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Cleveland Estate Planning Attorney

What is a Trust Protector?

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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.

Estate Planning Attorney

What Recourse Do I Have if My Power of Attorney is Stealing From Me?

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Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers the following helpful answers to Powers of Attorney:

Can the Power of Attorney be used by the agent to take my money or property without my permission?

Unfortunately, you can run the risk that the agent you choose to give your Power of Attorney could abuse the power by spending your money or taking your money without your knowledge or worse without your permission. Because the agent can use the Power of Attorney to access your bank account and sell your property, it is prudent  that you not give your Power of Attorney to anyone you do not trust.  If you happen to have an unscrupulous agent, it can be very challenging to get back funds or property taken by the agent, because the agent usually has no money left to return as they have used it all for their benefit.  The person acting as your Power of Attorney has the power to sell your property, or mortgage it.  It cannot be stressed enough that you chose your Power of Attorney very wisely.

 

If I think someone is using my Power of Attorney to steal from me, what can I do?

If you are suspicious that your agent is abusing their powers, revoke the Power of Attorney immediately.

Next, without delay, notify all banks, brokerage firms, or other financial institutions in which you have money that you have revoked the Power of Attorney.

Finally, go to the probate court. You may either by yourself or through an attorney.  Demand that the agent you suspect of absconding with your funds file a detailed account showing how your money was spent. A filing fee will need to be paid by you and you may need to possibly pay the agent for the cost of preparing the accounting documentation. Next, the court will hold a hearing at which time you can challenge the any or all of the information given in the detailed accounting. Ultimately, if the court finds the agent took your money without your authorization, you can sue the agent and/or possibly press criminal charges.

 

Can I revoke my Power of Attorney?

The Power of Attorney cannot be used unless the agent has it or it, or at least a copy and either you or they have given to banks, financial institutions, or others so that they think you want the agent to act on your behalf. If you have not given the Power of Attorney to anyone, you can revoke it by destroying the document.

If the eventuality the Power of Attorney has been given to the agent, an institution, or has already been recorded, you should execute immediately a revocation of the Power of Attorney that is witnessed and acknowledged in the same manner as the first Power of Attorney. Then; just as you distributed the Power of Attorney initially, you will need to furnish a copy of the Revocation to the banks, brokerage firm, or any other financial institution, and anyone else that may have a copy of the original Power of Attorney form that they know the Power of Attorney is no longer valid.

A Power of Attorney is only one of the many parts to a comprehensive estate plan. For information regarding living wills, trusts, power of attorney, or a pour-over will, or further questions on Powers of Attorney, contact Daniel A. Baron of Baron Law today at 216-573-3723.

 

Estate Planning Lawyer

What’s the Difference Between a Living Will and Last Will and Testament?

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Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers the following helpful answers to your questions about the difference between a Living Will and a Last Will and Testament.
Confusing these terms happens quite frequently as there are those that think that these are one in the same, however, they are entirely two distinct legal documents which cover many different needs.

A Living Will, what is it and do I need one?

 

 

Should you become extremely ill or completely incapacitated and cannot convey their medical care wishes; having a living will in place, (which is a legal document AKA as an advance directive), gives instructions as to the medical care you wish to receive.

Some of the details of a Living Will would include

  • Do I want to be placed on a breathing tube
  • Do I want a feeding tube
  • Would I rather not be resuscitated (AKA DNR – Do Not Resuscitate)

Also, at this point it would be wise to consider having a Power of Attorney put in place in the event that you do become incapacitated so that there is someone making sure that your wishes are carried out as you have communicated in your Living Will. Naming a Power of Attorney can be done at the time of penning your will.

 

 Last Will and Testament, is it different than a Living Will?

Your last will and testament, also simply known as a will, is a legal document that stipulates the transferring of your estate to somebody else by sale or gift upon your demise. Should you pass away without a will, your assets then become “intestate”.  At this time state intestacy laws govern the distribution of your assets.

