Jarvis Law Office

Should I Change My Estate Plan as I Age?

As people age, new challenges arise – even for issues they thought were already taken care of. For example, many people create estate plans when they’re younger, usually when they first have children, and then leave those plans untouched for several years. During that time, changes occur, and the initial plan might not be suited for your current situation. This is especially true as children age and loved ones pass away as these changes could have a serious impact on the effectiveness of your estate plan. Here are some considerations you should think about for your estate plan:

Last Will and Testament

Most people create a Last Will and Testament when they’re younger to ensure they have a say in who takes care of their children in the event they pass away. This is no longer a concern when the children are grown, however, so it’s a good idea to look at your Last Will and Testament in light of your changed situation. You may want to leave behind a legacy for your kids as well as your grandkids, or perhaps you want to leave something behind for a close niece or nephew. It could even be that you’d rather have your entire estate go to charity. It’s up to you, but keep in mind that the choices you made back when you first created your Last Will and Testament may not apply now to your current situation.

Power of Attorney and Living Will

The Power of Attorney and Living Will let others act on your behalf for financial and healthcare concerns, respectively, if you ever become incapacitated. In both cases, you should take a look at who you named as your agents in both documents and ensure that they’re still the right choices for now. People who create an estate plan when they’re younger sometimes name their parents or siblings on their documents, but when they’re older, those are probably not the best choices. Instead, most seniors will name their adult children to make those decisions for them if they’re incapacitated. You can also decide if you want one agent to take the lead or if your agents must work together. It’s also a good idea to re-examine the choices you made regarding your healthcare as your mind may have changed over the years about the type of care you want to receive.

If you’d like to have your existing estate plan updated to meet your current medical needs, please contact our Elder Law office at 877-653-3450 to schedule a complimentary initial consultation.

How to Fund Your Revocable Living Trust

Creating a revocable living trust is one of the best strategies for avoiding probate and leaving a lasting legacy for your family. However, the true protection afforded by a trust does not come after all the documents are signed – trusts need to be fully funded in order to make a real impact on your plans. Trust funding is one area that must be done by yourself, though experienced estate and elder law attorneys will offer advice on how to fund your trust.

To fund a trust, you must take any assets or property that you’d like to be under the trust protection and turn ownership of those assets or property over to the trust. This doesn’t mean that you won’t get to control the assets or property – on the contrary, as trustee of your own trust you would have just as much control as you did when you had sole ownership. The difference is that in legal terms, the trust is a living document that holds true ownership of the property. This is how revocable living trusts help people avoid probate.

The most common items that are used to fund trusts are real property and financial assets that are titled solely in one person’s name. This is because jointly-held property is not subject to probate until the other joint-holders pass away, though joint-ownership can lead to more problems down the road. Real property is usually transferred to a trust through quit-claim deeds, which give the trust all of a person’s interest in the property.

You can also fund the revocable living trust with other property that does not have a title, such as artwork or family heirlooms. To fund the trust in this way, you would work with an experienced elder law attorney to make a list of the items you’d like the trust to own, which will then be added to the trust as a schedule. This will allow these items to transfer to your beneficiaries without going through probate, and will also leave legal documentation for your beneficiaries so they know exactly which items you intended for them to receive.

If you have any questions about revocable living trusts and funding, or if you’d like to have your current revocable living trust reviewed by an experienced Ohio will and trust attorney to make sure it still fits your needs, please contact our Ohio estate and elder law office at 877-653-3450 to schedule a complimentary initial consultation.

Is a Life Insurance Trust Right for You?

When it comes to asset protection planning for retirement and leaving legacies to your loved ones, there are several different trusts available that can help accomplish your goals. One type of trust called an Irrevocable Life Insurance Trust (ILIT), ensures that the benefits of your life insurance policy are kept separate from your taxable estate.

Experienced elder law attorneys will often recommend ILITs to clients who own large life insurance policies in addition to assets that may put them over state or federal estate tax thresholds. Additionally, ILITs permit policy owners to choose who benefits from the life insurance proceeds and how the benefit payments are made.

