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Estate Planning Attorney

I’m An Executor Of An Estate, How Do I Transfer Property To Heirs And Beneficiaries?

Baron Law, LLC answers questions for you on transferring property to heirs and beneficiaries while acting as an executor of an estate. It is wise to always hire/consult an experienced estate planning attorney to help you navigate through the questions you may have.

Estate fiduciaries are charged with many obligations and responsibilities during estate administration, the most visible of which is the transfer of real and personal property to designated parties and legitimate creditors. The transfer of property is what everyone thinks about when talking about probate, who gets what and when. Well, just like everything else regarding estate and probate law, there are rules at follow. As always, a local Cleveland, Ohio probate attorney is in the best position to inform you on applicable rules and considerations, a quick phone call can save you a lot of time, money, and headaches.

With regard to estate property, usually the Ohio executor or administrator, sometimes even a beneficiary, must ensure that the proper documentation has been completed in order to transfer the ownership of all property whose interest is passing due the passing of decedent. What documentation is exactly needed, however, depends largely on the type of property passing, the relevant ownership rights within such property, and also whether the property is countable as a probate or non-probate asset.

Real Property

For real property that was owned by the decedent and which passes through probate, the estate fiduciary must file an application for certificate of transfer of real property with the probate court. The required contents, as mandated by Ohio law, for this application are found under Ohio Revised Code § 2113.61(A)(2). Within five days of filing the application for certificate of transfer that is statutorily compliant, the probate court will issue a certificate of transfer to be recorded in the land records where the property is located. This certificate of transfer is the document that actually transfers title for the real property to the relevant beneficiaries denoted in a will.

The procedure for transferring real property from an estate to someone other than a designated beneficiary, for example if real property is sold by an executor, however, is not handled by a certificate of transfer. Real property might be sold during estate administration to resolve outstanding obligations or expenses of decedent, or if the decedent was under contract to selling certain property. In such circumstances, a fiduciary deed would be executed by the estate fiduciary in order to convey the property. When a fiduciary deed is used, the grantor is the fiduciary and is effectively “stepping in the shoes” of the decedent for purposes of the transfer.

Personal Property

The most common personal property an estate fiduciary will handle are bank and investment accounts, especially if the decedent was on Medicaid or other government assistance. Such programs usually have strict income and property thresholds which leaves elder decedents with much smaller estates usually only comprising of an exempted personal residence and small expense account.

Typically, an estate fiduciary will transfer all of the decedent’s bank and brokerage accounts to the name of the estate during the administration. As such, new accounts will be set up under the tax identification number of the estate. In order to transfer a bank or brokerage account from the decedent’s name to the estate, the estate fiduciary usually needs to provide the financial institution which is holding the funds in the name of the decedent with a copy of the death certificate and his letters of authority to act on behalf of the estate. Nowadays, however, most bank and financial institutions have particularized processes for the release of decedent assets to the estate, so it is highly probable a death certificate and letters will not be enough. Because everything is computerized and identity theft has become so prevalent, banks and investment houses want certain forms completed and additional confirmations of the legitimacy of the transfer. An experienced Cleveland probate attorney will know what documents to present and which forms are needed for which financial institution.

Once the accounts are transferred into the name of the estate, the estate fiduciary has more control over the accounts. Before closing the estate, the estate fiduciary can transfer the account assets to the appropriate beneficiaries or liquidate as needed to sustain the costs of estate administration or pay critical obligations. The transfer is usually accomplished by directing the appropriate financial institutions to distribute the assets in kind or cash as the case may be. Again, the paperwork that is required to do this specific and a guiding hand by an Ohio probate attorney will avoid costly mistakes.

Some property, however, passes by operation of law, usually via beneficiary designation. The most common types of property are:

Concurrently owned property with rights of survivorship -This type of concurrently owned property will pass automatically to the surviving owner without regard to the terms of decedent’s will or Ohio intestacy statues, if applicable.

Life Insurance Policies – The terms of a life insurance contract usually allow the policy owner to direct by beneficiary designation where the proceeds of the policy go upon the insured’s death. As such, the proceeds pass automatically without the involvement of a probate court.

Retirement Accounts – Various employee or individual retirement accounts allow the designation of beneficiaries upon death of the owner. Same as with life insurance, cash in these accounts pass automatically without the involvement of a probate court.

Property held under Revocable Trust – Any property held under this type of trust at the time of decedent’s death will usually pass according to the terms of the trust agreement rather than be part of the decedent’s probate estate.

