Probate–Why and How to Avoid

by Dan McCarthy | Jan 22, 2021 | Uncategorized

Many clients I talk to know that they want to avoid probate but they are usually not sure exactly why. Probate is the legal process to administer assets owned by someone who has died, to see that claims and expenses are paid, and to see that the remaining assets are distributed to those entitled to receive it either through a Last Will or under the Ohio Revised Code. To clear up a common misperception, there is nothing inherently wrong with probate. There are several important reasons why avoiding probate, to the greatest extent possible, is advisable in many cases:

• Money Opening an estate in probate court requires a filing fee and usually requires an attorney. Additional experts, such as appraisers, are often required.
• Time Depending on the complexity of the estate and the amount (and type) of assets, the probate process can often take 6-9 months to complete. Or even longer.
• Privacy Court filings, including probate court records, are public records. Probate requires filing a detailed inventory of assets and later, a full accounting of who gets what, when, and how. In Hamilton County, Ohio, the records are mostly available on the Court’s website (see https://www.probatect.org/court-records/court-record-search). Again, there is nothing inherently wrong with this, but I find most clients prefer to keep their affairs private when possible.

HOW TO AVOID PROBATE

The next issue is then how to avoid probate. There is no one size fits all solution. Each family has unique issues and needs. Some of the options include:

• Living Trust A revocable living trust is a legal entity that owns the assets of the creator (called the grantor). The grantor names a trustee to control the assets that will go to the beneficiaries. A trust is a private entity that includes specific instructions on how to distribute the trust’s assets and avoids probate on all trust assets. For more information on the differences between a trust and a will, see https://danmccarthylaw.com/2017-12-6-understanding-the-difference-between-a-will-and-a-living-trust/
• Jointly Owned Assets Assets owned with another who have the right of survivorship pass automatically and are not subject to probate. For example, if a married couple jointly own a home, upon the death of the first spouse, the survivor becomes the sole owner by right of survivorship. Note that simply adding heirs, including children, to your assets is generally not advised for tax, liability, and numerous other reasons.
• Transfer on Death (TOD) It is possible to transfer certain assets, including real estate and vehicles, by completing transfer on death designations. If done properly, those assets with a TOD can pass by that designation outside of probate.
• Payable on Death (POD) Similar to a TOD, POD bank accounts and certain assets can list a beneficiary to receive that particular asset upon death.
• Beneficiary Designations Other assets, such as life insurance, pass by beneficiary designation, not by probate.

An estate plan is much more than a simple will. In order to properly plan for your family, you must coordinate your assets and your documents. I can help ensure that you have the necessary documents to avoid probate where possible and will help provide peace of mind. Please call, text, or email to get started today.

Should your Child’s Guardian and Trustee Be the Same Person?

by Dan McCarthy | Jan 11, 2021 | Uncategorized

If you have minor children, selecting who will ultimately be in charge of your children if the need arises is perhaps the most important question to answer in estate planning.

While there is no substitute for you as a parent, a guardian is someone who steps in if neither parent is available, assuming the parental role and raising the child until 18.

A trustee, on the other hand, is in charge of managing the financial affairs for the child.

Who Makes a Good Guardian?

When choosing a guardian, the top factor to consider is who is the best person that will love and raise your child in a manner that you would. This includes parenting style, location, religious beliefs, interest in extracurricular activities, energy level, and whether or not he or she has children already. A guardian will provide day-to-day love, care, and support for your child.

Who Makes a Good Trustee?

As the name implies, when choosing a trustee, the most important considerations is that he or she is great with finances and trustworthy. Specifically, the trustee must be able to manage the funds in accordance with your intent and instructions that are left in the child’s trust. Consider whether he or she will honor your wishes. In short, you want to choose a trustee who will act in your minor child’s best interest within the limits you have set forth in your estate plan documents.

So Should the Same Person Serve In Both Roles?

It is not necessarily a bad idea to have both the guardian and trustee be the same person. However, if you wish to provide more checks and balances over the money you leave to your child, having a different person serve in each role may be preferred. If the guardian and trustee are separated, when the guardian needs trust money to pay for your child’s various expenses, the guardian will have to ask the trustee for those funds and the trustee will either allow or disallow the expense based on the trust terms. If the same person is serving in both roles, obviously you don’t get that benefit. Maybe this concerns you; maybe it doesn’t.

Also, if you choose two different people for the role of guardian and trustee, make sure to consider how the two get along as they will likely have to work together throughout your minor’s childhood and possibly into adulthood. Using a different guardian from the trustee will require cooperation with a common goal of doing right by the child while complying with your instructions in your estate plan.

Seek Help to Make Your Decision

While estate planning can be daunting, it does not have to be.  Contact a knowledgeable estate planning attorney to help guide you through this process. We can explain your options and advise you on the best plan that will follow your wishes while at the same time meeting your family’s needs. I strive to make the process as painless and seamless as possible.

Contact McCarthy Law Office to get started on your estate plan today!