If you have minor children, you should unquestionably have a will. At the same time of the writing of your will, it is possible for you to name a guardian for your minor children.  You can also name the guardian to manage the minor’s financial affairs or another party to act on behalf of the children.

As you are drafting your will, it will be necessary for you to select an Executor of your estate. The Executor is one who carries out the will’s requests throughout the process of probate.

Living Will and Last Will – when do they take effect?

Now that you are aware of the differences between a Living Will and a Last Will, you may question as to when the two take effect.

Keeping in mind that the Living Will outlines your medical wishes should you become incapacitated or seriously ill and unable to convey your wishes, this comes into play while you are still alive but unable to voice your wishes.

To stipulate your wishes of how to distribute your estate upon your passing comes into play by using a Last Will and Testament .

So as you can see a Living Will and a Last Will and testament are two separate, but very important legal documents for everyone to have in place.

Living Will vs. Last Will?

If you are pondering the questions as to whether you need a last will or a living will. The answer to that question should be very easy; just about everyone should have both. Each of these important documents are ones that every person doing their Estate Planning should secure as these offer you the peace of mind that your wishes will be followed when you can’t make them known due to a serious illness and/or incapacitation or death.

Having a last will and testament, also makes the probate process go more smoothly, and with a living will, it can provide direction to your loved ones or Power of Attorney, in making challenging decisions during a stressful and difficult time.

So when is the best time for me to get a living will and a last will?

Unless you have a crystal ball which states otherwise, the future is uncertain. Securing both a living will and a last will and testament and recording your wishes is best done sooner than later.

Both a Living Will and a Last Will and Testament are only two of the many parts to a comprehensive estate plan. For information regarding living wills, trusts, power of attorney, or a pour-over will, or further questions on Powers of Attorney, contact Daniel A. Baron of Baron Law at 216-573-3723 to make an appointment.

Living Will

Do I need a Living Will?

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Cleveland, Ohio estate planning attorney, Daniel A. Baron, offers the following regarding living wills:

Before you can answer this question you must first understand what a Living will is and what purpose it serves.

A Living Will is one form of Advance Directive which clearly defines your wishes for medical care should the following occur:

A Living Will clearly states your health care intentions.  This document allows you to make decisions while still cognitive such as:

  • Whether or not you wish to be put on life support, even if for a very short time
  • Would you would like to receive pain medication of any kind
  • Is it you desire to have any nutrition available by means of a feeding tube

The Living Will document also allows you to list any further specific instructions for your care if you become fully incapacitated.

Another form to consider securing in conjunction with a Living Will is a Health Care Proxy which is a specific Power of Attorney. A Health Care Power of Attorney authorizes a specific person you have chosen to act on your behalf to make all medical decisions (or to make sure that your medical wishes in your Living Will that you have set forth are followed), in the eventuality that you are no longer able to make these decisions yourself.

It might be in your best interested to have both a Living Will and a Power of Attorney which will set forth comprehensive guidance when it comes to your medical care in the end stages of life.

Things to consider when completing these documents:

  • Who do I want and trust to make my health care decisions when I am no longer capable of making them on my own?
  • What kind of medical treatment DO I or DON’T I want?
  • How comfortable do I want to be when my life’s journey is coming to an end?
  • How do I want people to treat me?
  • What do I want my loved ones to know?

Having a Living Will is only one part to a comprehensive estate plan.  For information regarding living wills, trusts, power of attorney, or a pour-over will, contact Dan Baron of Baron Law to make an appointment at 216-573-3723.

cleveland, ohio attorney

Difference Between a Trustee and Executor Within a Testamentary Trust

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Cleveland, Ohio Estate Planning Dan A. Baron Explains the Difference Between an Executor and Trustee:

Estate planning can be complicated and sometimes difficult to bear when charged with the responsibility as executor or trustee of an estate. If you have minor children, then you probably have set up some form of testamentary trust coupled with your will and power of attorney. Within these estate planning documents, there are designated executors and trustees that have been carefully selected to administer your estate after you pass. It’s important to talk with your executor and trustee and let them know their responsibilities after your’re gone. Below is a quick summary of the difference between executor and trustee of a testamentary trust.

