorporating Long Term Care to Avoid Accidents and Falling

/in /by

Cleveland, Ohio estate planning and elder law attorney, Daniel A. Baron, offers the following information on Long Term Care and incorporating it into your Estate Planning:

Elder Care Attorney Cleveland Ohio

If you are over aged 65, a fall could leave you incapacitated or worse, it could be fatal. Having a Non-fatal fall could leave you unable to care for yourself for either a short period of time or a long period of time.  Should this happen, who is going to pay for your Long Term Care?

One in every three Americans falls each year. Falls for the elderly are the leading cause of non-fatal and fatal injuries for those aged 65 or older.

If you happen to fall you run the risk of:

  • Head Injuries
  • Broken Bones
  • Hip fractures
  • Significant loss of independence

If you should take a fall and you are over the age of 75 the chances of you being admitted to a skilled nursing facility are four times greater.

Even if you should fall and do not sustain a major injury, you become fearful of falling again and thus becoming less active. With this said, there are steps you can take to reduce your risk of falling.

Information Source – National Council on Aging

Six steps to Reduce Your Risk of Falling

In order to help your aging loved one, friend, or neighbor follow these steps to reduce their risk of falling.

Enlist their support in taking simple steps to stay safe. For example:

  • Ask your aging loved one, friend, or neighbor if they have a concern about falling.
  • Although many older adults recognize the risk of falling exists, they do not believe it will happen to them, or if they fall they will not be hurt – even if they have fallen in the past.
  • A good place to start is by sharing NCOA’s “Debunking The Myths of Older Adult Falls”. If they show a concern about falling, dizziness, or balance suggest they discuss it with their Health Care provider who can assess their risk and suggest programs or services that could help

Discuss current health conditions

  • Ask your aging loved one, friend, or neighbor if they are experiencing problems managing their own health
  • Ask whether or not they are having trouble remembering to take their medications, or are they experiencing any side effects
  • Ask if it is getting more difficult for them to do things they used to do easily
  • Ask if they are taking advantage of ALL the preventative benefits now offered under Medicare such as the Annual Wellness visit. Encourage them to speak openly with their health care provider about ALL their concerns

Ask about their last eye checkup

  • If your aging loved one, friend, or neighbor wears glasses or contact lenses, make sure that their prescription is current and they are using their glasses or contact lenses as advised by their eye doctor
  • Keep in mind that wearing tint changes glasses or contact lenses can be hazardous when going from bright sun into darkened buildings and homes. A simple strategy is to change glasses upon the entry into a building OR stop until the tint has changed
  • Bifocals can also be problematic on stairs, so it is VERY important to be extra cautious on the stairs. For those already struggling with low vision, consult with a low-vision specialist for ways to make the most of their eyesight.

If you are noticing your aging loved one, friend, or neighbor is holding onto the walls, furniture or someone else while walking or if they have difficulty arising from a chair:

  • These are signs that it might be time to see a physical therapist
  • A trained physical therapist can help your loved one improve their balance, strength, and gait through exercise
  • They may also suggest that your loved one use a cane or walker. The physical therapist will also offer guidance on how to use these aids.  Make sure you heed their advice
  • Poorly fit aids can actually increase your risk of falling, so make sure that all aids are fitted correctly

Talk about their medications

  • If your aging loved one, friend, or neighbor is having difficulties managing their own medications or they are experience side effects, encourage them to discuss their concerns with their doctor or pharmacist
  • Suggest they review their medications each time they get a new prescription
  • Your loved one may find it useful to use a chart of some sort to keep track of their medications and their scheduling. Adding a time medication dispenser that can be refilled every week or month by a family member, friend or neighbor can promote peace of mind and ensure that medication is being taken as prescribed
  • Be aware if your aging loved one, friend, or neighbor is taking non-prescription medication that may contain sleep aids – including painkillers with “PM” in their names. These can contribute to balance issues and dizziness.  If your aging loved one is having sleeping difficulties encourage them to speak with their health care professional for different alternatives

