Category Archives: Trust

How a Trust Affects Your Ohio Homestead Exemption

By Tricia Applegate

Do I still qualify for the Homestead Exemption if my home is in a Trust? The short answer is yes, with a few provisions. The State of Ohio states:

You are eligible for the homestead exemption if all of the following are true:

  • You created the trust to be effective during your lifetime (an inter vivos trust)

  • You provided the assets for the trust (you are the settlor).

  • The trust agreement contains a provision that says you have complete possession of the property.

Screen Shot 2014-08-12 at 8.03.39 AMRevocable and irrevocable trusts may qualify. Most of the other common forms of property ownership (such as survivorship deeds) also qualify for the exemption. Properties owned by corporations, partnerships, limited liability companies and trusts, other than the trust described above, are not eligible for the homestead exemption because such properties are not owned by an individual.

If you have questions regarding your trust and the homestead exemption, please contact your estate or elder law attorney.  

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

I Don’t Want My Daughter’s Ex-Husband to Get Any of My Estate!

By Attorney Ted Brown

Screen Shot 2014-08-07 at 1.24.29 PMOne of the many benefits of a Living Trust is that it allows you a great deal of flexibility to customize distribution of your assets at your death to avoid undesirable and unintended consequences. One such consequence is an ex-daughter-in-law (or ex-son-in-law) ending up with your assets instead of your grandchildren or remaining family members.

A Living Trust can be specifically drafted to state that, should your daughter pre-decease you, her share will not go to her ex-husband. In addition, the Trust can be used to ensure that her share will be used for the benefit of her children. If those children are minors, the Trust can be drafted to ensure that the funds are managed for their benefit by someone you designate.

Call us today at 1-800-798-5297 to set up a free consultation to learn more about how a Living Trust can help you plan for the unexpected and make sure your assets end up in the hands of your loved ones.

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

The Accidental Beneficiary

By Attorney Daniel Vu

Screen Shot 2014-07-21 at 1.28.55 PMChanging who will inherit your estate can be a lot trickier than you think. You might think that all that you need to do is change your Will. However, changing only your Will would be a costly mistake. The beneficiaries you intend to inherit your estate will lose out on any asset not governed by your Will. Any asset that has named beneficiaries avoids probate and is not governed by a Will. For example, your IRA avoids probate because you most likely have designated beneficiaries on each individual IRA policy. This is also the case with your life insurance policies and many other types of financial accounts. So if most of your assets will avoid probate, changing just your Will would effectively change very little of your estate distribution and it may cause you to accidentally leave something to someone you had no longer wanted to receive as much or anything at all.

If you want to make sure you are not creating an “accidental beneficiary”, you will want to coordinate the changes on your Will and each and every asset that has named beneficiaries. In many cases a Trust can make this easier. For example, if all of your assets are owned (“funded”) into a Trust or made payable to a Trust, then you can make a change with one simple amendment to the Trust. The beneficiaries on all assets owned by the Trust would automatically change. But beware, even if you have a Trust it does not mean that everything will be controlled by the Trust. For various legal or tax reason there may be a select few things that must be left out of the control of the Trust so you will still need to do your due diligence to make sure that all of your distributions by Will, Trust or otherwise are updated to reflect your latest wishes.

Of course it is not uncommon to see people will change their wishes on their Will or Trust but forget about changing their IRA or something else not in the Trust or probated by the Will. This is fine if that difference was intended! Otherwise it's a costly mistake for your intended beneficiaries and a very lucky thing to happen to your now accidental beneficiaries!  

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

Why A Trust Needs to Be Funded

By Bethany Smith

Your trust has been signed so everything is now probated-protected and can be put in the drawer and forgotten – correct? False. This is one of the biggest misconceptions when it comes to the creation of a trust. A signed trust serves no purpose if there are no assets funded to it.