The acquisition, management, and distribution of estate assets is one of the most time-consuming and emotionally draining duties of an estate fiduciary. Aggressive estate claimants, pushy heirs and beneficiaries, and stubborn financial institutions make getting things where they need to go much more difficult than it otherwise should be. An experienced Ohio attorney can act as a buffer between you and those parties who would otherwise making administrating an estate much more difficult.

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 LLC Estate Planning Attorney

529 Plan For Your Grandchildren

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 for your heirs and not hand them over to the government by way of taxes.

In order to become Medicaid eligible, generally, one must have $2,000 or less in assets and earn only $2,205 or less per month in income. There are, however, multiple exceptions which carve out excludable assets, such as the child caregiver exception and the community spouse resource allowance. With the recent upswing in U.S. financial markets, many individuals are asking their estate planners and elder law attorneys ways to save or invest their money but not run afoul of eligibility requirements for government assistance programs such as Social Security and Medicaid. Increasing in popularly and meeting this increased need for saving and investment, 529 and 529A plans are widely being used by Ohio estate planning attorneys to great benefit and profitability.

What is a 529 Plan?

A 529 Plan is comparable to a health saving account. Money is put in and receives tax-benefits if used for educational purposes. All of the contributions made to the account grow tax-free and withdrawals are free from federal and state tax if used for qualified higher education expenses. Significantly, contributions to 529 Plans are not tax deductible. 529 Plans allow money to accrue tax free for the benefit of a designated third-party beneficiary while still retaining control of the assets by the owner prior to distribution provided such funds are spent on education.

529 Plans are a countable Medicaid asset because the owner can take their money back out at any time. As such, an individual owning a 529 Plan will face eligibility problems for government assistance programs if the money within a 529 Plan isn’t spent before applying for such assistance. The critical question is who owns the account. If owner reserves right to revoke or take the money within a 529 Plan, Medicaid will require the money to be spent on healthcare, spenddown, before eligibility for Medicaid services. Further, improper distributions, i.e. spending the money in the 529 account for medical bills instead of college, will trigger deferred taxes, plus penalties of 10 percent.

One solution to a mandatory 529 account spenddown is to legally shift the account to a family member of the beneficiary, such as a grandchild’s parents. However, though this effectively transfers control of the money to a third party thus facially making it a noncountable asset, such a transaction is still considered a transfer of assets that triggers a Medicaid penalty period if it occurs within the 5-year lookback window.

At this point, 529 Plans are not a recognized federal exception and no Ohio regulations are on the books exempting 529 Plans as a countable Medicaid asset. As such, estate and Medicaid planners must be aware that even though 529 Plans are attractive vehicles for saving, 529 Plan use may have significant consequences for seniors and individuals in need of government assistance programs such as Medicaid, Medicare, and Social Security. Contract a local Cleveland estate planning attorney to find out which saving accounts are preferable for your situation.

What is a 529 A plan?

Often referred to as a STABLE or ABLE account, 529A plans are accounts used as moderate investment vehicles to generate money to pay for approved expenses for the disabled. STABLE accounts are exempted from Medicaid and are not a countable resource. As such, having a STABLE account does not affect Medicaid eligibility. Further, the first $100,000 in a STABLE account is exempt from the Social Security Income limit.

Additionally, taxpayers can deduct contributions up to $​4,000 from their Ohio taxable income per STABLE account, per year, with unlimited carryforward of contributions over the yearly amount. This means that if contributions exceed $4,000 to a STABLE account in a year, the remainder of your contributions are carried forward to subsequent years until your entire contribution has been fully deducted. In this way, the government incentivizes maximum STABLE contributions which, in turn, reduces the financial burden on government assistance programs. Furthermore, a beneficiary’s individual contributions may also be eligible for the federal Saver’s Credit. An Ohio estate planning attorney can fill you in on the details, use, and eligibility requirements of the federal Saver’s Credit.

STABLE account earnings are not subject to federal income tax provided they are spent on qualified disability expenses. Acceptable. i.e. qualified, expenses are quite more expansive than with 529 Plans, an expense is qualified if 1) the expense was incurred at a time when an individual was suffering from an eligible disability, or 2) the expense relates to the disability, or 3) the expense assists in the maintenance or improvement of health, independence, or quality of life for a disabled individual.

Qualified expenses are not just medical expenses, but also include education, vocational, and living expenditures. Some examples include:

Tuition, books, and educational supplies and materials

Rent, mortgage, property taxes, and utilities

Transportation, qualified vehicles, and moving expenses

Vocational training

Health insurance premiums, medical equipment, treatment, and personnel

Legal fees, financial management services, and funeral expenses

If STABLE funds are used for non-qualified purposes, the owner will have to pay income taxes on the distributions, plus an additional 10% penalty. Further, the non-qualified funds can be counted as an asset/income for eligibility for government assistance programs such as Medicaid and Social Security. If you’re thinking about taking significant distributions from STABLE plans, always consult your estate planning attorney. The last thing you want is to get a disabled family member kicked off government assistance and then have to go through the arduous process of reapplying.

