When working with an estate planning attorney to determine if you should create a trust for your children, you will need to determine the answers to several imperative questions.  The first one most people ask is “how much?”  How much money will you be leaving for your children?  If you are leaving a considerable amount (say more than $100,000), or if you have very specific intentions for the money, then your Independence estate planning attorney may advise you to put the money into a trust.

The trust itself can give you the opportunity to really outline how you want the money to be used.  This can be helpful in ensuring that your children have the opportunities that you intend to provide.  Money may be set aside for the purpose of a college education, with stipulations that it is not to be used for other purposes (like a new car or a wedding, for example).  For minor children, this type of control may seem even more important, as the money in the trust can be designated for basic necessities such as food, medical care, and clothing.  This discourages a guardian from mishandling the funds.

Another question to ask regarding a trust has to do with when you want the funds to be dispersed.  Some people choose to defer the funds for a set number of years or until their child(ren) reach(es) a specific age.  This can be advantageous because very young people may not yet possess the maturity and life experience to handle a large sum of money well.  Access to a trust at a young age can also impeded the child’s drive to pursue his or her own pursuits.  An estate planning attorney can offer guidance in how other parents have chosen to deal with these concerns.

There are a lot of considerations to be made during the estate planning process.  A good attorney will help to identify which issues are the most pertinent for your particular situation and will then offer suggestions and solutions to any obstacles or concerns you may be facing.  Estate planning professionals understand the importance of using wills, trusts, and other tools in order to provide financial security for the next generation.

It’s well known that Ivy League schools can cost over $50,000 a year, while state university programs can cost up to $25,000, with prices projected to climb.  Add to the mix the cost of graduate degrees and its very likely today’s college student will leave school with a six-figure mess on their hands.

Prior to the Tax Relief Act of 2010, there were two big tax breaks grandparents and parents could claim to help their loved ones offset college expenses.   They could (and still can) pay any amount of tuition directly to an accredited school for a grandchild’s education without a gift-tax requirement.  And, at the time of this writing (2012), an individual may gift up to $13,000 per year tax-free.

Additionally, grandparents may set up custodial accounts or fund a 529 college savings plan for their grandchildren.  Because of the larger tax exemption, many professionals are seeing a trend of grandparents earmarking education expenses for grandchildren who are toddlers or even unborn grandchildren.  Another option is setting up one large trust for multiple grandchildren and even future generations.

There is one downside to setting up a trust, however, as students must report irrevocable trusts on their financial aid forms.  Even if the trust doesn’t provide for income until after college graduation, it is counted.

That is why if you are a grandparent who doesn’t plan to pay the entire cost of college, you might consider contributing to a 529 plan instead.  An experienced estate planning attorney in Independence can help you weight your options regarding this matter.

If you would like to learn more about saving for college and how to best plan for your grandchildren’s educational future, let’s sit down and talk.  I would be happy to discuss your financial and estate planning needs.  Simply call our Independence estate planning law firm at (440)449-3266 and ask to schedule a Protect My Future Planning Session with the mention of this article ($750 value).

While nearly every physician is at risk for a lawsuit, there are some doctors who experience legal claims more than most.  Three of the most at-risk medical professions for lawsuits include obstetrics, neurosurgery, and radiology.

The reasons for the high percentage of medical claims in these fields are varied and complicated, but it often boils down to the rate of risk associated with these areas, rather than with lack of skill or professionalism on the part of the physician.  Of course, there is case of frivolous lawsuits as well.

Whether a lawsuit against a physician is well-founded or not, it can still cost an incredible amount of time, effort, and money.  While it may help to reevaluate laws regarding malpractice litigation, there are more immediate things that doctors can do to protect themselves, and their personal assets, if a lawsuit is filed.

Traditionally, physicians have attempted to protect their assets by setting up living trusts and even placing their property in another person’s name. Now, however, physicians may find the asset protection vehicle they are looking for in a Family Limited Partnership.

Originally created in the early 20^th century, the Family Limited Partnership was intended to protect family assets and even to provide tax benefits.  It has since evolved into a useful tool for use by physicians who may face lawsuits.

