Recap: Navigating an Estate Plan in the New Year

On December 4, 2013, I was given the opportunity to speak at Fisher-Titus Medical Center to a small group of attendees on various estate planning topics. For those readers not in attendance, below is a brief recap of that presentation:

1. Overview of the Probate Process. The term “probate” refers mostly to the formal court process by which assets are transferred from one generation to the next. In many cases, clients wish to avoid the oversight of the probate court and accomplish the transition of assets from one generation to the next in a more efficient manner. For those clients, we sometimes utilize POD/TOD designations, LLC planning and/or trust planning. Depending upon the goals of the particular client and his or her family, a strategy can often be implemented that will avoid the formality of the probate process and create a better overall result for the family.

2. Joint Unified Trusts.  For those clients planning for federal estate tax minimization, 2 trusts (one for each spouse) are frequently required. However, now that the Ohio estate tax has been repealed, clients planning with trusts, but who are not concerned with federal estate tax issues due to the increased exemptions, can make use of a joint trust in which both spouses create the trust together and both spouses act as trustees together during the life of the spouses, with the surviving spouse taking over as trustee after the first death. There are other features of this type of trust that can be tailored to the particular client’s needs to add maximum flexibility and efficiency for the family.

3. Planning for the Personal Residence (from a Medicaid perspective). Clients are often concerned about the aspect of the Medicaid program that would permit the Ohio attorney general to pursue estate recovery procedures against the personal residence. Any property that is owned by an individual while he or she is receiving Medicaid benefits for long-term care could be subject to an estate recovery lien. Thus, as between spouses, it sometimes makes sense to transfer the residence to the healthy spouse immediatly before the unhealthy spouse begins receiving Medicaid benefits and residing in the nursing home. However, with the reporting requirements for estates and even for TOD transfers, the Ohio attorney general will be notified when that house eventually transfers to the next generation upon the death of the erstwhile healthy spouse. Therefore, it perhaps makes sense to explore other planning options for the surviving spouse if he/she still owns the residence after the death of the spouse receiving Medicaid benefits.

4. Financial Durable Powers of Attorney. A financial durable power of attorney can be a great tool for an individual to have in place, but is sometimes overlooked. This document can permit another family member or trusted individual to undertake financial, property or other similar transactions on behalf of the client. There are different types of financial durable powers of attorney, some of which work better than others, but, in any event, for those clients wanting to ensure that their affairs are efficiently handled if they’re too sick to do it themselves, this document can be key to getting that done. However, it’s also important to remember that the authority under the financial durable power of attorney expires at death, meaning, a trustee or executor will have to pick up the reigns from there.

As usual, the Fisher-Titus Foundation deserves a warm thank you for hosting the event and ensuring that everything would go off without a hitch.

Mark Coriell

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