There are five investment options to choose from for a STABLE account, however, a financial adviser is in the best position to pick the best option for a client. A STABLE account used in conjunction with a special needs trust is an effective and powerful investment tool for those with disabled children or family members. Further, federal regulations specifically provide for tax-free rollovers from 529 college savings plans to STABLE accounts. Most people chose to rollover because either college expenditures are no longer needed or a priority in light of a recent and significant health change for a loved one.

529 college saving accounts and STABLE plans can become an indispensable saving and investment vehicle in one’s estate plan. An experienced and knowledgeable estate planning attorney is in the best position to advise you of the pro’s and con’s of each. Maintaining eligibility for government assistance while maximum personal retention of money and assets is perhaps the most common concern for clients of elder law attorneys. Both of the above mentioned tools, in the right hands, can financially provide for necessary healthcare and save or earn a lot of money for family members.

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 Ohio

My Trustee Isn’t Very Good At Their Job, Can I Get Rid Of Them?

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 for your heirs and not hand them over to the government by way of taxes.

Trusts are common estate planning tool. They are used to plan for retirement, provide for needed elder case, ensure Medicaid and other government aid eligibility, and provide for special needs children. A critical part of any trust is its trustee. The trustee is the primary agent responsible for managing trust assets and money and ensuring that the instructions and intent of the settlor are followed. At the end of day, if everything goes as planned, a trust will continue to exist and operate long after its settlor has passed. As such, the trustee is often solely responsible for the health of the trust and the welfare of trust beneficiaries.

With great power, comes great responsibility. Such is the case with trustees. In the same vein, however, most crime comes from opportunity. If there is nothing to steal, there is no chance of theft. The opposite also holds true. If you were left in an empty room with $300,000 dollars and no one was watching, how honest would you be? How honest could the ordinary man be? As such, tragically, too many trustees are found out too late to be lazy or untrustworthy and they must be removed and replaced. As with most things regarding trusts, Ohio law has set down rules and procedures to follow if you want to replace a trustee. Naturally, as with any legal question, always consult with an experienced Ohio estate planning attorney before you do anything.

Removal of a Trustee

Removal of a trustee requires serious consideration and appreciation for its consequences. Not only is it nuanced process requiring the learned help of an experienced Cleveland estate attorney, but it can also run counter to the express wishes and intent of the trust settlor. If the settlor is alive, and the trust revocable, replacing a trustee isn’t too big of a deal. But if the settlor is dead, and the trust irrevocable, now decisions have to be made that may subtract from the settlor’s goals.

A first trustee was an individual who the settlor had the utmost faith to carry out their wishes and guard their property. To go and replace them with another will affect how trust property is managed, how and when trust property is distributed, how much the trustee will demand as compensation, and the relationship between the trustee and beneficiaries. Since the power to replace a trustee shouldn’t be taken lightly, Ohio law placed rules and procedures on how and when it can be undertaken.

To start, the power to remove a trustee is primarily codified in O.R.C. § 5807.06(A). Wherein a “settlor, a cotrustee, or a beneficiary may request the court to remove a trustee, or the court may remove a trustee on its own initiative.” This by itself doesn’t say much, but evidently pretty much anyone with a legitimate interest in the trust may act to replace a trustee. The ability to do something, however, should always be paired with a valid reason why. This is where experienced Ohio estate planning counsel comes in handy. An attorney is in the best position when a trustee is just being difficult rather than derelict in their duties.

Why Remove a Trustee

Just because you can do something, doesn’t mean you should. Generally, replacing a trustee should only occur in a handful of circumstances, most of which are codified in Ohio law. Per

O.R.C. § 5807.06(B), a court may remove a trustee for any of the following reasons:

The trustee has committed a serious breach of trust;

Lack of cooperation among cotrustees substantially impairs the administration of the trust;

Because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries.

All these reasons go to a trustee’s inability to carry out their duties effectively or downright committing crimes as a trustee. A surly or unpleasant trustee is not grounds for removal, regardless of how much you dislike them. Only in extreme circumstances of incompetence, dereliction, or illegality should an action for trustee removal be undertaken. Your estate planning attorney is in the best position to judge when and if this threshold has been reached.