The Executor’s responsibility is to liquidate or otherwise gather all estate assets, pay any outstanding bills and then transfer assets from the name of the decedent to the beneficiaries named in the Will (most often the decedent’s children). They also make any necessary filings with the court and attend any court hearings. Most Executor’s elect to use an attorney to help them with this so the process runs smoothly. Once all assets are in the name of the beneficiary, the Executor’s job is done. The complexity of the estate will determine how long the Executor is needed.

In comparison, a Trustee receives the assets from the Executor and then, with court approval, invests the trust assets in savings account, investment accounts, or whatever they deem appropriate. Most importantly, the Trustee manages the funds and makes distributions to the trust beneficiary (usually children) when needed (i.e. to pay school tuition, living expenses, doctor bills, etc.). Most clients set a maturity age of 25. When the children reach the age of 25, the trustee distributes the balance of the trust funds and that particular child’s trust is terminated. The Trustee will be required every two years to make reports to the court as to the value of the trust. As you can imagine, the length of time the Trustee will be needed will depend upon the age of the children.

If you would like to learn more about the responsibilities and an executor and trustee, or have questions, contact our office at 216-276-4282. You will speak directly with an Cleveland, Ohio estate planning attorney who can help you set up a trust, will, power of attorney, medicaid planning, and more. If you would like to attend one of our FREE seminars, please visit this link.

cleveland, ohio attorney

How Do I Avoid Probate?

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Successful Probate Avoidance Strategies

If saving time, money, and court supervision is right for your family, then avoiding probate is right for your estate plan.  There is a common misconception that having a will avoids probate. This is completely false.  Having a will does NOT avoid probate.  There are however many simple ways to avoid probate and some strategies that even offer asset protection.   But regardless of what estate planning method you choose, avoiding probate will avoid costly fees for your children and time consuming court proceedings. Here are a few helpful methods to consider.

Joint Ownership

Joint ownership is the most common method of probate avoidance and does not require the help of an attorney or other professional.  Assets owned by more than one person result in the survivor taking ownership.  Joint ownership examples might include a joint bank account or marital home.   This is significantly beneficial when avoiding probate for a residence because the transfer of assets is immediate and does not require a court approved transfer.   If you have a joint bank account, most banks require a simple death certificate and identification to transfer the account to the remaining account holder.  In lieu of a trust, the downside of joint ownership is that it does not offer asset protection.  Creditors may still attach their interest in a residence or asset of a jointly held account.

Beneficiary Designations

If you ever received life insurance or engaged with a financial planner, you’ve probably filled out a beneficiary designation.  These are very common with retirement accounts (401(k), 403(b), IRA, etc), life insurance, annuities, and other assets.  Here you simply designate the names of those you wish to receive the assets after your death.  Beneficiary designations are a great way to avoid probate and keep your estate private.  The transfer of assets is swift and does not require court approval.  If you name your minor children as beneficiaries, it is recommended that you appoint a guardian because a minor cannot take control such an account.  Once again however, the downside to beneficiary designations is that these assets are not protected against divorce, creditors, or litigation.  For example, if your children inherit an IRA but then get divorced, the ex-spouse is will receive half of the retirement assets.  (See trusts below for asset protection)

Transfer-on-Death

A transfer on death affidavit works just like a beneficiary designation.  Here the “TOD” allows you to designate the person or entity to receive your assets upon your death.  Just like a beneficiary designation, the TOD avoids probate while transferring assets swiftly and without court approval.  This method saves time and cost for commonly titled assets like a home, automobile, boat, and more.

