Baron Law LLC, Cleveland, Ohio, offers information for you to reflect upon while you are setting out looking for an estate planning attorney to help protect as much of your assets as you can. For more comprehensive information contact Baron Law Cleveland to draft your comprehensive estate plan to endeavor to keep more of your assets […]
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
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
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.
Legal Guardianship is used when a person is unable to make or make sound decisions about themselves personally or their property. These same persons can likely be or already have been a victim of fraud or undue influence. Although a guardianship may limit a person’s rights considerably, establishing a guardianship should be used after other actions have failed or are no longer available.
In the event a legal guardianship may not be totally necessary there are some alternatives you may want to consider that will still protect your loved one:
- Establish a Trust
- Appoint a case/care manager
- Open a joint checking account
- Draw up a living will
- Have a durable Power of Attorney for property established
- Have a durable Power of Attorney for Health care established
Some rights of the elderly which may be affected once a guardianship is put into place:
- Medical treatment consent
- Making End of Life Decisions
- Enter into a contract
- Possess a driver’s license
- Selling Property
It is always best if the guardian consults with the individual to make any decisions that affect that person if they are still able to make sound rational decisions. However sometimes, the guardian must make the decisions themselves if your loved one is no longer able to participate. The guardian should always take into consideration the individuals wishes if they are known.
Let’s start the conversation about when is the best time to consider establishing legal guardianship for your loved one. 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.
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 enough to live a long life, that is wonderful; however it may not be as healthy as we anticipated. There may come a time where you will need assistance with one or more of Activities of Daily Life (or ADL’s). These activities include the following:
- Feeding yourself
- Caring for Incontinence
- Getting in and out of your bed or chair (aka transferring)
Another form of assistance which you may need as you age and/or become incapacitated is known as Instrumental Activities of Daily Living (IADL). These types of activities are not as unobtrusive as your Activities of Daily living, however they are things which you cannot live your life as you have been accustomed to and you will need to seek the help of others to assist you.
These activities are:
- Dealing with your financial matters
- Keeping medications current and taking them properly
- Shopping for meals and other household necessities
- Using communication devices
- Caring for your pets
- Responding to emergency alerts
Whether you need assistance with ADL’s or IADL’s these activities are considered unskilled Long Term Care needs and are not covered by Medicare. For this type of Long Term Care you may need to reach out to your family, friends, neighbors, or community organizations to enlist their help. If you are not fortunate enough to have someone volunteer to help you will these matters which are not covered by Medicare, these would have to be paid by you; so the time to start planning for this care is now before you become unable to take care of yourself or your loved one.
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.
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.
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.
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.
Annuity-Based Long-Term Care and the Pension Protection Act of 2006
Medicaid and long-term care are unquestionably a hot topic. Estate planning and Medicaid planning attorneys have long been waiting for an opportunity that would allow those wishing to enroll in Medicaid to shelter all or a portion of their savings – legally! Cleveland, Ohio estate planning attorney Dan Baron offers the following information on long-term care and how the Pension Protection Act of 2006 has created one of these sought after opportunities.
In 2006, the President signed into law The Pension Protection Act of 2006 (the “Act”). The act changed certain tax laws and allows for those owning annuity contracts to take advantage of certain tax savings. In sum, the Act allows the cash value of annuity contracts to be used to pay premiums on long-term care contracts. The payment of premiums in this way will reduce the cost basis of the annuity contract. In addition, the Act allow annuity contracts without long-term care riders to be exchanged for contracts with such a rider in a tax-free transfer under Section 1035 of the Internal Revenue Code of 1986, as amended (IRC).
Here’s an example of how the Act’s changes might benefit someone considering long-term care insurance. Let’s say that Kathy, age 70, lives in Cleveland. Her children live out of state but are concerned with a recent diagnosis of diabetes, along with a history of heart disease. Because of these illnesses, she was not a good candidate for traditional long-term care insurance. However, by taking advantage of an annuity based long-term care strategy that takes advantage of the Pension Protection Act, Kathy could likely be insured.
Look at the illustration below. Kathy can take her $140,000 fixed annuity with a cost basis of only $40,000 (i.e. the amount she actually deposited) and using the tax-free exchange from his existing fixed annuity to a new annuity that complied with the Act’s rules, Kathy’s $140,000 fixed annuity could continue to earn interest. However, if she needed long-term care to pay for home care, assisted living, or skilled care, she now had a long-term care pool of money equal to $420,000.
- Kathy retains her $140,000 in cash value plus an additional $280,000 for a total of $420,000 for long-term care.
- Her benefits may be used for home care, assisted living, and skilled care.
- She pays no annual premiums
- As her annuity grows, so does her LTC. (assuming she does not use her LTC benefits)
There are many annuity based long-term care packages available. It’s best to consult with an attorney or Medicaid specialist who can help you choose the right plan. For more information, or to speak with Cleveland estate planning and Medicaid planning attorney Dan Baron, contact our office at Baron Law LLC. Baron Law LLC is a Cleveland, Ohio law firm dedicated to helping those in need of elder care, estate planning, and Medicaid planning. Contact attorney Dan Baron today at 216-276-4282.
Baron Law LLC is a Cleveland, Ohio law firm advocating for individuals and small businesses.
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