Importance of Successor Trustees

So, you’ve successfully removed an unsuitable trustee, now what? Naturally, a new trustee must be appointed and, of course, Ohio law provides for this possibility. Per O.R.C. § 5807.04 (C), if there is a vacancy in the trustee position, new trustee is selected using the following order of priority:

(1) By a person designated in the terms of the trust to act as successor trustee;

(2) By a person appointed by someone designated in the terms of the trust to appoint a successor trustee;

(3) By a person appointed by unanimous agreement of the qualified beneficiaries;

(4) By a person appointed by the court.

This is why selecting appropriate successor trustees, or drafting adequate methods to select them, are so important, though it is often seen as a throwaway detail when drafting a trust. At the very end of this list, a probate court has the authority to appoint a new trustee if no other methods exist. This is not an appetizing prospect for most settlors. The last thing settlors want is a court taking control out of their hands and appointing someone they don’t want or don’t know. The whole point of going through the long process of trust creation is a guarantee control of money and assets in specific and delineated ways. To have everything go right out the window because of improper successor trustee appointments is foolish. As such, proper thought and planning must go into your trustee and successor trustee appointments.

Most people don’t expect their first, or even second choices, for trustee to die, refuse appointment, or just not be very good at the job. An experienced Ohio estate planning attorney can help with the vetting process and also provide much needed instruction and guidance to selected trustees to make sure they understand the gravity of the position and possess the knowledge to do the job correctly and efficiently.

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.

Dan Baron Baron Law

Exceptions and Bars to Inheritance

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 for your heirs and not hand them over to the government by way of taxes.

When someone dies intestate (without a will), there are several exceptions to the rules of descent and estate distribution which act to bar a person from receiving what would have been such person’s intestate share of the decedent’s estate. These rules and exceptions highlight the importance of having a comprehensive estate plan and, in certain circumstances, are of paramount importance to heirs and beneficiaries. Rules are only written when they are needed, and the context surrounding these rules and exceptions illustrate some of the more extreme problems that an estate administration may potentially face. As always, an experienced Ohio estate planning attorney can fill you in on all the details and make a plan that will deal with any issues proactively.

Slayer Statute

The most commonly known exception is the slayer statute which is codified under Ohio Revised Code § 2105.19. This statute deals with the crimes of aggravated murder, murder, voluntary manslaughter, and/or complicity in the violation of any of the above crimes. If one has pled guilty to, has been convicted of, or has been found not guilty by reason of mental defect of, any one of the above crimes, such person is barred from receiving any portion of his or her victim’s estate. This statute bars inheritance regardless of whether it would have been through intestacy or as a bequest under a will. The same also applies to other property received as a result of death, like insurance proceeds. The slayer statute is an attempt by the Ohio legislature to write into law the cliché that crime doesn’t pay.

Illegitimate Children

Under common law, children born out of wedlock were not entitled to inherit from their mother or father. O.R.C. § 2105.17 states, however, that children born out of wedlock shall be capable of inheriting or transmitting inheritance from and to their mother and from and to those from whom she may inherit, or to whom she may transmit inheritance, as if born in lawful wedlock.

Ohio’s intestacy statute does not specifically address the ability of children born out of wedlock to inherit from their father. This issue, however, has been addressed in Ohio case law. Such case law has established multiple ways in which a child born out of wedlock could inherit from such a child’s father, some of the ways include the child’s father: 1) marrying the child’s mother, 2) providing for the child in a will, 3) designating the child as an heir, or 4) adopting the child.

The enactment of the Ohio Parentage Act, codified via O.R.C. § 3111, provided an additional way for a parent-child relationship to be established by allowing a child to bring an action to determine parentage. There has been disagreement among Ohio courts as to whether such actions to determine parentage must be brought prior to the father’s death. Some courts have held that while O.R.C § 2105.06 “does not require a parentage action to be brought before the death of the father… a probate court does not have jurisdiction to hear a parentage action under O.R.C. Chapter 3111.” See Estate of Hicks, 629 N.E.2d 1086 for more information. This likely creates a necessity to bring any parentage action by any estranged child as soon as possible in order to prevent being automatically disinherited by virtue of a lack of probate court jurisdiction. Contact a local Cleveland estate attorney to make sure your inheritance rights are valid and, if not, the appropriate steps are undertaken to validate and protect them.

Children Conceived as a Result of Rape

Recently in 2015, the Ohio legislature recently passed law that prevents a person who commits rape or sexual battery, or any of such person’s relatives, from receiving an intestate share from a child, or child’s decedents, who was conceived as a result of the rape. Such is codified via O.R.C § 2105.062.