Payable on Death

Similar to Transfer on Death Accounts, POD’s also transfer assets seamlessly through naming a beneficiary. Here the difference is that POD’s usually refer to checking accounts, savings, and certificates of deposit while TOD’s refer to brokerage accounts, stocks, securities, and mutual funds. Both TOD’s and POD’s do not offer asset protection.

Trusts

The single best way to avoid probate while also providing asset protection is by creating a trust.  A properly drafted trust is completely private, avoids probate, provides asset protection, and is advantageous for tax purposes (for larger estates).  There are numerous trust planning strategies available for all different types of estates.  For example, some trusts may be changed or modified during your lifetime (called revocable living trusts) or may not be changed (called irrevocable living trusts).  Other trusts may pay taxes themselves while others allow the trust beneficiary to pay taxes.  Regardless of what trust strategy is used, a properly drafted trust will ensure that your children and/or beneficiaries receive asset protection, favorable tax considerations, and probate avoidance.

To learn more about probate avoidance or trust planning strategies, contact an attorney at Baron Law LLC at 216-573-3723 or dan@baronlawcleveland.com  Baron Law LLC is a Cleveland area law firm providing legal services in the areas of estate planning, probate, wills and trusts, Medicaid planning, and more.

Bypass Trusts

Ohio Bypass Trusts – Cleveland, Ohio Attorney

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Cleveland, Ohio Trust Attorney

Ohio Bypass Trusts

Bypass trusts, or “credit shelter” trusts, have historically been an important estate planning tool that shields probate assets against estate taxes.  Most often, a bypass trust is found in your spouse’s will.  Each spouse directs that if you are the first spouse to die, then your solely owned assets be used to fund the bypass trust with up to whatever personal estate tax exemption is at the time.  Since 2013, the estate tax exemption is $5.25 million.  After death, money is used to fund the trust.  The money can come from a variety of sources including, probate assets, assets in a revocable living trust, life insurance policies, and retirement accounts.  Note however, that some retirement accounts cannot avoid certain federal taxes.

For example, say Molly dies leaving her son $1 million in a 401K plan.  Molly directs the money to a trust.  The trustee is to pay the trust ‘income’ to the son annually, and distribute the principal to the son when he reaches age 35.  The 401k plan distributes a $million lump sum to the trustee a few days after Molly’s death.  Barring an unusual provision in the trust instrument or applicable state law, the entire $1 million plan distribution is considered the trust ‘corpus.’  On the federal income tax return for the trust’s first year, the trust must report $1 million in gross income.  The trustee invests the money that’s left after paying the income tax on the distribution, and pays the income from the investments each year to Molly’s son.

If properly structured, assets in a bypass trust will not be included in your surviving spouse’s estate.  Instead, the money will ‘bypass’ your spouse’s taxable estate at their death and pass tax free.  Any amount in excess of the current federal estate tax exemption would then be distributed outright to the surviving spouse or is used to fund a marital trust or qualified terminable interest property (QTIP) trust.

Although bypass trusts have been used for years, they have become somewhat unnecessary.  Since 2013, the new laws allow a surviving spouse take up to $5.25 million tax free.  This is because the new laws allow this amount under the federal estate tax exemption.   Thus, unless you have a fairly large amount of assets, a living will would do the trick and allow for $5.25 million to be passed on tax free.

For larger estates, bypass trusts can offer advantages.  For example, growth in the assets of a bypass trust are not excluded from the gross estate of the surviving spouse and may run up against the estate tax exemption amount in effect when the surviving spouse dies.  In addition, any lifetime gifts you make that are taxable will decrease your estate tax exemption amount – decreasing the amount that can be put into the trust at your death.

For more information on trusts, living wills, or other estate planning tools, call Cleveland, Ohio attorney Dan Baron at Baron Law.  Baron Law provides legal representation to business owners and individuals.  Call today for a free consultation at 216-573-3723.  You will speak directly with a Cleveland, Ohio attorney who can help you with your legal needs.