Practice Areas

Wills and Estate Planning

Wills and Estate Planning

Our firm provides advice on estate planning and administration and documents that may be necessary during life.  These documents include the preparation of Wills, Business Power of Attorneys, Health Care Power of Attorneys, Living Wills, HIPAA compliance.

Tax Planning

Most people spend a lifetime struggling to accumulate an estate but very little time planning how to keep it.  Good estate planning will address the protection of assets during life as well as at death and additionally will require paying attention to non-monetary aspects of our lives.  Even if Federal and State governments suddenly eliminated gift, estate and inheritance taxes, estate planning would still be needed and, barring permanent elimination of these taxes (as happened in 2010 in which there was no federal estate tax), each person with a substantial estate is exposed to significant tax loss, up to 45% of the total estate (No Ohio Estate tax) and, in some cases where generation skipping tax is involved, the tax can even exceed the value of the asset involved.  To begin to understand estate planning you must first understand that it is not an event which happens once and is finished but rather it is a process which addresses multiple objectives on an ongoing basis.  As circumstances change the plan may need to change. The most notable objectives of an estate plan will include the following:

THE MANAGEMENT OF ASSETS AND BUSINESS AFFAIRS DURING YOUR LIFETIME.
THE TRANSFER OF YOUR ESTATE TO YOUR CHOSEN BENEFICIARIES IN THE MANNER YOU DESIRE.
REDUCTION OF GIFT AND ESTATE TRANSFER TAXES.
PROVIDING ADEQUATE FUNDS TO PAY ESTATE TAXES AND EXPENSES.

Deciding who you wish to benefit and how is usually the simple part and may be all you need to worry about if your total assets (including insurance, qualified plan and IRA benefits) are under the Applicable Credit Amount.  This "Credit Amount" is more easily understood as the amount of property which each person may transfer during his or her lifetime or at death, without incurring federal tax (in addition to annual exclusions gifts). This amount applies to the total combined transfers made by a person during life and at death.  You can find the federal estate tax exemption (which changes due to inflation by clicking here Historical Estate and Gift Tax Rates.

If your estate is over the available exemption amount you will have a challenge to maximize the net amount you can retain for your family.  This requires planning and regular review.  There are many factors which can influence the final result but, contrary to common belief, the most important factor in minimizing the loss to your estate is not probate but the tax that is imposed on the transfer of assets.  It is important to focus on avoiding probate costs for those who do not have a federal estate tax problem, but for those who do estate taxes become much more important.  The tax impact can be expected to average 35% on most estates in excess of the exempt amount and the tax can be even higher up to 45%.  In the case of qualified plans and IRA's the tax (including income tax) can reach 60% or more while a Generation Skipping Tax problem can cost you more than the assets are even worth. This is hard to believe but it is true and once you understand the tax problem it becomes easy to understand why it is not the probate costs but the transfer tax which should drive most of your estate planning, though probate costs are certainly part of the equation.

As of January 1, 2013, the state of Ohio no longer imposes an estate tax on the transfer of assets for resident or non-resident decedents. The Federal tax is a tax imposed on the transfer of property, either during your lifetime as a gift or at your death.  Excluding Charitable, Marital and Annual Exclusion gifts, the tax applies to each dollar transferred which exceeds the applicable credit (lifetime exemption) amount.  The tax rates are graduated but Federal gift and estate taxes start at 18% and go rapidly to the top federal rate of 40%.  The high federal exemption eliminates state estate taxes for the majority of estates.  

In addition to considering Federal death tax you must never lose sight of the Generation Skipping tax (GST).  The effective tax, if it catches you, can be equal to the federal estate tax, effectively doubling the total tax involved.  If your assets exceed the exemption you need to be careful to avoid what could be grave financial danger.  Married couples may be able to achieve a double exemption.   Fortunately GST is not a problem for transfers to spouses or children, but any transfer to a grandchild or someone else in that generation or below must be carefully examined.

Probate Administration

Probate is simply a court process of paying your debts and distributing your remaining assets at the time of your death to the correct beneficiaries.  The court distributes your assets according to the terms of your Will. If you do not have a Will, the court distributes your assets according to the laws of intestate succession.

In either case, your executor or administrator, as the case may be, first assembles your assets. Next, the executor pays the costs of the probate, taxes, and your debts. If there are not enough assets to pay the costs of probate, taxes and debts then the assets will be prorated based on a schedule established by the Ohio Revised Code.

Nursing Home Costs (Medicaid) 

Clients often believe that Probate costs are their biggest concern yet taxes are a bigger problem and nursing home costs could be the biggest problem of all. Potentially every dollar you have except for $2,000 (which an individual is permitted to keep in 2018) may be lost to nursing home expenses.