Children who are abandoned by parents

If a minor child has been “abandoned” by a parent, then the parent is prevented from receiving an intestate share of the deceased minor’s estate. O.R.C. 2105.10(B). A child is “abandoned” by a parent if the parent has failed, without justifiable cause, to communicate with the minor, care for the minor, and provide support as required by law for at least a year immediately prior to the minor’s death. O.R.C. 2105.10 (A)(1). While few minors die with significant assets, this statute may be significant in the event of a wrongful death of the minor in which a significant windfall due in insurance proceeds or litigation may be contemplated. This potential windfall is a major reason why estate planning, even for individuals relatively young, should not be overlooked. The last thing a grieving family wants to do, while also negotiating a legal settlement, is deal with internal family disputes over who has authority over the decedent child’s estate, and along with it, the authority to negotiate the settlement amount for legal claims. Contact a local estate attorney to prevent this from happening.

Issues relating to adoption

Once a child has been adopted and after the final order of adoption is issued, the adopted child’s relationship with the natural/birth family, except the natural parent in the case of a step-parent adoption, is legally terminated. This eliminates any rights such child had to inherit from the natural family under the laws of descent and distribution. Instead, the adopted child, if that child is adopted prior to age 18, is treated as a child of the adoptive parent for purposes of intestate succession law and entitled to all the rights and privileges inherent to being a natural child.

These rules and exceptions to inheritance only touch on the multitude of problems and issues that face families when planning an estate or administrating an estate after death. Death is something no one likes to think about and even less people plan for. Just a few hours, however, with an experienced Cleveland land estate planning attorney can save your family months of stress and thousands of dollars in legal fees and court costs.

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.

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

A Trustee Isn’t Paying Me, What Can I Do?

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 […]

Estate Planning Attorney - Baron Law

I Need Medicaid, How Can I Keep My Home?

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 for your heirs and not hand them over to the government by way of taxes.

Caring for elderly loved ones, yourself or others, is not cheap. Assisted living facilities, nursing homes, and hospice care can easily run thousands of dollars a month and, as such, most people cannot afford to pay for it out of pocket for very long. We’ve all heard the horror stories, people stuck in dilapidated or abusive care facilities or having to spend every last cent just for a bed in a proper facility. No one expects to spend the last years of their lives in such an appalling state, but tragically, it happens more often than you think. To combat this, many resort to relying on government assistance to pay for managed care. To qualify for that assistance, however, many people must “spend down” their assets or reduce their income in order to become eligible for government programs, namely Medicaid.

The thought of having to choose between either having a fire sale and/or willingly living in a crummy facility and/or becoming a burden on your family is hardly an attractive prospect. Everyone wants to pass as much of their money and assets on to friends and family and no one wants to become a burden. Medicaid is well aware of this and imposes a five-year “look back” period for eligibility to ensure that people don’t simply transfer their money and assets away to qualify for government benefits.

There are estate planning strategies available, however, that will allow major assets to stay within the family while still maintaining Medicaid eligibility. The Caregiver Child Exemption, also known as the Adult Child Caregiving Exemption, is perhaps the one of most popular Medicaid planning tools available to preserve assets while maintaining eligibility. An estate planning attorney is in the best position to advise you on the best course of action given your particular circumstances but becoming familiar with the landscape and legal language of Medicaid will help you make the best decisions when the time comes for action.

Why should I care/How does this benefit me?

We are all naturally self-interested, so the first question everyone asks is, how does the Medicaid Caregiver Child Exemption benefit me?

In a nutshell, this is an exemption to the five-year lookback for Medicaid eligibility that can allow you to stay in your home instead of a nursing home or assisted living facility and still receive Medicaid assistance. Regardless of how nice a managed care facility is, everyone is more comfortable in their own home. The Medicaid Caregiver Child Exemption increases the amount of time you can spend in your own home before the realities of your own health force to into a more intensive care facility.

How does the Medicaid Caregiver Child Exemption work?

To qualify for the Exemption, the caregiving child must live in the home with their parent(s) for at least two years prior to the parent becoming eligible for Medicaid benefits. Further, the caregiving child must provide a level of care that effectively prevents the parent for needing to stay in a nursing home or assisted care facility. This at-home care saves the Medicaid program money and frees up much needed bed space in Medicaid approved facilities, hence the reason Medicaid offers the Exemption in the first place.

To effectively understand how the Exemption operates, and exploit it to the fullest extent, one must understand its constituent parts. Note, all the following criteria must be satisfied in order for the Exemption to apply.

What’s a “Child” under the Exemption?

A child under the Exemption is limited only to a biological or legally adopted child. A niece, nephew, grandchild, cousin, aunt, uncle, or stepchild does not count. Medicaid constricts eligible transfers only to direct decedents in order to prevent abuse of the Exemption and because, more often than not, our children are the ones who are going to step up and provide the needed care for parents.

