Jarvis Law Office

What You Need to Know About Alternate Beneficiaries

Some would argue that the point of estate planning is to have a Plan B, or a plan for when your first plan doesn’t go as anticipated. Sometimes heirs and designated beneficiaries don’t live to benefit from an estate, or they do something that makes them no longer qualified to benefit. Thus, an alternate beneficiary would benefit, if named, to ensure nothing is left to chance.

 What’s an alternate beneficiary?

 An alternate beneficiary is a person who will benefit from an estate or part of an estate if the primary beneficiary won’t or can’t benefit. For example, a mother bequeaths a farm to her oldest son. However, the oldest son doesn’t want the farm and is too sick to farm even if he wanted to do so. He refuses to take the farm. Now, the farm goes back to the mother’s estate—unless, of course, she named an alternate beneficiary to take the farm in case the oldest son didn’t want it or died before she did. Say she named her best friend, a neighboring farmer, as an alternate beneficiary. Now, the farm will go directly to the friend, who wants the farm and is willing to take it, without it going back into probate.

 Why would I want an alternate beneficiary?

 Again, an alternate beneficiary is the Plan B, or even C, of estate giving. It ensures that a principal’s estate will remain in the hands of his or her chosen beneficiaries. In the prior scenario, without an alternate beneficiary, the farm would have gone back to the mother’s estate, and a probate judge would then decide who gets the farm based on the laws of succession. This may end up being a person whom mom would have never wanted to inherit her property.  Naming an alternate beneficiary ensures that mom has the final say of where her property goes, rather than leaving this decision to a court or a judge.

Create a “Plan B” to stay in control of your estate plan.   

If you want the peace of mind knowing that your estate will pass only to the beneficiaries of your choosing, talk to a qualified Ohio estate planning and elder law attorney about naming alternate beneficiaries. Our attorneys will help you work through establishing contingency plans thus avoiding the most common issues that arise when life throws curve balls into your initial plan.  If you’d like help getting started, contact our law firm at 877-653-3450 to schedule a complimentary initial consultation.

How NOT to Plan for Medicaid in Ohio

Medicaid planning is a daunting process due to the complexities surrounding Medicaid eligibility requirements. Strict asset and income limits must be maintained, and penalties resulting in loss of coverage or money owed to the state can occur if the planning is not done correctly. If you may receive Medicaid in the future, it’s best to consult with an experienced Ohio elder law attorney to make sure your strategies are sound.

It’s also important to keep in mind that Medicaid rules or planning strategies that worked a few years ago may no longer be acceptable and could cause you to lose benefits or incur penalties today. For example, prior to 2006, seniors planning on receiving Medicaid would often gift half of their assets to their children, while keeping the other half to pay for their care during a penalty period during which they are ineligible for Medicaid. This type of planning was called Half a Loaf, and it worked because the penalty periods began when the gift was made. However, when the rules changed in 2006, this strategy was no longer a viable option.  More importantly, even gifts made for reasons entirely unrelated to Medicaid Planning, can cause unanticipated penalties with Medicaid if they occurred within the “lookback” period.  The current lookback period is 5 years, but many elder law attorneys anticipate the lookback will be increased at some point.

The rules regarding your home, other real estate and farms have changed significantly over the past two years.  Previously, a single person could retain their home, and sometimes other real estate for a period of time.  The new rules force the home to be sold in a much shorter period of time.  And other real estate must be sold promptly.  The proceeds from the sale are then used to pay for care.

Annuities (large amounts of cash paid for future payments guaranteed during a person’s lifetime) were another common way to plan for Medicaid while still leaving a legacy for the family.  Yet again, additions to the law eventually made annuity planning much more difficult. Prior to 2006, annuities for Medicaid planning could be made privately between families, were only based on life expectancy, and the monthly payments could vary in amounts. Since then, the law has undergone changes and now annuities must be purchased commercially, the payments must be made for roughly the same amount each month, and the state must be listed as the beneficiary on any annuity contract, so that in the event of the individual’s death, the state can then collect the money for payments made on the person’s behalf.

Medicaid planning can have a serious impact on your financial situation if done incorrectly. Just because a family member or friend had luck with a certain strategy years ago when qualifying for Medicaid, does not mean that it is a safe or viable option for your family today.  If you’d like to learn more about Medicaid planning in Ohio, or if you’ve been denied Medicaid coverage and would like to appeal the decision, please contact our office at 877-653-3450 to schedule a complimentary initial consultation.