End of Year Estate Planning Goals

by Dan McCarthy | Nov 30, 2020 | Uncategorized

As the calendar turns to December, the end of 2020 is in sight. Finally. As we prepare for the holidays and a new (and hopefully healthier) year, here are some things that should be on your end of year checklist:

• Complete your estate plan. The end of the calendar year can serve as a great deadline and motivator to end procrastination and complete the long-planned but never completed estate plan. Do not let the fear of making wrong decisions stop you. Documents can always be amended or revised if your life situation or desires chance.
• Review and update your current estate plan. If you already have an estate plan, is it up to date? Family, personal, and financial circumstances change throughout your lifetime. Major life changes, such as marriage, divorce, births, deaths, moving to a new state, or new wealth are just some examples of events that should trigger a reevaluation of your estate plan.
• Check your beneficiary designations. Certain assets pass through beneficiary designations, not through your will. Beneficiary designations are the most common way that life insurance policies, annuities, retirement accounts (IRAs, 401(k) plans, Roth IRAs) pass to your heirs. You should periodically review your various beneficiary designations to ensure everything is current.
• Secure health care documents. This year, more than any other in modern times, has reinforced the importance of having advanced directives, such as a health care power of attorney and a living will. If you become ill, these documents allow your agent to make and communicate medical decisions on your behalf.
• Review guardian selections for minor children. As your children age, you may want to change who you have selected to serve as guardian. You should review and revisit that life changes have not changed who you believe is best suited to care for your children if necessary. If you have not named a guardian who is able and willing to serve as guardian, this could be a decision left to the probate court.
• Review your insurance needs. It is important to ensure that your family is protected. Do you have sufficient life insurance to care for your family if necessary? For auto and home insurance, do you have sufficient coverage in the event of a serious car accident? Or a disaster at home?
• Talk to your agents/guardians/family. You do not need to share the specifics about your estate plan. You do not need to share your bank and financial statements. But it is a good idea to have a conversation in general terms about your plans and why you have planned the way that you have, especially as your children age and mature.
• Get documents for unmarried children over age 18. Your unmarried children over age 18, especially college students, should have, at a minimum, health care documents such as a health care power of attorney and a living will. It is also wise to draft a simple will for your children over age 18.
• Call or email McCarthy Law Office. The end of the year and getting ready for the holidays is stressful. We can help make the estate planning process as painless as possible and scratch this very important task off of your to-do list.

Estate Planning for Families

by Dan McCarthy | Jul 28, 2020 | Uncategorized

Who needs a will?  In short, anyone with either property or kids.  I have talked to many people who have the best of intentions of finally drafting a will.  But it is very easy to put off drafting a will until tomorrow.  Tomorrow becomes next week, which becomes next month, which becomes next year.  A proper estate plan is essential for families, particularly for parents with minor children.   A will is not the only document necessary.  A short summary of documents necessary for most families is below.  Please note that there is no one size fits all document.  I encourage you to call me to tailor a complete estate plan to meet your individual needs. 

When I meet with parents with minor children, I typically recommend the following documents:

LAST WILL AND TESTAMENT: a will directs the distribution of probate assets upon death.  A will also identifies who you want to serve as the executor of the estate.  Parents also can identify who they want to serve as guardians of their minor children if something happens to both parents.  This is probably the most important reason for parents with young children to execute a will.  The probate court will ultimately appoint a guardian for children if both parents pass away, but parents should clearly identify who they want to care for their children in the event a guardian becomes necessary.

REVOCABLE LIVING TRUST: a living trust is a very useful device to manage property.  Trusts can be intimidating.  But the basics are not complicated.  In a trust, the owner (grantor) transfers property to a trustee.  The trustee manages the property for someone identified as a beneficiary.  Property placed into a revocable trust is generally not subject to the probate process.  Parents can also instruct that assets be distributed to their kids at staggered times.  Under the Uniform Transfers to Minors Act, in Ohio, children can receive assets once they reach age 21.  But in a trust, a parent can pass part of their assets once the children obtain specific ages, such as 1/3 at age 21, 1/3 at age 25, and the remainder at age 30.  But trusts are also very flexible and can be drafted to suit your needs and wishes.  

LIVING WILL AND HEALTH CARE POWER OF ATTORNEY: a living will allows the signer to state their intentions regarding withholding or withdrawal of life-sustaining medical treatment, including CPR, when they are no longer competent to make informed medical decisions.  A living will becomes the way a person communicates their wishes when the patient is in a terminal condition and can no longer make informed decisions.

The health care power of attorney designates an attorney in fact to make health care decisions when the patient is unable to communicate his or her wishes.  The attorney in fact generally has the authority to give informed consent, refuse to give informed consent, and to withdraw informed consent for any medical treatment.

DURABLE POWER OF ATTORNEY: this document is intended to cover your financial matters in the event you cannot handle them yourself.  A durable power of attorney helps the management of a person’s affairs during periods of incompetence without the necessity of seeking an order from the Probate Court.  

Contact McCarthy Law Office for a free initial consultation about your estate planning needs. Whether you have an existing estate plan that you have not looked at in years or if you have never created a Will of any sort, I will review the proper documents and make the process as painless as possible.

Family Estate Planning in Cincinnati, Ohio

Total Car Accidents Down in Ohio, but Deaths Rise?

by Dan McCarthy | Jul 27, 2020 | Uncategorized

According to this article on cincinnati.com, the total number of car crashes in Ohio is down about 25% in 2020. This is largely due to reduced driving during the pandemic. https://www.cincinnati.com/story/news/2020/07/26/coronavirus-ohio-despite-less-traffic-fatal-crashes-higher-than-2019/5427913002/ However, the number of deaths caused by car crashes is actually up. The expected reason: increased speed. Please slow down.

Even if you are hit by an uninsured driver, you may have coverage through your own car insurance policy. Please contact me if you or a loved one is in a car accident. McCarthy Law Office can help you recover for your injuries and damages.