Archive for the ‘Estate Planning & Probate’ Category
February 2, 2012
For the executor or administrator of an estate, the probate process can be very confusing. There are a plethora of court forms, duties and responsibilities. To attempt to educate yourself can not only be a headache for the executor or administrator but can also cost the estate both time and money.
Beyond the required forms and deadlines, there are simple facts about estate administration that many executor and administrators are not aware of. For example, there are limits on creditor claims. See http://www.randallperla.com/blog/having-a-knowledgeable-probate-attorney-handle-your-loved-ones-estate-could-save-you-a-lot-of-money/ Moreover, if the estate has insufficient funds to distribute to heirs, there is a specific order in which all heirs must be paid. Money must be preserved in order to pay fiduciary fees, your compensation for all of your hard work. Failure to preserve these resources means you are cheating yourself out of your rightful compensation. You have a right to recoup estate expenses. In order to calculate fiduciary fees, you must have the correct values for all probate and non-probate assets. You must also have these values to determine whether Ohio estate tax is due as well. You must keep appropriate records and preferably conduct all estate transactions out of an estate checking account, as the Court will require a full accounting of all estate transactions.
Beyond the sampling above, probably the most important thing an executor or administrator of an estate needs to know but most unfortunately do not is that ATTORNEY FEES ARE PAID FROM THE ESTATE. I’m putting emphasis on this statement because sadly far too many people make the mistake of going it alone because they think that help will cost them out of pocket, when it does not. Most executors and administrator are grieving family members, not law professionals. However, the responsibilities and liabilities are the same. Do yourself a favor and consider hiring an estate administration attorney to guide you through the process.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
Cleveland Estate Planning Attorney; Cleveland Last Will and Testament Attorney; Cleveland Financial Power of Attorney; Cleveland Health Care Power of Attorney; Cleveland Living Trust Attorney; Probate Administration; Probate Litigation; Trusts and Estates; Contested Trusts and Estates; Decedents Estates; Estate Administration; Estate Litigation; Estate Planning for the Elderly; Estate Planning for Unmarried Couples; Estate Settlements; Family Trusts; Fiduciary Law; Fiduciary Liability; Fiduciary Litigation; Financial Planning; Living Trusts; Personal Planning; Powers of Attorney; Trust Administration; Trust Law; Trust Litigation; Trust Planning; Adult Guardianship; Advance Directives; Conservatorship; Elder Guardianship; Guardianship; Guardianship Administration; Incompetency Proceedings.
February 2, 2012
The scenario is all too common. One child is named the agent (attorney in fact) in Mom or Dad’s Power of Attorney, and uses it to make poor financial decisions on the parent’s behalf or worse, transfers assets into his own name. What can be done?
A power of attorney typically gives the agent (attorney in fact) the power to perform any financial transactions that the principal (the person giving the powers) can perform. That is, the agent can usually open and close bank accounts, withdraw funds, buy and sell stocks, etc.
However, this power is not absolute. The agent in confined by the terms of the power of attorney. For example, the agent cannot give him or herself gifts without express authority in the power of attorney. Hence, transferring any property into the agent’s name or establishing a beneficiary designation in the agent’s name would be considered a gift and would not be permitted absent express authority.
Moreover, an agent has certain fiduciary responsibilities. He must act with loyalty and honesty to the principal. So what can be done when the agent violates his duty of loyalty and honesty? If the principal is competent, then he or she has the right to revoke the power of attorney. Hence, a concerned party should speak to the principal to voice concerns and try to convince the principal to revoke the power of attorney and if necessary, appoint a trustworthy and responsible replacement. All financial institutions as well as the current agent should be notified of the revocation as soon as possible. If the principal is incompetent, a guardianship will need to be established in probate court so that another individual can be appointed to manage the principal’s affairs.
If assets were taken by the power of attorney, a guardian will have the power to recoup wrongfully taken assets through a probate procedure. Moreover, once the estate is opened for the principal, any person interested in the estate can file a complaint with probate court against the agent in order to have funds returned to the estate. Any self-dealing transactions conducted by an agent, like transferring property into the agent’s name, is presumptively invalid absent express authority in the power of attorney to make gifts to the agent.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
Cleveland Estate Planning Attorney; Cleveland Last Will and Testament Attorney; Cleveland Financial Power of Attorney; Cleveland Health Care Power of Attorney; Cleveland Living Trust Attorney; Probate Administration; Probate Litigation; Trusts and Estates; Contested Trusts and Estates; Decedents Estates; Estate Administration; Estate Litigation; Estate Planning for the Elderly; Estate Planning for Unmarried Couples; Estate Settlements; Family Trusts; Fiduciary Law; Fiduciary Liability; Fiduciary Litigation; Financial Planning; Living Trusts; Personal Planning; Powers of Attorney; Trust Administration; Trust Law; Trust Litigation; Trust Planning; Adult Guardianship; Advance Directives; Conservatorship; Elder Guardianship; Guardianship; Guardianship Administration; Incompetency Proceedings.