Ensuring Your Power of Attorney is Accepted in Ohio

The Power of Attorney is one of the most important estate planning documents you can have since it allows another person to make financial decisions for you. However, just because you have a Power of Attorney doesn’t mean it will always work when you need it to.

In some cases, a bank or other financial institution will refuse to accept the Power of Attorney on the basis of age; generally, documents over 3 years old can be considered “stale” and unacceptable. 

In Ohio, you need to be especially sure that the attorney you choose to draft your Power of Attorney has the appropriate experience so that the document really allows your agent to do what you want, when you want.  One of the most important things to keep in mind when drafting a Power of Attorney is that, if what you want is not specifically stated in the document, your agent won’t be able to carry out your wishes. In very broad terms, this means “size matters”.  A two or three page document will most likely NOT do what you want it to do.  It may not even meet the minimum requirements in the State at this time.  If you then think about the very specific tasks you may need your agent to perform on your behalf, the “size” of the document may need to reach 8, 9, or 10 pages to encompass all of those potential tasks.

In other occurrences, a Power of Attorney may be challenged in court by a family member or interested party who believes you’ve been coerced into signing the document. In these cases, there are certain steps you can take to make sure your Power of Attorney will hold up to scrutiny.

First, you should consult with an experienced Ohio estate planning and elder law attorney when drafting a Power of Attorney. Your attorney should be apprised of all state laws and regulations regarding the Power of Attorney, giving you the best and most current protections available.

When it comes time to finalize your Power of Attorney, you must sign it in front of two non-related witnesses, and in the presence of a Notary Public (which may be one of the witnesses) who will put a raised seal on the document. This will ensure that your Power of Attorney will not be rejected because it lacks a raised seal.

Finally, if possible, you should make an appointment each year with your estate and elder law attorney to have your Power of Attorney reviewed and updated according to any changes in the law.  You’ll also have a chance to amend your documents if you simply change your mind about who you want to serve as your agent or the scope of the authority you’ve given that person. By creating an updated document every few years, you will make sure there are no challenges to your Power of Attorney on the basis of it being too old.

If you’d like more information about creating a Power of Attorney, or if you’d like to have your existing Power of Attorney reviewed by an experienced Ohio elder law attorney to make sure it meets, not just the statutory requirements, but also your wants and needs please contact our office at 877-653-3450 to schedule a complimentary initial consultation.

Advance Planning to Help Your Executor

It’s an unfortunate fact that once you pass away, it will be someone else’s responsibility to wrap up your affairs. This can be a daunting and arduous task for your executor if he or she does not know where your important documents are kept, what types of financial accounts you have, or how to access everyday things like your internet passwords or home security PIN number. Providing directions to your executor in the event of your death can make a very difficult time a bit easier, and will go a long way to helping your estate close in an orderly, efficient fashion.

A list with all of your information is the best way to give your executor what he or she needs to take care of your estate. This list should include locations, combinations, or anything else related to:

• Home security systems
• PO boxes
• Home safes

The list should also include information about safe deposit boxes, including the bank where it’s held, the box number, what’s in the box, and the location of the box keys. You should also ensure that your executor is authorized to access the box.

Consider making a list of all of your financial accounts and policies, as well as information about their ownership status (solely- or jointly-owned) and beneficiary designations. In addition, you can provide passwords to your online financial accounts, as well as any email accounts or social media accounts. Keep in mind that as your passwords change and accounts are opened or closed, you will need to update your list. It’s a good idea to review your list anywhere from quarterly to yearly, depending on how many changes you’ve made.

Now, it’s important to note that you do not have to hand this information over to your executor before you pass away, especially if you have any privacy concerns. The information can be given to your estate planning attorney to be kept safe with your other estate planning documents. You can then tell your executor to contact the attorney in the event of your death to retrieve the information and begin settling your estate.

If you’d like more information about advance planning to help your executor, or if you’d like to have your existing estate plan reviewed by an experienced Ohio estate and elder law attorney to ensure your affairs are in order, please contact our Ohio elder law office at 877-653-3450 to schedule a complimentary initial consultation.