Do a walk-through safety assessment of their home

There are many simple and inexpensive ways to make a home safer. For Professional Assistance, contact an Occupational Therapist.  Some examples for making your loved ones home safer:

  • Lighting: Increase lighting throughout the house especially at the top and bottom of stairs.  Ensure that lighting is readily available when they are getting up in the middle of the night
  • Stairs:  Make sure there are two secure railings on both sides of the staircase
  • Bathrooms:  Install Grab bars in the tub/shower area and near the toilet.  Make sure that grabs bars are installed in places where your loved one will be able to use them as intended.  Consider installing an ADA toilet which has a higher seat then standard toilets.  Perhaps having a shower chair would help as well as installing a hand held shower.

For more information on reviewing your goals for Long Term Care as part of your Estate Planning, contact Daniel A. Baron of Baron Law at 216-573-3723.

Baron Law

The Marital Deduction – What are the benefits?

/in , , /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on The Marital Deduction as well as other Tax Planning Advice and what to make part of your Estate Planning.

What are the benefits?

The most important deduction a married couple has is the The Marital Deduction.  The amount of assets which can be passed upon death from one spouse to the other is unlimited and is also used to defer ALL estate taxes until the surviving spouse passes.  Current tax laws allow one spouse to give the other spouse assets where there is little to no tax imposed upon the transfer of these assets.  No matter what the value of the assets which are being transferred, whether it is $50,000 or $50,000,000.

What if there is a divorce?

If you happen to be divorced from your spouse, you can still pass assets to the ex-spouse after you pass with little or no tax being imposed if it is stated in the divorce decree.

My spouse is not a U.S. Citizen – Do the same tax laws apply?

The Marital Deduction is unlimited as long as both spouses are U.S. Citizens. So what happens when one of the spouses is not a US Citizen?

Should the first spouse to pass away be a U.S. Citizen and the surviving spouse a noncitizen of the U.S., unfortunately the unlimited marital deduction for Federal Estate Taxes is not available.

However, the taxes can be deferred by setting up a Qualified Domestic Trust (AKA QDOT), and having the assets pass through this specialized trust.

Should you own real property, consider adding this to the trust as the taxes will be deferred until the noncitizen spouse passes away.

For more information on The Marital Deduction and implementing other tax savings ideas as part of your Estate and Tax Planning, contact Daniel A. Baron of Baron Law to maximize tax savings upon your passing.  Contact us today at 216-573-3723.

Estate Planning Attorney

QDOT – What is it and should I have one?

/in , , /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on a Qualified Domestic Trust and the benefits realized from including this as part of your Tax and Estate Planning:

 

 

The specific goal of a Qualified Domestic Trust (or QDOT) is to defer Federal Estate Tax on assets which are transferred from a spouse who is a US Citizen upon their death to the other spouse who is not a citizen of the US. If your marriage consists of both a US Citizen and a non US Citizen and your assets are minimally several million which the non US Citizen spouse has the possibility of inheriting,  it would be wise for you to secure a Qualified Domestic Trust.

What are some of the tax issues for spouses who are not US Citizens?

In the absence of Qualified Domestic Trust the non-citizen spouse now has to pay Federal Estate Tax on any assets transferred from the US Citizen spouse into the non-citizen spouse’s name, just as any other party who inherits assets from any other person when they pass.

 

What happens when no Qualified Domestic Trust exists and the spouse who is the

US Citizen passes away first?

If the surviving spouse is a non-citizen of the US, then as stated previously, Federal Estate Taxes will need to be paid on any assets which transfer to the surviving spouse. The surviving spouse would not have the unlimited Marital Deduction as it is should both spouses be US Citizens.  Paying the Federal Estate Taxes is the government’s way of collecting taxes so that the non-citizen spouse does not take all the assets back to their native country and avoid paying the necessary taxes.