Screen Shot 2014-05-27 at 2.20.39 PMWhen we talking about funding a trust what does that mean? Funding a trust involves retitling assets to the name of the trust in order to avoid probate. For example if a checking account is held in a your individual name with no beneficiaries identified, then it will have to go through the time consuming and sometimes expensive process of being probated with the court. However if the same account has been titled to your trust, then it will avoid probate and follow the distribution you set up in your trust.

Therefore if you have a turst it is important to remember when it comes to funding your trust is to properly title new assets to your trust so they are also protected from probate.   

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

Does your irrevocable trust provide capital gains savings for your heirs?

By Attorney Ted Brown

Irrevocable trusts are commonly used to protect assets from the cost of long-term care and to reduce estate tax liability. However, without the right language, an irrevocable trust can create a potentially crippling and unanticipated capital gains tax problem for your heirs.

Capital gains tax applies to the sale of appreciated assets such as land or stocks. In general, the tax is based on the profit that one earns on the sale. The profit is determined by subtracting the value of the property when you acquired it from the sale price. For example, if you buy a piece of land for $100,000 and you sell it for $225,000, you have a capital gain of $125,000. The $100,000 figure is known as your “cost basis.”

A gift or transfer of property during the owner's lifetime to an irrevocable trust will results in a carry-over in the cost basis to the trust, This means that when the beneficiaries eventually sell the assets given to the trust, they will owe capital gains tax on the difference between the sale price and the price that you paid. Depending on how much the property has appreciated over time, this could result in a stifling capital gains tax problem for the beneficiaries years down the road. In order to avoid this, the trust must contain special language that will pull the value of the trust back into the creator's estate and achieving something known as a step-up in basis.

An irrevocable trust is a very complex estate planning tool. It is very important to understand the many nuances of these trusts and of gifting assets before embarking on such a plan. Call us today to learn about how we can develop a customized plan to protect your assets while still preserving tax benefits for your heirs.  

 

 

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

What Is an Affidavit or Memorandum of Trust?

By Chris Meyer

Screen Shot 2014-04-29 at 12.12.18 PMWhen you or your attorney are funding your trust, you may find that some financial institutions require a copy of your entire trust. Most of us don't want to share the entire trust with these institutions. In order to avoid giving financial institutions the entire trust document, attorneys prepare an affidavit – also known as a memorandum – of trust.

An Affidavit of Trust is a legal document that provides critical information to these institutions such as the legal name of the trust, who set up the trust, who has the authority to act on behalf of the trust (the trustee) and what they can (and can't) do on behalf of the trust. Common elements that are included in an Affidavit of Trust are: the settlors of the trust, the name of the trust, the date the Trust was established, and Trustees of the Trust. An Affidavit of trust generally contains a list of trustee powers.

In addition to funding, there are other times that an Affidavit of Trust is needed. An Affidavit of Trust is prepared to update information when one or more Trustees of the Trust has changed. The trustee may change due to incapacity or death or the trustee may choose not to continue in that role. In this sense, the Affidavit of Trust provides a history of what has happened to those important to the trust.

If you have any further questions about an Affidavit or Memorandum of Trust or would like to learn more about any and all aspects of estate planning, please give our office a call at 1-800-798-5297. Also, be sure to Like us on Facebook to keep up to date with the latest blogs related to Trusts and other Elder Law associated topics.

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

Your Estate Plan Should Reduce Your Legislative Risk, Not Increase It

By Senior Associate Attorney, Dan Vu

Too often estate planners do not consider their client's legislative risk. In other words, they plan without consideration to the very high probability that the current rules will change. In Washington and Columbus, every new bill passed by the legislature is touted as the new permanent law of the land, but in reality it is only “permanent” until the next time they decide to change it. So if your plan does not provide the flexibility for the changing rules, you can actually be in a worse position than you would without any plan.

