I am very excited to announce that I will be expanding my estate planning practice to Ohio starting on Monday, May 12th, 2014!  I will be accepting clients by appointment at the law offices of Marsh & Marsh in Bowling Green, Ohio, where I will be practicing with my father, Michael Marsh.  My contact information for Ohio residents can be found below:

Marsh & Marsh Attorneys at Law
249 South Main Street
Bowling Green, Ohio 43402

Phone: 574-252-6099

Email: kwronalaw@gmail.com

If you are an Ohio resident interested in my estate planning services, please feel free to contact me at any time to schedule an appointment.  I would be delighted to work with you and your family to meet your estate planning needs.

We typically utilize wills to distribute our assets after death.  When we retain assets until death, the probate process will be involved and our wills dictate how we would like our appointed executor, or personal representative, to distribute our assets.  However, if you set up a trust during your lifetime, called an “inter vivos”  trust or a “living” trust, you can utilize your will to fund your trust with any assets that you did not transfer into the trust during your lifetime.

If you created a living trust, you may or may not have transferred all of your assets, including personal property, real property, or accounts, into the trust.  Your trust may be used to provide for the support of a loved one or for yourself during your lifetime.  Typically, income derived from trust property is distributed according to the terms of your trust.  Your trust also likely provides a blueprint for how the trust should proceed in the event of your death.  Upon your death, the trust may continue to operate unchanged, the distribution of trust assets may be modified, or the trust may terminate.

An effective estate planning tool for individuals who have a living trust is a pour-over will.  A pour-over will simply directs that all of the assets you own outside of your trust at death be “poured over” into your trust upon your death.  This means that after your death, assets that you did not place into a trust during your lifetime, whether purposefully or accidentally, become a part of that trust.  As such, the assets covered by your pour-over will can be managed and distributed according to the terms of your existing trust as opposed to your will.

A pour-over will allows you to retain full ownership and control over your assets until death, while still allowing your assets to pass according to your trust.  In directing that all assets go into an existing trust, a pour-over will can make the probate process go more smoothly by eliminating uncertainty as to how assets should be distributed.

When creating your Will, you will likely think about who should receive your most valuable and memorable personal possessions after you pass away.  Maybe you would like to pass along your heirloom jewelry to your daughter or a valuable painting to your grandson.  What options do you have to make sure that your personal belongings end up in the right hands after you pass away?

In Indiana, you have two options for making gifts of specific personal items upon your death.  The first option is to list specific gifts in the body of your Will.  In Ohio and a handful of other states, this is the only available option.  Alternatively, in most states, including Indiana, you may instead utilize a separate Memorandum of Tangible Personal Property to list specific gifts of personal property.  How do these options differ?

When gifts are listed in the body of your Will, the only way to add, rescind, or modify a specific gift is to redo your Will or make an amendment through a Codicil.  Any time you execute a Will or Codicil, formalities must be followed in order to make alterations binding.

On the other hand, as long as your Will refers to your separate Memorandum of Tangible Personal Property, you may add, rescind, or modify specific gifts of personal property in your Memorandum as you please without worrying about the formalities required for Wills and Codicils.  A Memorandum of Tangible Personal Property can be useful in eliminating doubt or disagreement among loved ones as to your last wishes.  Keep in mind that a Memorandum of Tangible Personal Property can be used only to pass tangible personal possessions.  Such a device cannot be used to pass real estate or intangible property such as stocks, bonds, or bank accounts.

There are a number of errors that can be made during the drafting process that can damage the effectiveness of your will.  Five of the most common mistakes to avoid in drafting your will include:

• Vague or Unclear Wording: When you are drafting a will, it is important to use clear and specific language.  After you pass away, your will should provide a clear understanding of your last wishes that can be easily carried out by your loved ones.  Clear wording can reduce confusion and tension after your death, leaving a helpful guide for friends and family.
   
• Forgotten Assets: Oftentimes when drafting a will, individuals will forget to account for certain assets, or perhaps new assets that will be acquired after the will is drafted.  Assets that are not passed by will are distributed according to state intestacy laws.  If assets are left out of your will, distribution of your assets upon your death may be delayed as the probate court determines who is entitled to the assets.  By utilizing a residuary clause in your will, you can ensure that any forgotten assets will pass to an individual of your choosing rather than according to a court order.
   