A qualified attorney who is well-versed in the Family Limited Partnership and how it applies here in Northeast Ohio will assist and advise the medical professional on how to set up a structure similar to a family business.  Other individuals in the family can be included as general partners.  Once property is properly placed into this type of partnership, it generally will not be eligible for use to pay off a lawsuit.

It is necessary that the Family Limited Partnership be meticulously planned and worded, which is why it is especially important to work with an attorney who fully understands how to craft the partnership as it pertains to a physician’s family and unique risks.  Choosing an attorney who understands this approach to asset protection and how it affects physicians in the greater Cleveland area provides new options that many doctors have not been afforded before.

If you are a physician interested in protecting yourself and your personal assets from lawsuits, please feel free to give our Independence estate planning and asset protection planning law firm a call at (440)449-3266 and ask to schedule a complimentary Protect My Future Planning Session with the mention of this article.

By using a QPRT, an individual basically places a residence into a trust for his or her children but is still able to live there without paying rent for a certain number of years. The children become the actual owners of the property, but parents are still able to use it as if it were theirs.

Why would an estate planning attorney suggest this? Well, the benefit is that when the parent passes away, the property is not considered a part of the taxable estate. This has a significant impact on the amount of estate and gift taxes that will be owed at that time. For example, because the home isn’t part of the estate, there is no estate tax to pay on it. Likewise, the gift tax is also lessened because the property is considered to be worth less than market value since there is a stipulation that the parents can continue to live there.

While the property is owned by the trust, the parents still retain responsibility for any expenses and upkeep, which also includes real estate taxes. If they choose to make any improvements to the property, this is also their financial responsibility and is considered to be a gift to the trust. If the term of the trust comes to an end, the parents may then need to start paying a fair market rate for rent.

There are some downsides to a qualified personal residence trust, however. If the parent were to die before the term was up, the property will be included in the taxable estate at the fair market value. Additionally, if the property has appreciated considerably in value, the children will face increased capital gains taxes when they choose to sell it.

Using this tool, it’s possible to decrease the taxes paid on your estate while increasing what you are actually able to pass on to your children. The trust can extend beyond one personal residence, as well, to include one vacation home. Your Cleveland, Ohio trust attorney can work with you to determine if your situation is a good fit for the use of a qualified personal residence trust.

As an estate planning attorney, I recommend that all parents in Independence who have children under 18 make planning a priority.  No one wants to consider the idea that they will not be able to raise their kids, but the unforeseen does happen.  By putting a plan into place while you are young and healthy, you can help determine your children’s future, even if you aren’t able to play the role in it that you had hoped.

For example, if you were to die or become somehow incapacitated, who would you choose to care for your child or children?  In many cases, the surviving parent is the obvious choice.  But, considering the fact that the family will be going through a particularly difficult time and that the parental responsibilities will now fall to one person, it may be beneficial to go a step further.  To do this, more Independence families are choosing to create an estate plan that provides for more financial support of both the children and the spouse.  In doing so, that caregiver can be relieved of some of the burden of working and raising the children.

The children may also benefit from psychological counseling.  As a part of the estate plan, some parents set up a strategy for providing therapy for the kids as they deal with the loss of a parent.  This can also be provided for the surviving spouse.

In cases where both parents are killed or where one parent is already absent from the child’s life, setting up a guardianship is a must.  This allows you to determine who in your “village” will be responsible for the continued upbringing of your children.  Your estate plan may offer financial support to this person as well as trusts that the children can access when they reach a certain age.  That said, it is acceptable to place a different person in charge of financial responsibilities.  An estate planning attorney will walk through the options with you in order to find a solution that best fits your situation.

When it comes to finances, it is also a good idea to consider what kinds of restrictions you might want to place on your children’s access to inheritance.  Some parents make access contingent upon certain goals such as age, education, and behavior.  Simply allowing access to a trust when a child reaches 18 may not always be the best approach due to inexperience and pressure from others.

Again, an estate planning attorney is well versed in the options available to parents who wish to plan for their minor children.  Choosing someone in Independence ensures that your estate plan is legal and meets the criteria of the local courts.

One of the biggest factors, of course, is that most people don’t want to consider their own mortality, and estate planning forces you to do just that.  When it comes to adult children, we are just as guilty of not wanting to think about the inevitability of losing our parents, and therefore, we choose not to push them.