First you should understand the difference between Medicaid and Medicare. Medicaid is a government program to fund skilled nursing care for those who do not have the funds to pay for themselves. Medicare is the government health care benefits plan for people over the age of 65 and/or in certain special situations. In the Medicaid area we work with clients who are worried about losing their life savings to the high cost of skilled nursing home care. We help potential Medicaid applicants and their families protect as many assets as the law will allow and alleviate anxiety associated with the transition from their home to a skilled nursing facility.  The cost of long-term skilled nursing care presents a significant threat to the estate preservation for many of our clients and their families.

The most common reason we hear from people about why they did not plan for Medicaid is that they simply thought nothing could be done. But this answer is not correct. We often work with clients for years planning for Medicaid eligibility and the Medicaid application itself. We will not suggest anything contrary to the law but understanding how the law operates can help you make better choices.  Before applying for Medicaid you must “spend down” to a certain level before you will be accepted on Medicaid but there are better and worse ways to do that. 

The term "spend down" does not equate to being penniless particularly for a married couple. There are asset exemptions and other planning techniques that can be used to maximize what is retained by the family. Case Workers, while often helpful, are not always concerned with how much money you can preserve for your family. Their job is not to protect your family's assets by providing you advice, but to process paperwork and get your loved one qualified. How you become qualified for Medicaid can be the difference between being penniless and preserving some portion of the institutionalized person's lifetime accumulation of assets. 

The lack of understanding in this area often leads to ill-fated results. For example, one client had spent the majority of her and her husband’s assets prior to seeing us. She only came to see us to determine how she would live once her husband was put on Medicaid when they had no money. In addition to her house with equity less than $572,000 and her car she would have been entitled to keep nearly 124,000 of assets had she come in three or four years earlier when her husband first had his stroke. Unfortunately, because of her delay in seeing us she exhausted a good deal of money unnecessarily. There is a lot of misinformation floating around regarding Medicaid and you should make an appointment to see one of our attorneys if you believe Medicaid may be on the horizon. The impulse to give everything to the children, relative or friend is usually NOT the best answer and can make things worse if that person will be going into a nursing home within a short period of time.  Even if you see no reason to anticipate the need for nursing care now you would still benefit from understanding the law in advance in case the need ever develops. What you learn may benefit not only yourself but your parents and other relatives. 

Our firm assists seniors and their families plot a course through this tricky area of law. We have the expertise and experience in this area to provide you and your family with a comprehensive evaluation of your needs, to devise a plan of action and to provide all the support necessary to execute the plan.

Real Estate

Our firm has represented sellers, buyers, developers, real estate agents, tenants and financial institutions. We provide commercial and residential real estate services to a variety of business and individual clients. We can help you with any of the following: Purchase and sale contracts, Lease review and representation, Closing review and preparation and/or Complete Cash Closings

We have handled a wide range of real estate transactions and would be happy to assist you with any of your real estate needs.

Business Entities and Asset Protection

Our attorneys work with a large assortment of entrepreneurs and business owners to provide general legal advice and assistance in the areas of contracts, business formation and business tax needs.  Insulating your personal assets from your business assets is one basic reason to create a business.

Avoiding Probate

Probate is the name given to the process by which the law guarantees that your wishes as to disposition of your property will be implemented after death. Many people spend a great deal of time and money trying to avoid probate, but the process remains one of the most time tested and effective means of guaranteeing an end result. Depending upon the estate involved the costs connected with probate avoidance can rival probate costs and create considerably more confusion during life. While probate avoidance should always be given consideration it is not the be all end all, however as between spouses it is almost always recommended.  Interestingly living trusts, though highly touted and commercially promoted, are not always the best way to avoid probate and they are certainly the most complicated and expensive way and necessary in some cases.  Under the right facts and circumstances simple "payable on death" or "transfer on death" arrangements which cost little to nothing are often just as effective.  

 Additionally, though Probate has been highly demonized, often as a sales tool to promote living trusts, it is not as bad as it has been made out to be. Probate does cost time and money, however, it generally lasts only about six months and when it is longer it is generally for reasons which exist exclusive of whether probate is avoided or not. To the extent delay is caused by tax issues (a common cause) these problems will exist with or without Probate. Eliminating Probate does not completely eliminate expenses and delay and it can create a false sense of security. 