To prove a qualifying family relationship, usually a birth certificate or adoption certificate is used.

What’s a “Home” under the Exemption?

The only “homes” eligible for the Exemption are those of primary residence. No vacation homes, secondary residences, or rental properties. Further, the child caregiver and the parent must reside together for the entirety of the two years. Medicaid wants to ensure the home is actually being used to provide healthcare for the parent in lieu of a managed care facility. If an adult child and parent are living together for an extended period of time, its more likely the Exemption is being used for legitimate purposes rather than a cover for an improper transfer of property.

To prove a qualifying home, evidence such as utility bills, tax returns, of government ID’s for both the parent and child caregiver for at least two years prior to Medicaid eligibility are sufficient.

What’s “Care” under the Exemption?

A child simply living with a parent, cooking meals, doing laundry, picking up medication, is not enough. The amount and manner of care must be enough to establish to Medicaid that the labors of the child caregiver is the reason why the parent isn’t in a nursing home or assisted living facility. If such labor is the difference between the parent staying at home or taking up a bed in a professional facility, then the non-disqualifying transfer of the home to the child is justified.

Establishing the proper level of care is the hardest criteria to prove. This is usually established by having the primary care physician of the parent complete and sign a Medicaid form clearly documenting the care provided by the child. Legal documentation that the care of the child prevented institutionalization of the parent during the two-year lookback is required as well. Any additional documents from family, friends, and medical professionals demonstrating the labors of the child caregiver is beneficial as well.

How to Apply

You don’t file or apply to use the Exemption in the conventional sense. When applying for Medicaid, you also submit the documentation establishing the transfer of your home to your child qualifies for the Exemption. Obtaining the required documentation to prove the applicability of the Exemption is the hardest part. Further, because the burden of proof lies with the applicant, Medicaid will show no leniency for mistakes or omissions.

This is why Medicaid planning and retaining legal counsel is so critical. The Exemption criteria should be met as soon as practical, so the two-year look back can start running as soon as possible. Further, an attorney can ensure all the documentation and forms are properly filled out, executed, and mailed to the proper government agency. Last the thing you want is to find out you have months or years of additional Medicaid ineligibility because an additional penalty period was accrued due to improperly gifting your home to your child.

What if I mess up and the Exemption doesn’t apply?

If the transfer of the home was improper, Medicaid will deny that the Exemption apples, consider the house a qualifying asset, and a penalty period will accrue in proportion to the value of the house. This means on top of the two years that the child caregiver must live with a parent before Medicaid eligibility, a period of further ineligibility is added. This period is determined based on the dollar amount of value of the house divided by either the average monthly private patient rate or daily private patient rate of nursing home care in Ohio.

The home that you lived in for years, if not decades, is one of your most valuable assets, both financially and emotionally. Old age, however, means significant money is needed to live comfortably, even more so in the event of illness or disease. Wise use of the Medicaid Child Caregiver Exemption can cut off years of Medicaid ineligibility and enable comfortable and convenient caregiving for families with ailing parents. Use of the Exemption, however, is not guaranteed and proper steps must be taken. This is why an experienced estate planning attorney can mean the difference between living in your own house receiving much-needed government assistance or waiting years for help or being forced in live in second-rate managed care facilities.

Also, should an elderly individual already be receiving Medicaid benefits, the family should contact a local Cleveland estate planning attorney and find out if the Medicaid Child Caregiver Exemption is still available.

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.

Trust Administration Attorney

Common Reasons Why Family Trusts Are Important

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 for your heirs and not hand them over to the government by way of taxes.

Trusts are lauded as an almost indispensable component of estate planning. This largely stems from the ability to outright negate the tax burden upon an estate through the use of martial exemptions, the unified tax credit, and deductions. Nuanced trust use and understanding of the internal revenue code prevents an estate, of which a family has spent a lifetime of labor on, from being consumed by taxes, such as the generation-skipping tax, federal estate tax, and gift tax.

Apart from the overt tax benefits, trusts also afford grantors and beneficiaries a host of secondary benefits. From ensuring comfortable living during senior years and Medicaid eligibility to confirming trust asset longevity and legitimacy, a well drafted, implemented, and managed trust can provide decades of support and peace of mind for surviving friends and family. The following are four not widely-known benefits of using a trust. Nowadays trusts are a ubiquitous but misunderstood estate planning tool. As such, knowing all the ways trusts can work for you helps in deciding if you want to incorporate one into your estate plan.