November 21, 2011
A living trust, also known as a revocable trust or a family trust, is a trust you establish during your lifetime. Most people establish living trusts with several goals in mind, setting forth how they wish their assets to be distributed upon death and avoiding probate. What many attorneys forget to make clear to their clients, however, is that a Living Trust can only do its job if it is funded.
What does it mean to fund a trust? Funding is the process of transferring the ownership of your property or changing the beneficiary designations on your property into the name of your trust. Unless your trust owns your property, it cannot distribute your property to the people and organizations that you named in your trust. Failure to transfer your property into your trust during your lifetime may mean that the people you intend to have the property never get it. For example, beneficiary designations which are not changed to the name of the trust will allow the property to be distributed directly to the beneficiary named and will not be subject to your trust. Other assets which are not transferred to your trust during your lifetime may eventually be transferred to your trust upon death via a pour-over will that your attorney likely prepared for you, but the property will have to go through the delays and expense of the probate process, defeating one of the main reasons why you likely had a trust drafted for you in the first place.
You may be wondering at this point how you literally change the ownership of your property. First, you need to determine what the legal name of your trust is. It is usually written on the first page of your trust. Questions should be directed to the attorney who drafted your trust.
Different financial institutions will have different procedures. Some banks may try to charge a penalty or impose a loss of interest. You should inquire about these potential issues before the transfer.
If is also important to know when to change the ownership name and when to change the beneficiary designation of property. For example, with life insurance and annuities you will change the primary beneficiary to your trust. On the other hand, with stocks, bonds and other securities you will need to change the ownership into your trust. With IRAs and other deferred accounts, there is a debate about whether it is better to name the trust as primary beneficiary or secondary after a loved one. You should speak to a financial planner about which decision is best. However, never change the ownership of a tax deferred account to your trust as it may trigger serious tax consequences.
You may need to notify parties ahead of transfers. If you have a mortgage on your real estate, you should check with your mortgage company before you deed the property into your trust and notify your home owners insurance.
You may want to wait to transfer ownership to avoid additional costs. New license tags may be necessary for vehicles you transfer into your trust. Hence, you may want to wait to re-register your vehicle until your tags are due to expire.
Questions about funding your living trust should be directed to the attorney who drafted the document or another local attorney with estate planning knowledge.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
Cleveland Estate Planning Attorney; Cleveland Last Will and Testament Attorney; Cleveland Financial Power of Attorney; Cleveland Health Care Power of Attorney; Cleveland Living Trust Attorney; Probate Administration; Probate Litigation; Trusts and Estates; Contested Trusts and Estates; Decedents Estates; Estate Administration; Estate Litigation; Estate Planning for the Elderly; Estate Planning for Unmarried Couples; Estate Settlements; Family Trusts; Fiduciary Law; Fiduciary Liability; Fiduciary Litigation; Financial Planning; Living Trusts; Personal Planning; Powers of Attorney; Trust Administration; Trust Law; Trust Litigation; Trust Planning; Adult Guardianship; Advance Directives; Conservatorship; Elder Guardianship; Guardianship; Guardianship Administration; Incompetency Proceedings.
September 14, 2011
Often people come to our office seeking a basic estate plan. While there is no such thing as one size fits all in estate planning, there are basic documents that everyone should consider.
Last Will and Testament-
As discussed in the previous post, http://www.randallperla.com/blog/the-4-major-pitfalls-of-not-having-a-will/ failing to execute a valid will has a number of draw backs. Wills give you the opportunity to set out who will inherit your estate. Without a valid Will, your estate will be distributed according to Ohio law rather than your wishes. A valid Will also gives you the opportunity to appoint someone you trust to administer your estate, called an Executor. Without this appointment, the court will appoint someone of the Court’s choosing instead, called an Administrator. There are a number of advantages of having an Executor rather than an Administrator. See http://www.randallperla.com/blog/the-4-major-pitfalls-of-not-having-a-will/ for more information. In addition, if you have children under the age of 18, a Will gives you the opportunity to appoint a guardian for your children. If you have children under the age of 18, please see http://www.randallperla.com/blog/the-basic-estate-plan-that-every-parent-should-have/ for issues to consider before drafting an estate plan.
A Will can be as simple or complicated as you wish. Many people simply want to give everything they own to their spouse, or if their spouse predeceases them, their children. But this does not have to be the case. You can establish a testamentary trust, for instance, where an inheritance will be kept in trust for your children until they turn a specific age. For example, 50% when your son turns age 25 and 50% when your son turns age 30. This is typically done if you have concerns over your child’s ability to handle money responsibly. A Will can also list specific items that you want given to different people. For example, my antique gold watch to my son and my diamond engagement ring to my daughter. The language of a Will can be drafted to suit your particular needs. It is important to know, however, that a Will only governs probate property. For example, a bank account with a POD or a joint account will be distributed based upon the POD designation or to the other joint owner automatically upon death, not according to a Will. See http://www.randallperla.com/blog/what-is-probate-property-and-why-do-i-need-it-for-my-will-to-operate/ for more information.