Let's review an example that just recently occurred in Ohio. Governor Kasich was able to defeat the odds stacked against him when he was able to repeal the Ohio Estate Tax, effective January 1, 2013. Few thought this would actually occur, since Ohio, like most states, is facing budget constraints. For many Ohioans, this law made their current estate plan obsolete. Tradition revocable trust planning contained provisions that were meant to shelter the estate from the Ohio Estate Tax. These types of trusts were called A/B Trusts. But now that the Ohio Estate Tax has been repealed these these older trusts are not only not helpful but they can even now be hurtful. For example, an A/B Trust would now have a less favorable capital gains treatment than having no trust at all!

Screen Shot 2014-04-08 at 12.37.12 PMHowever, just as it is not a good idea to keep an obsolete trust, it is also not a good idea to pretend that the repeal of the Ohio Estate Tax is permanent. A trust should be flexible. We have for many years used “Spousal Options Trusts.” These trusts allow our clients to utilize the traditional benefits of an A/B trust if an estate tax is in effect at the time of death. If there is no Ohio Estate Tax at death, the same trust can instead opt into obtaining favorable capital gains treatment and ignore the estate tax provisions.

All of our trusts have similar types of built-in flexibility. For example, our Heritage Trust is a trust that allows you to leave to your children a protected IRA “stretched” over their individual lifetime. But since we know that the IRA rules may change, it has built-in provision that allows for tax changes to be made even after you and your spouse have long passed away.

So, of course, not planning at all is not the answer. You just need a plan that builds in flexibility so that as the laws change you can always avail yourself to the advantages that the new laws provide and protect yourself from the disadvantages that new laws might impose.

How can you tell if your plan has built-in flexibility? Consider meeting with an experienced elder law attorney for a review.

 

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

Pet Trusts – Not Just For Cats & Dogs

By Attorney Keith Stevens

What do you think of when you hear the word “pet”? Dogs, cats, goldfish, maybe parrots are the first things that occur to most of us. Some people may also think about their geckoes, pythons, and tortoises. There is a staggering variety of creatures being kept as pets and it is only growing.

Our tools for dealing with a variety of animals should be equally flexible. If you were to pass away tomorrow, would your family have access funds to get veterinary care for your horse? If you became mentally incapacitated, would they know how to properly maintain your chinchilla?

Dogs and cats may be the most mainstream of American pets, but they are not the only ones that would benefit from planning. What animals are good candidates for a Pet Trust?

  1. Screen Shot 2014-04-08 at 10.43.46 AMThe long lived. If a friend or family member commits to taking care of your pet after death or incapacity, the longer the pet lives, the greater the potential strain on the caretakers. By providing financially for the pet, you can relieve the stress of an inherited pet. Examples include parrots and tortoises at the extremes, but horses, dogs, cats, even tarantulas and some aquarium fish may live more than twenty years.

  2. The expensive or high maintenance. Some animals simply require more resources for their care than others. If you leave a horse behind, how many people could afford to feed it, let alone house it? For animals that need a greater commitment of resources, a legal solution is the best way to provide for them.

  3. The exotic. A quick search of the Internet reveals Ohio breeders marketing a wide range of exotic pets, including patagonian cavies, kinkajous, African pygmy hedgehogs, flying squirrels, porcupines, lemurs, and even leopards. These make more familiar exotics like ferrets, sugar gliders, llamas and alpacas look routine. If you own an unusual pet, the likelihood that your appointed caregiver will have the resources to meet its unique needs are slim. Using a Pet Trust, you can provide not only financial resources for the pet's care, but also instructions and guidance to its eventual caretaker.

To learn more about planning for your pets, contact the offices of Cooper, Adel & Associates today.

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

Top 5 Reasons to Start a Trust

By Angela Hall

Screen Shot 2014-03-11 at 12.26.33 PM#1 Trusts are private and avoid probate:
A trust offers greater privacy then a will, because it does not go to probate, so there is no public record. This means that your assets can go to your heirs without the cost and involvement of the probate courts in your private financial affairs.

#2 Trusts can help you avoid guardianships:
Many people set up trusts so that they can name the individuals, called successor trustees, who will have the legal authority to manage their financial affairs if they become incapacitated. Having a living trust allows you to select someone to manage your assets without involving a court-appointed guardian.

