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Earlier in the year, we provided a post about Transfer on Death (“TOD”) Affidavits. Today, we wanted to touch on a particular type of TOD Affidavit for an asset that is often overlooked. For many, a car is one of the most valuable assets that they own. Often the only time we look at our car title is when we are at the dealership either buying or selling that vehicle. However, if you pass with the title to the vehicle still solely in your name, it is going to have to go through probate.
Probate is a legal proceeding where the validity of a will is established, and an "Executor" is appointed to manage the estate. This includes resolving claims from creditors and distributing assets in accordance with the will. If a person dies without a will, the court appoints an “Administrator" to perform a similar function, without the added benefit of the will's provisions to determine who gets what. The State of Ohio makes that determination for you. In order to avoid your vehicle having to go through probate, a simple but effective mechanism is to create and file a TOD Affidavit with the Ohio Bureau of Motor Vehicles. Using this affidavit, you can designate a beneficiary of your motor vehicle (also, your watercraft or outboard motor) then when you pass, your named beneficiary has the ability to transfer ownership without going to court. To discuss creating a TOD Affidavit, contact Jesse Bowman at AWK Legal (513-228-1100). This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney. In numerous posts, we have highlighted different estate planning documents and other mechanisms to create a plan for when you pass. However, an equally important question is what happens when someone passes without creating an estate plan, or in this post, without a will. When this happens, and dependent upon whether you have probate assets (assets you own individually at the time of your death), an intestate estate may need to be opened.
An intestate estate is administered in probate court in accordance with the laws of the State of Ohio and your assets are distributed in accordance with Ohio Revised Code 2105.06 (Statute of Descent and Distribution). Please note that instead of you deciding who gets what, the State of Ohio has already decided this for you. Depending upon your wishes, this may lead to unintended consequences. For detailed information on what happens if you pass without a will, please visit this link to this Ohio State Bar Association’s Law Facts article. This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney. For further information, please contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513) 228-1100 or [email protected]. An effective estate planning tool is the Transfer on Death Designation Affidavit (“TOD Affidavit”). If you own real estate, you can use a TOD Affidavit to name who or whom you want your property to go to upon your death. There are several benefits to using a TOD Affidavit:
This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney. For further information, please contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513) 228-1100 or [email protected]. This Ohio State Bar Association article (available at Law You Can Use) is worth a read because it discusses the legal implications of creating a joint bank account. While joint accounts and the survivorship feature (ownership of the account automatically passes to the other owner(s) upon death) are often intended, this could be also an unintended consequence for many. Effective estate planning highlights such issues to allow you to make an informed decision so that your assets and accounts go to who you intend.
For further information about estate planning, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100). Our office is a full-service law firm located in Mason, Ohio. A few of the cities we serve are Mason, Lebanon, Cincinnati, West Chester, Dayton, Middletown, Hamilton, Springboro, Franklin and Kettering. This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney. In Parts 1 and 2 of our series we covered nominating a guardian to care for your children and how to appoint a person to manage your estate. In Part 3, we will address the benefits of a trust. Many young families do not think that estate planning is necessary because they feel that they lack assets to justify creating a plan. This is not true for several reasons, especially if the parents have purchased life insurance. Life insurance policies are distributed in accordance with the policy’s beneficiary designation. Many parents list their spouse as the primary beneficiary and their children as the contingent beneficiaries; however, this can lead to unintended consequences.
For example, John and Jane are married and both have life insurance policies. Both policies list each other as the primary beneficiary, and their two minor children, Rusty and Griswold, as the contingent beneficiaries. John dies in a car accident, so his policy is paid to Jane. Three years later, Jane dies. Rusty and Griswold, still minors, are the beneficiaries under Jane’s policy. Here, we have a problem. Under Ohio law, minors cannot inherit property in their own name. Instead, a probate court will need to appoint a guardian in order to manage Rusty and Griswold’s inheritance, including the life insurance proceeds. This can lead to costly court proceedings and court oversight of how this money is spent until both children reach 18 years of age. To add to this problem, once Rusty and Griswold reach age 18, the remaining funds will then be distributed to them. This can lead to an array of issues with a young adult receiving a windfall right after high school. A way to avoid all of this is to create a trust and designate the trust as the beneficiary of the life insurance policies. A trust avoids costly probate court proceedings and allows the parents to name a trustee and create provisions for him or her to make payments on behalf of the children for such things as health, education, and support. Such distributions generally do not involve court oversight. As an added benefit, a trust can space out lump sum payments after the children reach 18 years of age. For example: instead of each child receiving a windfall right out of high school, parents can designate distributions of 25% at age 21; 25% at age 25; 50% at age 30; or, however the parent sees fit. For further information about creating a trust for your family, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100). Our office is a full-service law firm located in Mason, Ohio. A few of the cities we serve are Mason, Lebanon, Cincinnati, West Chester, Dayton, Middletown, Hamilton, Springboro, Franklin and Kettering. This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney. In Part 1 of this series, we addressed how a will allows you to nominate a guardian to care for your children when you pass. In Part 2, we will address how a will allows you to appoint a person to manage your estate. Before we begin, it is necessary to explain what probate is and how it works.