Primacy of Trusts over UTMA Custodial Accounts (Conveyances to Minors)

Apart from financial aid and personal savings, a common way to help pay for college tuition and associated expenses is a UTMA custodial account. As with any large expense, a little foresight and planning can make a big difference. The Uniform Transfer to Minors Act, i.e. the UTMA, is a potentially advantageous vehicle for the creation of a college savings account.

In Ohio, children under 18 can’t receive direct inheritance. As such, UTMA accounts are available to control and protect assets for minors until they reach they reach the chosen age of termination, between 18 and 25. These accounts are privileged to non-taxed and partially taxed earnings amounts, up to a limited amount, and are simple to create. Though expedient to make, using trusts to house assets for college often is more preferable in particular circumstances.

For a UTMA account, at the age of termination, the beneficiary gets control of the assets. This may pose an untenable risk of frivolous spending or mismanagement. Further, the age of termination is statutorily prescribed, meaning if a grantor desires continued oversight or staggered distribution, such is unavailable. Trusts on the other hand are free to impose continued control and measured distribution thus ensuring asset longevity and more nuanced settlor control. Furthermore, UTMA accounts count as an asset for financial aid eligibility which could reduce available financial assistance or foreclose it entirely. Also, the preferential tax treatment of UTMA accounts are only really effective for smaller gifts. As such, for larger gifts, the tax benefits of using UTMA transfer is negated. Thus, in many circumstances and for many people trusts are preferable for minor conveyances. Contact a local estate planning attorney to find out if a UTMA account or personalized trust plan is right for you.

Professional Rules Mandating Due Diligence

Trust formation is a measured and complex process often undertaken with attorney guidance. As such, an attorney’s ethical obligations of due diligence and competent representation control during trust creation and management.

Because attorneys are ethically bound to do a good job, a secondary benefit of using a trust is the unsung legwork attorneys put in to support a trust and fulfill their duties. For example, confirming a complete chain of title or the existence of valid deeds and signatures. Often long-term or complex assets are rife with unrecognized errors or hibernating claims of ownership. A watchful and dutiful attorney will disarm any surprises before assets are housed within a trust, surprises which would otherwise go unnoticed in the absence of a trust and the supporting attorney. Again, hiring an experienced Cleveland estate planning attorney can save you and your beneficiaries a lot of time and stress down the line.

Deliberate Election of Trustee Experts

A critical component of trust formation is the selection of a trustee. The trustee is responsible for managing trust assets and making distribution per the grantor’s instructions. The importance of this position should not be understated.

Often, however, trust assets are investment accounts, land, or securities. Each asset type possesses its own laws and requisite knowledge to manage effectively. Since trusts are estate planning tools crafted over months, attorneys regularly counsel the appointment of trustees with expertise reflective to trust assets, not just a close family member with little understanding regarding the management of trust assets. Willingness of a grantor to use a trust, with the associated time and resource costs, means a grantor will go the extra mile to pick the best trustee for the job. The right person in the right place can make all the difference.

Privacy
It is a little-known fact that trusts also, by their very nature, protect the privacy of the grantor and the assets placed within the trust. When a person dies with a will, the will goes through probate. Because probate files are publicly accessible court documents, anyone can read the will. Thus bequests, beneficiaries, creditor claims, and any other personal information is obtainable by anyone, for any reason. Trusts, on the other hand, are confidential. Since trusts are private agreements, beneficiaries, trust assets, and the trust estate structure are protected from those not meant to know.

Any internet search about trusts will return volumes of results concerning all the multitudes of trusts out there. From self-needs trust, to tax-shelter trusts, to family trusts, trusts reflect the needs and goals of their creators. Trusts, however, are not a hot or common topic of conversation. As such, not many know, unless they sit down with their Ohio estate planning attorney, of all the ways trusts can mitigate, eliminate, or avoid personal or family problems. In an effort to inform people regarding trusts, and if they are something a particular person should look into, go to www.doineedatrust.com and take a 1-minute quiz. The only thing you’ve got to lose is 1-minute, but you could be saving yourself thousands over your lifetime.

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 Trust

Ohio Trusts – Can Out-Of-State Lawyers Draft Them?

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 […]

Trust Lawyer Baron Law Cleveland Ohio

How To Use An Ohio Legacy Trust To Protect Family Assets

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 for your heirs and not hand them over to the government by way of taxes.