Durable Financial Power of Attorney
A Financial Power of Attorney gives an individual of your choice the authority to make financial decisions and perform transactions on your behalf. A Durable Financial Power of Attorney stays in effect in the event of your incapacity. You should consider executing a Durable Financial Power of Attorney if you have difficulty managing your own affairs, due to a health condition or aging or you anticipate having difficulty in the near future. The Power of Attorney can go into effect immediately or it can be a Springing Power of Attorney, which “springs” into effect upon the occurrence of a chosen event. This can be your incapacity as certified by physicians or particular family members or friends, or another triggering event of your choice. Failure to execute a Durable Financial Power of Attorney could necessitate the need for a guardianship. A guardianship is a lengthy proceeding in Probate Court that, if possible, is best avoided.
Health Care Power of Attorney
Much like the Durable Financial Power of Attorney mentioned above, a Health Care Power of Attorney gives a person of your choice the authority to make health care decisions for you. However, unlike the Durable Power of Attorney which can go into effect immediately, the Health Care Power of Attorney only goes into effect if you are unable to make decisions for yourself, because you have become incapacitated or are in surgery, etc. You should consider executing a Health Care Power of Attorney if you have significant health problems, are elderly or anticipate having any kind of a serious medical procedure. A Health Care Power of Attorney can also give you the opportunity to make your wishes known concerning end of life decisions. Failure to execute a Health Care Power of Attorney could necessitate the need for a guardianship. As stated, a guardianship is a lengthy proceeding in Probate Court that, if possible, is best avoided.
Living Trust
A living trust is a revocable trust, meaning that you retain control over the trust and all the trust assets during your lifetime. You can terminate or change the trust at any time, including moving assets in and out of the trust. A living trust has a number of benefits. First and foremost, it can help your heirs by eliminating the expense and time of probate. It also allows you to consolidate and manage your assets in one coherent bundle. Moreover, if you wish to control the distribution of your assets after death, it is an essential tool. For example, you can delay distribution to a child if you are concerned over his ability to manage money responsibly or if he is simply too young to receive a lump sum. You can also leave distributions of trust assets up to the judgment of a trusted person called a Trustee if you are unsure what the needs of your beneficiaries will be in the future, if you are concerned over potential creditors of a beneficiary or a greedy spouse of a beneficiary, for example. The terms of a Trust can be drafted to suit your particular needs.
For more information on Last Will and Testament, Financial Power of Attorney, Health Care Power of Attorney, Living Trust or Estate Planning in general, seek out an Estate Planning Attorney.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
Cleveland Estate Planning Attorney; Cleveland Last Will and Testament Attorney; Cleveland Financial Power of Attorney; Cleveland Health Care Power of Attorney; Cleveland Living Trust Attorney; Probate Administration; Probate Litigation; Trusts and Estates; Contested Trusts and Estates; Decedents Estates; Estate Administration; Estate Litigation; Estate Planning for the Elderly; Estate Planning for Unmarried Couples; Estate Settlements; Family Trusts; Fiduciary Law; Fiduciary Liability; Fiduciary Litigation; Financial Planning; Living Trusts; Personal Planning; Powers of Attorney; Trust Administration; Trust Law; Trust Litigation; Trust Planning; Adult Guardianship; Advance Directives; Conservatorship; Elder Guardianship; Guardianship; Guardianship Administration; Incompetency Proceedings.
September 13, 2011
There are a number of reasons why a parent may what to change her child’s name. The most common situation that I have seen is that either a father has or has not been involved in the child’s life, and for that reason the mother wishes to change the child’s last name.
In order to change your child’s name, an application would need to be filed with the Probate Court in the county that the child has resided in for at least one year. On the application, the applicant will have to state the reasons for the requested name change and the requested name. Notice of the application will have to be given to the non-consenting parent and a hearing would be scheduled before a Court Magistrate.
The standard the Court would be applying in reviewing the application is reasonable and proper cause for the name change. In determining whether there is a reasonable and proper cause for the name change, the Court would have to consider the best interest of the child. When considering whether to change the child’s last name, the Court will take into consideration the following factors:
- the effect of the change on the preservation and development of the child’s relationship with each parent;
- the identification of the child as part of a family unit;
- the length of time that the child has used a surname;
- the preference of the child if the child is of sufficient maturity to express a meaningful preference;
- whether the child’s surname is different from the surname of the child’s residential parent;
- the embarrassment, discomfort, or inconvenience that can result when a child bears a surname different from the residential parent’s;
- parental failure to maintain contact with and support of the child;
- and any other factor relevant to the child’s best interest.
If you have questions regarding applying for a child’s name change or having representation in the proceedings, seek out a probate lawyer.
Elizabeth L. Perla, Esq.
Law Offices of Randall M. Perla
Cleveland Probate Attorneys
19443 Lorain Road
Fairview Park, Ohio 44126
Phone (440) 333-2503
Fax (440) 333-9650
perlalaw@wowway.com
www.randallperla.com
