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Category Archives: Probate

A Cautionary Tale of DIY Estate Planning

Written on May 1, 2013 by Cooper, Adel & Associates in Planning, Probate

By Attorney Ted Brown

I recently came across another example of self-help estate planning gone drastically wrong. In this case, Mom was in her 80′s and owned a family farm and a life-savings of conservative investments. She wanted her estate to be divided equally among her four children but wanted to make sure her two sons, who were farmers, got the farm.

So, to keep things simple, she deeded the farm to her two sons, and created a “simple” will leaving everything else (the cash investments) to her two daughters. She used a national legal self-help service to get templates of the necessary documents and was satisfied she had done everything she needed to do while avoiding the costly fees of an estate planning attorney.

However, when Mom passed away things were not nearly as simple as she had hoped. The will that she had prepared was not valid because it did not comply with the complexities of Ohio law. Therefore, her plan to divide the investments among her daughters failed. Not only did her assets have to go through the hassle and expense of probate, but since there was no valid will, her assets were divided according to state law.

This gave the investments equally among all four children. Since she had already given the farm to her sons, they ended up with a larger share and were under no obligation to even things out as mom had intended. However, it turned out that they would need the extra cash to cover the large capital gains tax burden that was created when mom gifted the farm to them while she was alive.

I see cases like this all too often. Estate planning is one of the most important decisions you will make and it is always best to consult a professional who specializes in that area. The legal fee paid to ensure that your estate is in order, up to date with state law and tailored to the specifics of your family will be far less than the fee associated with sorting out a flawed do-it-yourself strategy. Estate planning is like anything else: you get what you pay for.

Why a Trust is Better than a Survivorship Strategy

Written on April 11, 2013 by Cooper, Adel & Associates in Probate, Trust

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By Attorney Ted Brown

Clients often ask me “if they need a trust to avoid probate?” And of course the answer is “no.” There are a variety of ways to avoid the hassle and expense of probate such as survivorship deeds, rights of survivorship accounts and payable on death designations. This is commonly known as a “survivorship” or “payable on death” strategy.

However, this strategy has several major limitations and potential drawbacks. The most significant is that it only allows couples to plan for one stage, or the death of one spouse, at a time. In most cases bank policy does not allow for an account to be jointly owned between two spouses and have a payable on death designation to the children after both pass.

For example, husband and wife can own an account jointly and have it set up that it goes to the survivor without probate. But policy prevents them from also designating that the account be divided among the children at the survivor’s death. Banks will allow the survivor to make that designation only after the first spouse passes. Deed rules also provide the same limitations on real estate.

This strategy will allow a couple to avoid probate at first death, but requires the surviving spouse to take affirmative steps after the first spouse passes away to do the same type of planning. Unfortunately, this second round of planning is commonly not done and the children are faced with a complex and costly probate proceeding at the survivor’s death.

Similarly, this type of planning does not avoid probate in a situation where both spouses pass away at the same time or within a short period.

By contrast, a revocable living trust allows a couple to plan for both stages at the same time. In fact, a trust is the only type of estate planning instrument that can avoid probate at the death of both spouses without requiring any additional action by the survivor. Both spouses maintain complete control over trust assets during life.

Therefore, a trust is an incredibly powerful and cost-effective method of probate planning for a couple, even with modest assets. Of course, your specific situation will dictate the best strategy for you. It is a good idea to discuss any type of estate planning strategy with a professional Elder Law Attorney.

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DOES A TRUST AVOID PROBATE?

Written on July 6, 2012 by Cooper, Adel & Associates in Probate, Trust

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By Mary C. Roberts

Most people, when asked, will tell you that the reason they wish to have a trust is to avoid probate. However, a trust only covers the items that have been funded to it. Too many times the trust is executed and only partially funded. Small accounts or stock items may be ignored and never funded to the trust. Anything left out, or not otherwise covered through a beneficiary designation, is a probate issue.

It is important that the Settlors of the Trust make a diligent effort to see that everything is transferred to the trust, including all real estate, motor vehicles, bank accounts, CDs, money market accounts, stocks or bonds and partnership interests and any and all titled assets that they may own.

As the years go by, you should review your assets periodically to see that any new accounts, motor vehicle purchases or other assets have been titled to the trust. This can be done at anytime.

TIPS TO REMEMBER:

Changes come about in our lives and changes must be made in beneficiary designations and trustee designations to reflect these changes.