If you have a trust more than eight years old, chances are you were not able to take advantage of an Ohio Legacy Trust. In March of 2013, Ohio became the fifteenth state to allow the use of domestic asset protections trusts, also known as Ohio Legacy Trusts. Legacy trusts are extremely useful in high-risk ventures or occupations such as doctors, entrepreneurs, real estate inventors, and venture capitalists. Legacy trusts give unprecedented control to trust makers and far reaching asset protection. Legacy trusts, however, are not the end all be all. Considering legacy trusts are still relatively new on the Ohio scene, no one can say for certain their permanent place in Ohio estate planning. Further, because the advantages with Ohio legacy trusts are so extreme, the legal hurdles and requirements are, correspondingly, stricter. As such, call your local Cleveland estate planning attorney and see if taking advantage of this relatively new estate planning vehicle is right for you and your goals.

I. What is an Ohio Legacy Trust?

Before 2013, in Ohio, the law was that you could not create a trust for yourself, fund it with your own money, name yourself as a beneficiary, and protect assets within the trust from creditors. Now, however, Ohio law allows a settlor to make an irrevocable trust for the purpose of protecting assets from creditors all the while naming themselves a discretionary beneficiary. Further, other beneficiaries, such as a spouse, children and charities, can also be named. If this sounds powerful to you, that’s because it is.

The main wrinkles with Ohio Legacy Trusts is that a third party, such as a bank or CPA, must be appointed trustee and valid creditors have a statutory opportunity to bring valid creditor claims before the asset protection kicks in. The Ohio Legacy Trust Act states that if 18 months have passed since forming the legacy trust, all future creditors, with some exceptions, that are not yet known will be foreclosed from getting trust assets via a lawsuit. Thus, an Ohio Legacy Trust is not an absolute protection against current creditors, but it does protect against almost all future creditors with respect to the assets placed in trust.

II. Why are Ohio Legacy Trusts used?

Aside from the previously mentioned asset protection, Ohio Legacy Trusts also give trust makers an extraordinary amount of control over trust assets and ability to effect trust management. Makers of Ohio Legacy Trusts can be both the creator and beneficiary and reserve for themselves numerous rights regarding the trust. Trust makers can reserve the following rights for themselves:

The right to receive income and principal from the trust in the trustee’s discretion. For example, the legacy trust could provide that all income is distributed to the beneficiary maker on a regular basis or that the beneficiary maker receives a fixed percentage of trust assets.

The right to withdraw up to 5% of the trust principal each year.

The power to veto a distribution from the trust.

Certain rights to control how trust property will pass to other beneficiaries after the trust maker’s death.

The right to remove and replace trustees and other trust advisors.

The right to occupy real estate and use tangible personal property held as part of the trust assets.

The right to distributions to pay taxes on income generated by the trust, or an interest in receiving such tax distributions in the discretion of the trustee.

The right to serve as investment advisor to the trustee.

III. What are the Requirements of an Ohio Legacy Trust?

In a nutshell, an Ohio legacy trust must have the following characteristics:

1) The trustee must reside in Ohio or be an Ohio entity authorized to do business in Ohio.

2) The trust must be irrevocable.

3) The settlor, i.e. trust maker, must draft and execute an affidavit of solvency, sometimes called an affidavit of disposition, swearing the following:

* The assets to be used to fund the trust are not from illegal activity,

* The settlor is the rightful owner of the assets,

* The settlor does not intend to file for bankruptcy,

* The settlor is not a party of any unidentified court or administrative proceedings,

* The settlor will not be rendered insolvent after the contemplated assets are used to fund the trust, and

* The settlor is not transferring assets to the trust with the intent to defraud creditors.

IV. What can an Ohio Legacy Trust not do?

Though the powers of Ohio Legacy Trusts are expansive, they are not without limitation. An Ohio Legacy Trust cannot be used with the intent to defraud creditors. Further, it is a hard rule in Ohio law that these trusts do not protect against child support and alimony support claims. Furthermore, a settlor cannot make themselves insolvent while funding the trust and the trust cannot give a settlor the power to revoke the trust. Also, being that Ohio Legacy Trusts are grantor trusts, the settlor is responsible for paying income tax on all money generated by the trust.

Ohio Legacy Trusts are a great new tool to utilize for the right estate planner, but their use is not without risk. Assets placed in trust are no longer in the settlor’s direct control and it is no guarantee that these trusts will be recognized in other states. The biggest drawback is that Ohio Legacy Trusts only protect against future creditors, not current ones. That said, Ohio Legacy Trusts are an option that should be explored by anyone looking to protect their assets and increase the longevity of such assets. Contact an experienced Cleveland estate planning attorney and find out more about these trusts and how they can work for you.

Helping You And Your Loved Ones Plan For The Future


About the author: Mike E. Benjamin, Esq.

Mike is an 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 Ohio

What Are Choice Of Law Provisions And Why Do They Matter?

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 […]