But how do you know if an ILIT is right for you? The first step is to talk to an elder law attorney who can determine if this type of trust fits in with your goals, but here is a primer to get you ready for that discussion:

Since an ILIT is an irrevocable trust, it cannot be changed or revoked by the Grantor (the person who makes the trust), and the Grantor must give up all claims of ownership to the assets held in the trust. Once a life insurance policy is transferred to the ILIT, the Grantor is no longer the owner of the policy and technically has no control over the policy or any beneficiary designations.

However, the Grantor is the person who sets the terms of the trust, so they actually can control how and to whom the life insurance distributions are made, as well as at what point those distributions are made. The Grantor names a Trustee, usually a spouse or adult child but sometimes an objective third-party, to oversee the trust and the life insurance policy. One thing to note is that the life insurance policy ownership must be transferred to the ILIT at least three years before the death of the Grantor, otherwise, the trust will not be valid.

An Irrevocable Life Insurance Trust takes a lot of skill and expertise to craft correctly. Fine attention to detail and knowledge of the estate tax system is necessary when the trust is drafted, which is why an experienced elder law attorney should be the only one to put together this type of trust. If it’s done incorrectly, your estate will be responsible for paying estate taxes on your life insurance policies while your wishes for your beneficiaries may not be fulfilled.

If you think an Irrevocable Life Insurance Trust is a good fit for your situation, or if you’d like an experienced elder law attorney to review your existing irrevocable life insurance trust, please contact our Ohio elder law office at 877-653-3450 to schedule a complimentary initial consultation.

How to Help Manage a Senior Family Member's Finances

Senior citizens can be very vulnerable to financial problems, often because the ability to care for such complex concerns tends to decline with age. This may cause serious problems, such as having utilities shut off, late housing payments, or falling behind on other bills and necessities.

Once headed down this path, problems tend to compound, making it difficult to dig back out of this financial hole Family members may want to help their senior loved ones manage their finances, but it’s usually not as easy as just jumping in to lend a hand. Certain documents or legal proceedings may be necessary to ensure finances are handled correctly and by the right people.

Many families use a financial power of attorney (POA) document to help their senior family members. Common types include a durable POA, which is in effect as soon as the senior signs it or a springing POA, which only comes into effect when a doctor determines that the senior is incapacitated. The POA names an agent to care for the financial concerns and that person has a legal, fiduciary duty to make sound financial decisions for their loved one.

A revocable living trust can also help to handle financial affairs. At the time the trust is created, the Grantor names a Trustee to be in charge of all trust property and a Successor Trustee to serve if the original Trustee is ever unable to carry out their duties. The Grantor usually serves as the initial Trustee, but when they can no longer handle their own affairs they’ll turn control over to the Successor Trustee. The Successor Trustee also has a legal and fiduciary duty to only act in the best interest of the Grantor.

Finally, a conservatorship is a legal proceeding that grants control of an incapacitated person’s financial and health care concerns to a court-appointed conservator. This is often a last case scenario if the senior did not create a POA or revocable living trust. A family member is usually named as conservator, but there are times when an independent party is named by the court instead.

If you have additional questions about managing an elderly family member’s finances, or if you’d like to discuss strategies to make sure your loved one is always in sound financial hands, please contact Jarvis Law Office at 877-653-3450 to schedule an initial complimentary consultation.

Avoiding Will Contests in Ohio

Will contests can occur when a family member or other beneficiary receives less of a share of their inheritance, or were completely written out of a last will and testament, and feel that the decisions regarding their inheritance render the will invalid. A case is brought in the probate court, and the validity of the will is determined by a judge. Will contests cause all those involved a significant amount of money and can leave family relationships beyond repair. No-contest clauses allow will makers an option to at least try to avoid some of the consequences of a will contest.