If you have a trust, take the time to inventory and review your assets with an elder law attorney to see that all is well. It is always helpful, also, to have an itemized list of your assets in your trust book to save your Successor Trustee significant time when you are gone. Otherwise the search is on. It can take a significant amount of time and energy to complete the marshaling of the assets.

Special Child, Special Trust

Written on April 24, 2012 by Cooper, Adel & Associates in Asset Protection, Health, Probate

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By Angie Miracle

October 1, 2011 was a pretty big day for me. In one fell swoop I became a wife, a daughter-in-law, and a stepmother. The role as wife and daughter-in-law are pretty smooth, I chose a great family to marry into (I now have an uncle who was once the Key West arm-wrestling champion, and believe me, the stories only get better!). Having never been a mother before, the role as stepmother has been an adjustment, but a rewarding one.

My stepson is 8 years old. He is so creative and intelligent, and can be incredibly focused. Just last month he built a Lego structure that included over 3,000 pieces…all on his own…in two days. He stopped only to eat, sleep, and take his medication, which he takes six different kinds of throughout the day.

Tyler had an intestinal transplant when he was 14 months old, and because of this condition he is completely dependent upon those medications to survive. As you can imagine, healthcare costs are astronomical. Our family is fortunate to have wonderful insurance, however, when Tyler becomes an adult, he will never qualify for his own insurance plan. That is why a Special Needs Trust has been put in place for him. This trust is specifically designed so that Tyler's financial needs will be met as an adult. Without the added stress of financial concerns, he can focus simply on his health, which is the way it should be.

Should your family have special needs, Cooper, Adel & Associates can design such a trust for you. Please call us to learn more about a Special Needs Trust.

Wills and Probate Court

Written on April 6, 2012 by Cooper, Adel & Associates in Probate

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By Jessica LoPiccolo

People often think that when they write a Will their estate planning is done. They believe that nothing else is required. Wrong! A Will states who you want your executor and beneficiaries to be, but it does not keep your heirs out of Probate Court. In fact, a Will is the document used by Probate Court to appoint an Executor and to handle your assets – pay your bills, taxes and distribute what’s left – after you pass away.

A Will does not go into effect until the Executor is appointed by the Probate Court. Probate protection requires that you have a beneficiary named to receive assets (your home, your cars, your bank accounts, stocks, bonds, etc.) who is living at your death. There are many ways to accomplish this.

Probating your estate is both costly and time consuming. It will take at least a year in Ohio and can take years to settle up an Estate if there are conflicts.

There are ways to avoid probate, and there are even ways to protect assets from Nursing Home situations. Here at Cooper, Adel & Associates, we specialize in this type of planning. In fact, Elder Law planning is all that we do. Please give us a call to set up a free consultation and to learn how your heirs can avoid the probate process.

Summit County Probate Judge Wants You to Avoid Probate

Written on February 22, 2012 by Cooper, Adel & Associates in Probate

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By Attorney Keith Stevens

Summit County Probate Court Judge Todd McKenney recently started a campaign that may seem bizarre, given his day job – he wants to help people stay out of probate court. The recently-appointed judge has launched a community project to help people examine and redraft deeds to ensure that homes can be transferred outside of probate when a spouse or parent passes away. Initial reports from the project indicate that 37% of examined deeds for married couples who own a home together would still require a probate estate to be opened when one of them died.

Probate can be costly and time-consuming. Creditors must be given time to take a bite of the estate owed to them and expenses can quickly pile up between attorney's fees and filing fees, but Judge McKenney told The Akron Beacon Journal that “It is not just the money, but the frustration of completing the probate estate shortly after the loss of a loved one.” Losing a loved one is hard enough without having to take their estate through the cumbersome and public process of probate.

Judge McKenney's project is a step in the right direction, but with the proper planning you can do much more than just probate protect your real property. What about your bank accounts, mutual funds, stocks, vehicles, and personal belongings? If you get your deed redrafted to protect your spouse, what happens to your children when you both pass away? The probate and elder law attorneys at Cooper, Adel & Associates can help you address these concerns and more.

Reference: http://www.ohio.com/news/probate-judge-launches-project-to-help-some-avoid-probate-1.257454

A Note on Survivorship Deeds

Written on December 2, 2011 by Cooper, Adel & Associates in Important Documents, Planning, Probate

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By Attorney Ted Brown

In the course of my work in Estate and Trust Administration, I often encounter the misconception that real estate owned jointly among spouses contains a right of survivorship. As a result, I see property end up in probate and the estate burdened with time-consuming and costly hassles that could have been avoided.