In Ohio, Probate costs can be limited with proper planning, to about three percent of your estate and the cost is closer to two percent as the estate increases in size.  Even two percent can be a lot of money on a larger estate but it pales in comparison to federal estate taxes that can be as much as forty-five percent of your estate and nursing home costs which can consume an entire estate.  Accordingly, when someone warns you against the “twin monsters” of probate and taxes you should be aware that tax avoidance should be the priority and neither may cost as much as nursing home expense.  It is always wise to spend the extra time and money to avoid estate tax but avoiding probate is more of a cost benefit analysis.  In other words, how much time, effort, energy, money and hassle do you want to spend during your life to save your heirs two or three percent of your estate after your death. For example, with three children each child might receive thirty-two (32%) percent instead of thirty-three percent (33%) if you go through probate. Avoiding probate should always be evaluated while devising your estate plan. An important initial step when preparing an estate plan is to be aware of the legal forms of property transferred upon death. Assets pass from an estate to recipients in one of three basic ways:

Designation of Beneficiary: The immediate successor of some forms of assets are predetermined by law. These assets include life estates, joint tenancy, life insurance and annuities, and any account with a named beneficiary. They are passed on at death and do not go through the probate process.

Contracts: Some forms of assets, such as trusts (including revocable and irrevocable trusts), some retirement benefits, partnership agreements, and buy-sell stock purchase agreements specifically define successor ownership. This form of transfer also passes property to the defined party without being subject to probate.

Probate: Any monies or properties that do not pass by designation of beneficiary or by contract are passed through probate proceedings. These assets are processed by a personal representative, called an executor or administrator whose job it is to see that property passes as you have designated in your will or, if you have no will, as provided by law.  

Proper planning can reduce administration costs, minimize estate and gift taxes, and prevent outside claims from complicating the execution of the will. You can ensure that your assets are properly passed down to the parties that they are intended for. 

A sample of some additional tools used for probate avoidance:

Joint Tenancy with Right of Survivorship:  This is a form of ownership where title passes automatically to the surviving joint tenant thereby avoiding probate, however some filings may still be required in the recorders office depending on the type of asset.  There may, however, be income tax disadvantages to this arrangement and creditors of either joint owner may be able to attach the asset.  It may also frustrate planning which was anticipated in carefully drafted wills and trusts.

Life Insurance:  The proceeds of life insurance are not subject to probate administration, unless the insured's estate is the beneficiary, or there is no named beneficiary or where all of the named beneficiaries have predeceased the insured.  Special attention must be paid to how title to the policy is held if there are possible federal estate tax issues.

Lifetime Gifts:  All properly made gifts avoid probate including gifts made immediately prior to death. However, the value of these gifts may be brought back into the estate for estate tax purposes.  Additionally, all outright gifts with no retained interest will have a carry-over basis which means that the donor's basis will follow to the donee. On the other hand, appreciated assets taxable in the decedent's estate will generally get a "stepped-up" basis to the fair market value at the date of death (though there is only limited stepped up basis in 2010). This creates an important planning decision since later disposition of the assets may generate significant capital gains tax where the carry over basis is low. 

Retirement Assets:  Retirement assets are the most tricky assets as they generally carry both estate tax and income tax consequences that must be carefully considered prior to any planning.  Who should be the beneficiary?  Individuals, Trusts, Charitable Beneficiaries or the Estate?  Almost always spouses will name each other because spouse have special roll over rights that other individual cannot benefit from.  Non-spouses can only receive inherited IRA's which payout during your lifetime or within five years after the original account holder passed away.  Naming your trust can cause many problems and must be done in a special way to achieve the greatest tax advantages when passed to the next generation.  

Living Trust: Living trusts are really just revocable trusts which become effective during your life (inter vivos trusts) as contrasted with trusts that do not become effective until your death such as testamentary trusts. The term “living trust” has, however, taken on a whole new life of its own due to heavy commercialization of the concept of probate avoidance. Today a living trust has come to mean a fully funded revocable inter vivos trust whereby the creator of the trust transfers ownership of all, or mostly all, of his or her assets into the name of the trust during life. This avoids Probate because at your death you do not own the assets, which are instead owned by your trust and the trust does not die so there is no need for Probate as to those assets. It is important to remember, however, that such a trust, for most people, has zero estate tax benefit. The Living Trust is an effective method of avoiding probate.  It has the advantage over other techniques of Probate avoidance in that it provides control and management of the funds during life and after the decedent's death and it makes provisions for alternate dispositions if what you expect to happen changes for some reason as, for example, due to an unexpected or premature death.  Also, if the person setting up the Living Trust (Grantor) becomes mentally incompetent or otherwise incapacitated then a Successor Trustee can take over control of the estate, but still must comply with the terms established by the Grantor. The biggest downside to establishing a trust is the cost associated with its establishment.  Some people spend more money creating a trust than they would have spent going through probate.  A/B trusts are the "living trusts" used to avoid estate taxes when you have 4.5 million or more.  It is the necessary first step in tax planning and must be done in lieu of relying on portability (government created tool to help reduce the need for A/B trust planning) due to some negative factors surrounding the use of portability.