Upon death, a probate estate is then opened for the deceased (this person is referred to as the "Decedent"). Probate is a legal proceeding where the validity of the will is established, and an "Executor" is appointed to manage the estate. This includes closing bank accounts, resolving claims from creditors, and distributing the Decedent's assets in accordance with the will. If a person dies without a will, the court appoints an "Administrator" to perform a similar function. The key difference is that a will allows you to name an Executor and you make the decision as to who will be responsible for managing your probate estate. Without a will, the court will appoint this person and he or she might not be who you want to handle your affairs. Depending upon your family situation, multiple people could petition the court to take on this responsibility, and ultimately the court will have the final say. For further information about naming an Executor in your will, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100). Our office is a full-service law firm located in Mason, Ohio. A few of the cities we serve are Mason, Lebanon, Cincinnati, West Chester, Dayton, Middletown, Hamilton, Springboro, Franklin and Kettering. This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney. A common misconception is that estate planning is only for older retirees that have accumulated wealth over many years. While retirees need estate planning, young families do too. To provide an overview for young families for why estate planning is essential, AWK Legal has created this series to explain how a few simple steps can provide you peace of mind and assure that your family is taken care of when you pass. In this series, Part 1 addresses nominating a guardian in a will for minor children.
A discussion that many parents have, and should have, is who will take care of their children if both parents are no longer around. This is not an easy decision and there are a number of factors that all parents need to consider when naming a guardian; such as, where does the potential guardian live? Will they raise the child with similar religious and moral beliefs and convictions as us? What is their financial situation? What is their lifestyle? Are they willing to take on this role? Once the parents have deliberated on these points, the hard part is over. The next simple step is to nominate this person in their wills. If both parents unexpectedly pass, guardianship proceedings will take place in probate court. During the proceedings, the probate court will give priority to the person nominated to serve as the guardian. Ultimately the probate court has the final say on the appointment and will examine the best interests of the children, but this individual will have priority and can help alleviate family disputes because the parents have articulated who they desire to care for the children. For further information of nominating a guardian in your will, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100). This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney. Effective estate planning is more than creating a will. As part of the process, it is essential to examine beneficiary designations on accounts such as life insurance policies and retirement accounts. Generally, these beneficiary designations will override any provisions in a will or a trust.
For example, John married Jane twenty years ago when John first started working at BigCorp where he opted into a generous employer sponsored retirement plan. Jane was named as the sole beneficiary of John’s retirement. After fifteen years, John and Jane divorced. John later married Joanna and created a will that named Joanna as the sole beneficiary of all of his assets. However, John forgot to update his retirement plan’s beneficiary designation. Upon John’s death, the retirement account’s beneficiary designation overrode his will and the proceeds were distributed to Jane and not John’s intended beneficiary, his second wife Joanna. Unless Joanna can convince Jane to send her the proceeds, Jane is going to have to go to court and pursue potentially costly litigation to fight this distribution. A simple change of beneficiary form was all that was needed to avoid this situation. When creating an estate plan, these types of issues need to be examined. To discuss an estate plan to ensure that your assets go to who you intend, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100). This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney Computers and smart phones play a critical role in most of our lives. Many of us have a tremendous amount of accounts and assets on these devices such as credit cards, bank accounts, social media, email, and photos. Collectively, all of these things are commonly referred to as "digital assets." With digital assets, an important issue to consider is what will happen to all of these things when you die. The answer is that without proper estate planning, the people intended to have access will have great difficulty, if not completely blocked access. There is a simple solution to this problem courtesy of a recently enacted Ohio law.
In 2017, Ohio enacted House Bill 432 which included the Ohio Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). Under RUFADAA, it is now possible to give your executor the authority to access and distribute your digital assets just like any other tangible property, such as cars, houses, or artwork. Due to privacy acts, many of these assets might be lost forever without proper planning. To discuss an estate plan that incorporates all of your property, including digital assets, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100). This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney The best definition that I have found for a trust is from the Ohio State Bar Association: “a trust exists when one person gives property to another person (called the trustee) to hold and manage for one or more other persons (called the beneficiaries).” Although there are many different types of trusts, the most common, and what people generally obtain from estate planning, is the Revocable (“Living”) Trust. A Living Trust is one that can be changed or revoked during the lifetime of the person(s) that created the trust. It is common for the person that created the trust to also be the trustee until his or her death.
Although there are many benefits to having a Living Trust, a common benefit that you frequently hear about is that it helps avoid probate. This is true. Probate deals with property that the deceased (“decedent”) owns personally, in his or her name, upon their death. When you create a Living Trust, the asset is re-titled into the name of the trust, so the trustee “owns” the property. Therefore, upon death, probate is avoided because the decedent does not own the property personally in his or her name. For example, John Doe creates a Living Trust and wants to put his house into it to avoid probate. He does this by re-titling the house into the name of the trust. As trustee, he can sell or give away the property during his lifetime. Upon his death, because the house is in the trust, John Doe does not own the property in his name. Thus, no need to probate the house. John’s family avoids the time and expense to transfer the house through the probate court. Despite common, hard sells by some attorneys, Living Trusts are not for everyone and there are probate avoidance techniques that can be equally effective. These techniques should be part of the conversation. To discuss whether a trust is right for you, contact Jesse Bowman at the law office of Alexander, Wagner & Kinman (513-228-1100). This information is intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney |
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Attorneys Jesse Bowman; Max Kinman; Chris Alexander: David Wagner Archives
February 2020
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