Jarvis Law Office

How to Avoid Probate in Ohio with a Roth IRA

Roth IRAs provide excellent tax benefits to those who use them for retirement planning, but these types of IRAs can also help to avoid probate in Ohio.

To start, here are some of the basics about Roth IRAs for tax-planning purposes:

• Contributions to a Roth IRA are not tax-deductible, unlike other traditional retirement accounts.
• Distributions made if you are at least 59 ½ or if the account has been open for more than five years are not taxed.
• Income tax is paid when contributions are made, making eventual withdrawals tax-free.
• There are no required minimum withdrawals with a Roth IRA.

The last point is the one that makes Roth IRAs perfect for avoiding probate in Ohio, as long as you follow these two steps: 1) Let your savings accumulate tax-free in a Roth IRA indefinitely, and 2) Name a beneficiary to your account.

When you pass away, the account will go to your named beneficiary, and the assets in the Roth IRA will not have to go through the probate process like other assets that are solely owned by you. You should regularly check your beneficiary designations to make sure they’re up to date. If, for example, your late spouse was named as the beneficiary of your Roth IRA, the Roth IRA will become part of your probate estate if you do not name any replacement beneficiaries.

It is important to note, though, that there are some limitations to Roth IRAs. As of 2018, individuals under the age of 50 can only contribute up to $5,500 a year into their Roth IRAs, while people 50 and over can contribute $6,500 a year. In addition, you can only contribute to a Roth IRA if your income is below a threshold of $135,000 for single filers and $199,000 for married joint-filers. Contribution limits decrease as you move further up the threshold.

You may also have to pay income taxes or early distribution taxes if you make unqualified distributions, such as distributions before the age of 59 ½ or before the Roth IRA is five years old. However, you may be eligible for a tax-free distribution if you make the withdrawal to purchase your first home or if you need the money due to a disability.

If you have any questions about using a Roth IRA for estate planning, or if you’d like to have your current estate plan reviewed, please contact us at 877-653-3450 to schedule a complimentary initial consultation.

Ohio Elder Law Attorney: Four Warning Signs of Dementia

Clients will sometimes contact us to discuss their fears that a parent or other loved one is showing signs of dementia and may not be able to make important legal or financial decisions. There are ways the law can help protect this person’s assets in the event of dementia and other mental impairments.

While there is no cure for dementia, there are certain treatments that can slow the effects and help make life easier for the afflicted and their caregivers. However, dementia must be caught early, which is why it’s important to recognize the most common warning signs listed below.

Personality Changes and Mood Swings

Dementia can often make seniors depressed and cause mood swings. Because dementia is a cognitive impairment that affects the ability to make good judgments, it can cause those suffering from it to act out of character. Monitoring for personality changes and uncommon mood swings is important.

Confusion

Many seniors with dementia suffer from confusion, which often leads to agitation. An early warning sign of dementia is constant repetition, as seniors afflicted by dementia often repeat things they’ve said just minutes after they’ve already said them. You may also want to be on the lookout for items being put in strange places, like car keys or a purse put in the refrigerator or the oven. In addition, you may want to test whether the senior has difficulty following task-based directions, such as cooking from a well-known recipe.

Getting Lost

If a senior seems to get lost more and more often while driving, this could be a big warning sign that they may have dementia – and that access to the car may need to be taken away. Key warning signs include getting confused and lost while driving in familiar areas, as well as not recognizing familiar landmarks or knowing where those landmarks are located.

Memory Loss

The most common and well-known warning sign of dementia, and the most devastating for families, is memory loss. Short-term memory loss is typical of early-stage dementia. Failing to recognize family members like a spouse, children, or grandchildren typically occurs in later stage dementia, though you should still be concerned if the senior has trouble recalling names or calls family members by other names.

If one of your senior family members is suffering from dementia, or if you have noticed one or more of these warning signs in a senior family member, please contact our Ohio estate and elder law attorneys at 877-653-3450 to schedule a complimentary initial consultation.

Ohio Estate Planning Lawyer: Four Threats to Your Assets and Wealth

An individual’s property and assets can be attacked in many different ways, all of which can have a serious detrimental impact on their wealth. A primary purpose of asset protection planning is to guard you from losing your wealth, as seen in the following examples.

Business Liabilities

Business liabilities can lead to attacks on your personal assets. If your business faces a problem and your personal assets are not properly shielded, you may find that both your business and personal assets can be at risk. LLCs and other business entities are typically created to separate business assets from personal assets, but a proper strategy and advanced planning are essential to make sure you have not left your personal assets open to any potential attacks.

Divorce

A divorce can be a dangerous threat to your asset protection plan. Without a proper prenuptial agreement in place, you may find that your wealth is up for grabs during divorce proceedings, even if you’ve only been married to your spouse for a short time. (Celebrity divorce cases, such as Paul McCartney and Heather Mills, immediately come to mind.) There are certain strategies that can be used to protect assets from divorce, but it’s best to consult with an Ohio estate planning attorney to determine which strategy is right for you.

Sickness

Medical bills that accrue due to an illness or long-term care could very easily drain your wealth. This is most true for senior citizens who are in need of nursing home care – and who mistakenly believe that Medicare and long-term care insurance will cover all of their medical bills. Asset protection trusts are often used to protect wealth from Medicaid and nursing homes, but they must be drafted a certain way by qualified elder law attorneys here in Ohio.

Automobile Accident

Being wealthy can unfortunately lead to a painted target on your back. If a person of fairly modest means caused a car accident and was found to be at fault, they most likely would not be pursued for a large sum of money. – The opposite is true for someone who possesses a large amount of wealth. Asset protection can be done before an accident happens to help shield your wealth, but this is not the case after the accident has occurred.  The earlier you can plan, the better.

If you have any questions about asset protection planning and strategies to shield your wealth, or if you’d like to review your current asset protection plan, please contact our Ohio estate and asset protection lawyers at 877-653-3450 to schedule an initial consultation.