There are other complex reasons that come into play as well.  An adult child who wants to encourage his or her parents to set up wills and trusts may worry that the parent or other family members will mistake concern for greed.  If the parent has remarried, then even more complex family dynamics can come into play, with the adult child remaining quiet on the subject rather than creating waves.

Elder law attorneys see these factors and so many more, but we also see the other side of the coin.  When a parent passes away or becomes incapacitated without an estate plan, the fallout can be devastating.  It may fall to the courts to determine who should be given power over medical and/or financial decisions for the parent, and the court’s opinion often does not reflect the wishes of those involved.

Really, having a plan in advance of a tragic event is the best way to ensure it will be handled according to your parents’ desires; and framing the request in this way can be helpful.  At a time in life when they are finding themselves with less and less control, it can be reassuring to know that some of the most important decisions regarding health, money, and property are theirs to make.

In order for this to happen, though, parents need to meet with their elder law attorney while they are still able to make sound decisions.  Again, most people don’t want to think about losing their mental acuity, but it is very common.  Knowing that your parent is able to make decisions with a clear head doesn’t just reassure the family, it also reassures the courts.

Creating wills and trusts and setting up powers of attorney can give your parent the sense of control that they may feel slipping away.  In order to augment this positive association, it can also be helpful to point out that estate planning:

• Allows them to determine who they want to have in charge of their money
• Provides the opportunity to designate who will receive which assets (or none at all)
• Keeps the courts out of the process, saving time, money, and hassle for those left behind
• Ensures that THEIR wishes are the ones that matter
• Minimizes the taxes that will be paid out of the estae

Life is busy, and it’s easy to say that estate planning is something that we’ll get to “later.”  However, any elder law attorney can tell you that “later” doesn’t always come when you think it will.  Instead of leaving the decisions (and potential hassles) in someone else’s hands, empower your parents to have a say in the future both with and without them.

For example, the high divorce rate in the US means that many individuals wish to provide for children from multiple relationships.  Most of the software reviewed by Consumer Reports could not meet the hypothetical clients’ specific wishes when it came to this subject.  In these “blended family” situations, the estate planning tools were too rigid in their options.

A number of other problems were uncovered in this experiment, which is not a big surprise to estate planning lawyers in Independence.  Each family and individual’s situation is highly dependent upon so many factors that it is nearly impossible for a computer program to anticipate them all.  Additionally, engaging with a live person means that there is a capacity for human understanding that the programs simply cannot replicate.

This interpersonal relationship is every bit as important as the documents that are created as a result.  From the lawyer’s extensive education and experience, he or she is able to guide clients into creating documents that are truly relevant to their particular circumstances.  In the world of estate planning, “one size fits all” simply doesn’t work.

One of the biggest problems with online estate planning tools is the fact that they seem to open so many estates up to the probate process.  As a result, families are left waiting for the courts to rule on decisions that the deceased believed had already been made.  Unfortunately, those decisions don’t always reflect the true wishes or spirit of the documents generated through the software.  Just as devastating is that fact that the probate process can be very expensive, thereby decreasing the amount of inheritance that beneficiaries do eventually receive.

It is commendable that so many Independence residents are taking an interest in the estate planning process.  It is an unfortunate reality, however, that using online tools generally won’t be enough to plan for the actuality of your given situation.  Without a doubt, the best and safest approach is to develop a relationship with a trusted estate planning lawyer who can provide the expertise required to truly meet the needs of today’s modern families.

This is actually a very good question and the answer is a bit more complicated than most people realize.

Yes it is true that if you own an asset jointly with rights of survivorship in Ohio, the joint tenant will automatically get the property when you pass—no questions asked.  The passing of the asset will even avoid probate until the final owner of the property dies (note: joint ownership does not stop the probate process, it simply delays it).   It’s also important to note that joint owership is not automatic, and that there still must be an affidavit of survivorship filed with the county recorder even between husband and wife. But in general, there is no need for a will or other estate planning documents to specify what you want done with an asset held in joint tenancy.

Yet here’s where it gets tricky.  What if both owners die at the same time?  This is not unreasonable to assume, especially in the case of married persons, couples or close relatives that spend a lot of time with each other.  In this case, you would need a will to specify who gets the property if both you and the joint tenant pass away simultaneously.  Otherwise a judge who doesn’t know you or your wishes will be forced to make this decision on your family’s behalf according to Ohio probate law.