In the simplest terms, a no-contest clause is inserted into a last will and testament and states that if any beneficiary should challenge the validity of the will in court and lose, they will also lose whatever inheritance was left to them in the will. It may cause your disgruntled beneficiaries to think twice before bringing a will contest before a judge, because they risk losing out on their entire inheritance and will be saddled with some fairly expensive legal fees. In addition, Ohio state law does not recognize good faith or probable cause issues concerning no-contest clauses in will contests. This is different from many other states, which hold that if a person brings a will contest forward with probable cause, good faith, or other justifications, the no-contest clause may be ruled invalid.

However, no-contest clauses do not eliminate the threat of will contests entirely. For example, if you completely disinherit a family member from your last will and testament who otherwise would have received some sort of inheritance, a no-contest clause will not stop them from bringing a challenge to court, since they already have nothing to lose. A person bringing a will contest may also win their challenge, rendering the no-contest clause invalid and changing beneficiary distributions from what the will originally laid out.

If you think a will contest is possible after your death, it’s important to speak with an Ohio will attorney about your options, including adding a no-contest clause. An experienced attorney can run through possible scenarios with you, and provide advice relevant to your individual situation.

For more information about no-contest clauses and how they can help avoid legal challenges after your death, or if you’d like to review your current estate plan, please contact our office at 877-653-3450 to schedule an initial complimentary consultation.

Ohio Will and Trust Lawyer: Should My Will Have Co-Executors?

When making an estate plan and Last Will and Testament, many people have a difficult time deciding who should be the Executor of their estate. Oftentimes, they will consider naming Co-Executors – two or more people who serve as executor of the estate. Each Co-Executor named in your Last Will and Testament will have authority over your estate, and therefore must collaborate and work together to ensure your estate is settled in accordance with your wishes. But, is this the right choice for you? Below are some pros and cons to naming Co-Executors in your Will.

Pros for Naming Co-Executors of an Estate

One of the reasons Co-Executors are named in an estate is if there are multiple types of assets that need to be handled. The best example of this would be if you owned digital assets along with tangible assets, yet the Executor you want to name for your estate would not be correctly suited to handle digital assets. In this case, you may want to name a Co-Executor specifically to look after your estate’s digital assets. The same could be said for real estate or automotive properties. We often bring this scenario up with their clients and encourage them to carefully consider their options when naming Co-Executors to settle their estate.

Cons for Naming Co-Executors of an Estate

Most Ohio Will and Trust lawyers advise their clients to think very carefully about the dynamics that exist between the people they would name as Co-Executors. Many times, the stresses of being named Co-Executor can lead to fighting, and, in some cases, litigation if the Co-Executors do not see eye-to-eye. In addition, if it’s possible that the Co-Executors may not work well together or will have difficulty carrying out their duties because they live in different areas, you may want to consider naming just one Executor. Proper planning and communication with your Executor / Co-Executors may solve some of these problems, but, once again, it is suggested that those considering naming Co-Executors weigh the potential benefits against the probable risks.

It should also be noted that in some cases, even if Co-Executors are named in a Will, one or more of the Co-Executors will resign from their position in an attempt to make the process a bit easier by reducing the number of people involved in authoritative roles.

If you have any questions about naming Co-Executors in your Last Will and Testament, or if you want your estate plan reviewed to make sure it is in accordance with your wishes, please contact us at 1-877-653-3450 to set up a complimentary initial consultation.

Disinheriting a Child? Do it right, or things could go very wrong

Family squabbles: most of us have experienced them at one time or another. Typically, things work themselves out and family harmony is restored. However, there are some family squabbles that never get resolved. If you have changed your will due to family conflict, you might want to keep a few things in mind to make sure that the instructions you laid out in your documents are followed when you pass away.

Here are a few situations that could leave your will vulnerable to court action. Read on so that you can be sure that your will cannot be contested in court.