#3 Trusts can also help you avoid family conflict or strife between the heirs:
A trust is a good tool to help avoid the conflict that sometime arrises when and estate is being settled. A trust can be customized to allow you to detail exactly how and when your assets should be distributed and who gets them. Unlike a will, a trust can be very detailed in its distribution.

#4 Trusts are difficult to contest:
Unlike a will, a revocable living trust is unlikely to be contested. A trust gives you greater protection against legal action from a beneficiary who may not be happy with their distribution of assets.

#5 Trusts can help you protect your heirs:
Trusts allow you to disburse your estate to your beneficiaries in a way that will benefit them the most. For instance, if you have children that have difficulty in managing money or who are in financial difficulty, then you can effectively set up different options which allow the money to be distributed in regular payments rather than lump sum. There are also ways to set up trusts for your children that insure that the money goes down your blood line and is protected against your child's creditors or predators.

Creating a trust or developing an estate plan can be a very complex project. It is very important that you contact an experienced elder law attorney before making your decision to start a trust. The attorneys at Cooper, Adel and Associates will be happy to assist you in your estate plan.  

 

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.

Will Your Death Cause Your Family Distress?

By Jill Besl

Screen Shot 2014-02-10 at 9.15.04 AMHeiress Huguetta Clark's death in 2011 at the age of 104 spawned numerous lawsuits that have dragged on for years. At her death, Clark's estate totaled more than $307 million and included an original Renoir, a Stradivarius violin and an original edition of Paradise Lost. She had no husband, children or siblings; only distant relatives with whom she had little contact.

At her passing, two wills were found. The first will, signed March 7, 2005, left everything to her distant relatives but this will had the word “revoked” handwritten and a line drawn through the first page. The second will, signed just a few weeks later on April 5, 2005, cut out the relatives, stating: I intentionally make no provision in this my last will and testament for any members of my family, whether on my maternal or paternal side, having had minimal contacts with them over the years.” Instead, the new will left $1 million to the hospital where she spent the last 20 years of her life after a serious bout of skin cancer, $100,000 to her personal physician, gifts to the caretakers of her various properties as well as gifts to her lawyers and accountants. Her California property went to a foundation that was to be established to promote the arts and her long-time daytime nurse received Clark's $1.7 million doll collection and 60% of the estate.

It's certainly not difficult to figure out what came next. The relatives contested the April 2005 will, claiming that Clark had been coerced into excluding them from her estate. After years of legal back-and-forth, a tentative settlement was reached in September 2013. Under the terms, the relatives would divide $34.5 million among themselves and many of the other bequests from the second will would not be honored. Then, to complicate matters further, in January 2014, Geraldine Coffey, Clarks night-duty nurse for 20 years would not agree to the settlement. The attorneys for the estate argue that Coffey caused Clark distress by pressuring her for money.

The drama that has persisted for the past three years since Huguetta Clark's death and has signs of continuing. It could have easily been avoided with the proper estate planning documents. As Florida Certified Elder Law Attorney Joseph S. Karp so aptly summed it up: “Multi-millionaires or not, all of us should take steps to ensure that in death, our wishes are carried out and those we care about most are protected.” Seek counsel from an experienced elder law attorney to make sure your family – or those who you wish to receive your assets – understand what you want at your death.

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DISCLAIMER – Every case is different because every case is different. This blog does not give legal advice. This blog does not create an attorney client relationship. You are not permitted to rely on anything in this blog for any reason. This blog is an entirely personal endeavor. Every person's situation is different and requires an attorney to review the situation personally with you.
No attorney-client relationship is created by this site.
The use of the Internet, this blog or email for communication with this firm or any individual member of this firm does not establish an attorney-client relationship. Before we represent any client, the client and the attorney will sign a written retainer agreement. If you do not have a written, signed retainer agreement with us, we are not representing you and will not be taking any action on your behalf.



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