A right of survivorship is not conferred automatically to joint owners or joint tenants through a general warranty deed. This right is created only by specific wording on the deed itself and is more commonly seen is what is known as a survivorship deed.

While this nuance of property law is lost on many, it is not lost on a probate judge. Spouses, or other joint owners of property, each own an undivided one-half interest in that property. When one spouse dies, that half interest does not automatically pass to the other spouse unless a right of survivorship is granted within the deed. This means that in order for the surviving spouse to get clear title to the entire property, the deceased spouse’s half must go through probate. This can take months and add thousands in unnecessary expense.

The hassle of probate can easily be avoided by placing the property into a trust or with a properly drafted survivorship deed. It is important to seek the counsel of an Elder Law Attorney to explore these options.

How Married Couples should Avoid Probate

Written on September 14, 2011 by Cooper, Adel & Associates in Asset Protection, Probate

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By Attorney Dan Vu

As an Ohio Elder Law Attorney, I am glad to see more and more couples take the necessary steps to avoid the cost and hassle of probate court after their deaths. Most couples avoid probate by owning assets jointly with rights of survivorship. That means the asset is titled so that it will pass automatically to the surviving spouse upon the first death. Although I am glad to see this, I always urge couples to take the next step and finish what they started. Instead of protecting the asset from probate only when one spouse dies, I would urge them to consider taking additional steps to avoid probate if both of them pass away at the same time.

For example, if you own your home or car jointly with your spouse with rights of survivorship and you both pass away at the same time, your home and car will go through probate before being distributed by your Will to your children. A simple way to avoid the cost and hassle of probate for your children, even in this tough-to- imagine scenario, would be to establish a Living Trust. With a Living Trust, even if you both die at the same time, your children will receive the asset without having to endure the delay and cost of the probate process. Further, you have the option to choose a Trust whereby those same assets could be sheltered from applicable federal and state estate taxes, nursing home liens, or even from your children’s creditors. Make sure you see a qualified elder law specialist to see how best to meet your needs.

Probate, Privacy & You

Written on August 11, 2011 by Cooper, Adel & Associates in Probate

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By Attorney Ted Brown

As an Elder Law attorney, I often advise clients of the many benefits of avoiding probate by placing their assets in a trust. Among these benefits are decreased cost of administration, survivor’s immediate access to trust assets and the ability to keep the details of your estate plan private. When a will is admitted to probate it becomes a matter of public record, including the details of what your assets are and who will be getting them.

Apart from the obvious, this lack of privacy can have many negative consequences. I recently heard of a case where a real estate investor used probate records to find business leads. He would search the records for elderly widows holding the family home and attempt to “make on offer” on the house. He would also contact the executor and the attorney for the estate, whose information is also public record, and attempt to inject himself into their affairs, offering cash up front and help finding the surviving spouse new living arrangements. His offers were always low, and played on the economic uncertainty of both the real estate market and the personal finances of the surviving spouse.

This is just one example of the importance of an estate plan focused on avoiding probate. Under Ohio law, assets placed in a trust automatically pass to survivors and do not become public record. Not only does this protect your privacy and the privacy of your estate, but it also protects our heirs from swindlers in their hour of need.

PROBATE ISSUES EVEN WITH A TRUST?

Written on July 15, 2011 by Cooper, Adel & Associates in Probate

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By Mary C. Roberts

YES, there are probate issues that can come up even with a trust and all assets funded to the trust.

Ohio Law says that if a lawsuit has to be filed on behalf of a decedent for the benefit of his or her heirs, that suit must be filed by a representative of the estate and that Letters of Authority must be issued by the Probate Court of the County in which the decedent held residence.

If the decedent was involved in an auto accident or any type of accident or wrongful act that contributed to their death, Ohio Revised Code Sections 2117.05, 2125.02 and 2125.03 state that a wrongful death action must be filed with the Probate Court in order to pay proceeds of settlement to the proper heirs, and that the Probate Court must determine and approve proper distribution to heirs. One of the most common claims we are finding out there today are Mesothelioma Claims.

If you find yourself in a position where there is any possibility of this situation in your life or have been contacted concerning any possible settlement regarding wrongful death, you must find an attorney who can and will file the appropriate pleadings in Probate Court. Cooper, Adel & Associates has an Estate Administration Department that is seasoned in these matters and anxious to serve your needs.