Or let’s say in the case of a married couple, one spouse dies (we’ll call her Mary) and the asset passes to her surviving spouse/joint owner, John, as intended. In this scenario we’ll also say Mary and John have 3 children who expect to inherit the property once John dies.

However, John falls in love again and adds his new wife, Sally, as a joint owner when he gets remarried.   To everyone’s surprise, when John eventually dies, Sally gets the property free and clear and the children of John and his first wife are left with nothing. I’m sure you wouldn’t want this to happen to your family, yet it happens every day when people blindly rely on joint tenancy to avoid probate.

And besides the numerous other tax and estate planning problems that can occur after the passing of a joint tenant, joint tenancy can also set you up for a number of other unsuspecting headaches down the road.

For example, what if you add someone as a joint tenant and later change your mind? Most people don’t realize that it’s VERY difficult to remove someone’s name from the title at this point.  Not to mention, if your joint tenant is sued or goes through a divorce, the asset you share with him or her is on the line.  This is not a smart position to be in—especially when it affects the place that you live!

I’m also reminded of a case I recently handled for a client who was so concerned about avoiding probate that he added his daughter to his home after his wife passed away.  He learned very quickly that this was a bad decision when he was unable to refinance his home to do renovations on his bathroom because his daughter was fighting with her husband and he wouldn’t give up his dower rights to his father-in-law’s property.  It was a very bad situation for all parties involved.

So instead of relying on joint tenancy to avoid probate or pass your assets free and clear to your spouse or other desired heir, I would advise you to sit down with an attorney to find out exactly how joint tenancy would affect your family when you pass.  The decision may have consequences you never intended and may ultimately disinherit your loved ones or cause major legal problems down the road.

Not necessarily. Even if you are single and/or have no children, a Northeast Ohio wills and estates lawyer should still be in your plans. Why? Because estate planning is really about YOU.

While it is absolutely advisable for married people or those with children to work with a wills and trusts lawyer, it is actually just as important for single adults, as well.

In fact, there are times when it’s almost more important for singletons. After all, when a married person suffers a major illness, it’s usually pretty clear who will take on medical and financial responsibility. The water gets a bit murkier for unmarried individuals.

If you were to suddenly become incapacitated, who would make your medical decisions for you? If you haven’t worked with an estate planning attorney, the answer to this question becomes quite complicated. Possibly your parents would be called in to determine how your medical care should proceed. Maybe it would be a sibling. Most likely, it would not be your best friend or your significant other or whomever you would choose. Even if your parent or sibling would be your first choice, that doesn’t mean that the courts would agree without having your express wishes legally documented.

And what about your finances? If you are unable to take care of your finances for a period of time, who do you think will do so? The answer to that is: whomever the courts say. Again, it could be a parent, a sibling, some other relative, or even a court-appointed individual.

Finally, what will become of your things if you should unexpectedly pass away? Who would have legal rights to your belongings, to your home, to your pets? You may think you know the answers, but without clearly outlining your wishes with a Independence wills and trusts attorney, you have very little control over the matter.

A single adult without children does not need to worry about creating guardianships and trusts to provide for his or her offspring, but it’s certainly a good idea to look out for yourself. Some of the basic legal documents any single person should have include:

• A will to determine what will become of your assets in the event of your death.
• A power of attorney for healthcare (or Advance Health Care Directive) to name the person you want making medical decisions on your behalf.
• A living will to clearly explain your wishes regarding medical procedures and life support.
• A power of attorney for financial matters to name the person you feel should be responsible for your money if you are incapacitated.
• A revocable living trust to centralize management of assets if you become incapacitated and keep your assets out of probate if you should pass away.

These five documents are crucial in ensuring that your wishes are met and that you have control over your future. A wills and trusts attorney in Northeast Ohio can easily get you on the path to having these affairs in order.

…to be informed, tought, and guided through some of the issues you may have had, or may see in the future, with Estate Planning, Medicaid Planning, Veteran Benefits, Probate Issues, Asset Protection, & Business Planning.

To listen to the full archive our the Planning for your Future Radio Show, click here.