There are two avenues which could be taken to avoid paying any inheritance tax:

  • Become a US Citizen
  • Set up a Qualified Domestic Trust

There are a number of requirements however set forth for set up a Qualified Domestic Trust after the spouse who is a US Citizen passes away, but it can be done. If your family situation is such that one spouse is a US Citizen and the other is not and has no intention of becoming one, it would be most advantageous for you to contact an Estate Planning Attorney to set up a Qualified Domestic Trust while you are both still living and of sound mind.

For more information on setting up a Qualified Domestic Trust as part of your Estate and Tax Planning, contact Daniel A. Baron of Baron Law to maximize your Federal Estate Tax savings upon your passing at 216-573-3723.

Cleveland Estate Planning Attorney

What is a Trust Protector?

/in , /by

Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers information on a Trust Protector and their Role and benefits realized as part of your Comprehensive Estate Plan:

Who is a Trust Protector?

As it sounds, a Trust Protector is appointed to oversee the assets in the trust and to protect against the trustees so that they do not give into temptation and embezzle from the trust or squander the assets of the trust with unnecessary fees or legal issues.

Having a Trust Protector typically was only used with the upper echelons of society but some may say that if there is a trust, there should be a Trust Protector.   It is wise to appoint a Trust Protector especially in cases that the trust will be a long term trust such as:

  • Trust for your spouse so that they will live a certain lifestyle after you pass
  • Your children, grandchildren, or other heirs, that need to reach a goal in life prior to releasing the funds of the trust
  • Charitable goals – what is your legacy

Upon setting up a trust and should the trust have more than one trustee, there is a possibility of issues coming up which are believed to not be in the best interest of the trust. Having a Trust Protector can potentially quash any conflicts which may arise.  In addition, a Trust Protector can be very beneficial in other instances where conflict may arise.

Can I appoint anyone to be my Trust Protector?

You can appoint anyone you would like to protect your trust. Some ideas may be:

  • Someone who is close to your family
  • A Certified Public Accountant (CPA)
  • An attorney
  • Corporate Entity or Bank
  • Financial Planner CFP

What are the duties of a Trust Protector and Why would I need one?

Additional duties of a Trust Protector are, but not limited to:

  • If the trustee or trustees are performing in such a manner that is not advantageous to the beneficiaries of the trust OR are being unresponsive, the Trust Protector has the authority to remove the trustee and replace them if necessary.
  • Should any disputes or conflicts arise between the trustees, the Trust Protector’s Role is to resolve the disputes.
  • If there is a change of status with any of the beneficiaries, it would be the Trust Protector’s responsibility to update the trust accordingly.
  • Should there be any new beneficiaries which needed to be added, the Trust Protector would make the necessary changes to the Trust.
  • The Trust Protector also has VETO power of any financial / investment decisions which may not be in the best interest of the trust and it’s beneficiaries.
  • If the laws governing trusts change, the Trust Protector has the ability to amend the trust if the changes are advantageous to the trust.
  • The Trust Protector can manage the amount of money the trustees can spend by setting a dollar amount and/or requiring two signatures on a check before it can be released. The dollar amount will be predetermined upon the penning of the trust so that all the trustees and the Trust Protector are aware of this stipulation.
  • The Trust Protector has the ability to dissolve the trust for specific reasons such as;

 

  • There are no more funds in the trust as they have been released to the heirs as set forth in the trust and will

 

  • The goals of the heirs have been met and all the funds are released therefore leaving no assets in the trust

It is wise to put in writing what role you would like the Trust Protector to have handling your assets. To start a discussion  on your personalized comprehensive estate plan, including; living wills, trusts, power of attorney, or a pour-over will, or further questions on a Trust Protector, contact Daniel A. Baron of Baron Law.  Baron Law provides estate planning services for the greater Cleveland, Ohio area.  Contact us today at 216-573-3723.