1. Create your will now. A “deathbed will,” especially one that excludes a close family member, is often suspect.
2. Give a reason. If you decide to disinherit your child, it can help to provide an explanation in your will. This can show the family and the local probate court that your decision was intentional and well-thought out.
3. Giving too much, or too little, to a child. Even if you simply reduce the amount you give to one child over another, it is important to document a reason. For example, one of your children may have served as your caregiver and you’d like to compensate them more for his or her efforts. Whatever the reason, make sure it is clear in your will.
4. Giving your money to a non-relative. If you decide that you would rather leave your money to a non-relative over your children, it is especially important to do things right. The court is highly suspicious of situations like these. In such cases, it is best to seek the assistance of an estate planning attorney in Ohio.
5. Your will was not prepared and signed by an attorney. It is perfectly legal to create a will on your own. However, if there is anything controversial (like leaving out a child) you really should have it done and witnessed by an estate planning attorney in Ohio to make sure that the instructions you left are followed.
6. You have executed multiple wills in the years just prior to your passing. Family squabbles start and stop…and then start again. If you have created wills, rescinded them, then created additional wills as the family conflict continued, your many will-altering attempts will likely raise a red flag about your true (and final) wishes in probate court.

 

If any of these warnings make you feel uneasy about the state and validity of your current will, call our office at 1-877-653-3450. We will be happy to review your documents to ensure that they are properly created and will be executed someday just as you planned.

Protecting Assets from All Sorts of Creditors

A wealthy person has often thought they were protected from their spouse by a prenuptial agreement, only to learn the situation was not as safe as they thought. But there are other ways to be protected, according to Private Wealth in "Cracks In Your Assets?"

Another possible way of protecting assets, such as an individual business, is to turn that business into a partnership or LLC. However, that is not a perfect solution since the creditor can still intercept any payments from the entity to the wealthy debtor.

A newer solution is to create a self-settled asset protection trust. After a short period of time, assets in these trusts are untouchable by creditors.

Seventeen states now allow these trusts.                                                                                                      

Another possibility is to use an offshore trust, since U.S. courts do not have jurisdiction over them in most cases.

A wills and trusts attorney can advise you on protecting your assets with a plan that fits your unique circumstances

Reference: Private Wealth (April 21, 2017) "Cracks In Your Assets?"

Community Property Can Be Beneficial

Despite the bad reputation of community property, based on television and movies, the facts are that there are capital gains tax advantages to community property. Everyone can take advantage of them by creating a community property trust, according to Wealth Management in "What Is Community Property and What Are Community Property Trusts?"

The fact is that only nine states have community property laws, which is a special way that married spouses hold title to property they received through joint effort.

The big advantage of a community property trust is that assets held in such a trust, can receive a double step-up in basis for capital gains tax purposes. When one spouse passes away and the other inherits the assets, all of the assets receive a full step-up in basis. This often results in little or no capital gains tax, when such assets are later sold.

Only two states, Alaska and Tennessee, allow community property trusts, but you are not required to live in those states to create trusts there.

An estate planning attorney can guide you in creating an estate plan that meets your unique circumstances which may include a community property trust.

Reference: Wealth Management (April 18, 2017) "What Is Community Property and What Are Community Property Trusts?"

When Is an Irrevocable Trusts Revocable?

Irrevocable trusts may no longer be truly irrevocable, according to Forbes in "Old Money, New Bottle: Decant If You Don't Like the Terms Of An Old Trust."

There can be a big drawback to irrevocable trusts because they are irrevocable. Once the trust is properly executed, it is supposed to be set in stone.

 As a result of this, many people have shied away. This is especially true of the young who can expect that things will change during their lifetime.

However, there are now 25 states that allow old trusts to be decanted.                         

This process entails taking all of the assets from an old trust and putting them in an entirely new trust with different terms. It is technically the trustee who is allowed to do this. It is supposed to be for the benefit of the trust beneficiaries.

Interestingly, the trustee does not need to have permission from a court and often does not even need to inform the beneficiaries. The different states that allow decanting have different rules about what trust terms can be changed in the new trust. You will, therefore, want to seek out experts to make sure you decant in a state that allows you to do so.

An estate planning attorney can guide you in creating an estate plan that fits your unique circumstances.  They can also explain your options with any plans or trusts you may now have.

Reference: Forbes (March 16, 2017) "Old Money, New Bottle: Decant If You Don't Like the Terms Of An Old Trust."