• Improper Appointments: When deciding who will be responsible for distributing your assets after death, it is important to select an Executor (sometimes called a Personal Representative) who will be capable of filling this often heavy role.  Additionally, if you have minor children, it is a good idea to appoint a competent Guardian in the event that your child is left with no surviving parents.  Assigning the roles of Executor and Guardian should not be taken lightly.  It can be helpful to discuss these decisions with potential appointees.
   
• No Updates: If you have had a child, acquired new assets, gotten married or divorced, or lost a loved one, you may need to update your existing will to account for these changes.  As stated above, any assets not distributed through your will are going to pass according to state intestacy laws.  If you made specific gifts or assigned roles to named individuals in your will, you may wish to make changes to account for new or severed relationships.
   
• Lost Wills: After you have created a will, it is important to let loved ones know where your original will can be found in the event that you pass away.  A probate court will require a signed original copy of your will.  If your will is lost or inaccessible after you pass away, the probate process could be delayed, distribution of your assets could be postponed, and your will could even be rendered ineffective.

The laws relating to the federal estate tax have varied over time.  It is important to understand the federal estate tax system as you develop your estate plan. 

As part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Congress granted a $5 million exemption for estate tax purposes beginning in the year 2011.  As such, only estates worth more than $5 million were subject to the federal estate tax.  This lifetime exemption amount (also called the “unified credit”) has been increased each year to account for inflation.  In 2012, the exemption amount was set at $5.12 million.  Last year, in 2013, the exemption amount was $5.25 million.  For those dying in the year 2014, the IRS has set the exemption amount at $5.34 million.

This lifetime exemption is called the “unified credit” because it actually takes into account the sum total of lifetime gifts made plus the value of one’s estate at the time of death.  So, if you choose to give away $5.34 million in gifts during your lifetime and you die in 2014, you will have used up your lifetime exemption amount before your death.  As such, your entire estate will be subject to the federal estate tax.  If you give away $2 million in gifts over your lifetime, the first $3.34 million of your estate will not be taxed.  Certain gifts such as those to your spouse or charities are not included in the calculation of lifetime gifts.  In addition, each year, every individual may give up to $14,000* in gifts to as many individuals as they would like without using up any of the lifetime exemption amount.  Only gifts made to individuals in excess of $14,000 over the span of one year count toward your lifetime exemption amount.

Another benefit of the unified credit is that it is portable.  This means that if you are married, any unused portion of your exemption amount automatically passes to your spouse upon your death.  If you are married, you and your spouse share a $10.68 million lifetime exemption this year.  So, if you die in 2014 having used up only $1 million of your exemption amount, your spouse’s lifetime exemption amount will be $9.68 million.

By reviewing your estate plan from time to time, you will ensure that your plan accounts for any changes in the federal estate planning structure.

*Applies to 2014, but subject to inflation adjustment in future years.

Once you have created your estate plan, it can be tempting to lock away your Will, Living Will, Trust, Power of Attorney, and other documents for safekeeping and forget about them for years to come.  However, it is important to view your estate plan as a set of living, breathing documents that require alteration from time to time to reflect changes in your life.

When you experience a major life event such as having a child, getting married, getting divorced, retiring, or losing a loved one, it may be a good idea to review your estate planning documents for any necessary updates.  Often, designated beneficiaries, guardians, trustees, or personal representatives may need to be changed to better reflect your current relationships and wishes.  Additionally, changes in your financial status or property ownership may necessitate a review of your estate plan to make sure your best interests and those of your loved ones are served.   An update to your estate plan can also accommodate your changed needs in the event of a health problem or the onset of a disability.

As your life and relationships change, make a point of reviewing your estate planning documents from time to time to ensure that your plan is still right for you and your loved ones.

Happy New Year!  To start 2014 out on the right foot, resolve to set in place your plans for the future.  It's never too soon to start planning your estate.  No matter your age, by planning ahead, you will feel better prepared to face the twists and turns life can take with confidence.  To begin, it can be helpful to discuss those "what if" situations with family and loved ones.  Including family in your decisions regarding the distribution of your assets and the care of your dependent children after death can help to reduce chaos should an unexpected event occur.

By setting up a Will, Living Will, Durable Power of Attorney, Health Care Power of Attorney, and life insurance policy now, you ensure that your assets will pass according to your wishes and not according to a probate court order.  In addition, you are able to provide some financial security for dependent individuals, including a spouse or children.  Establishing an estate plan is a simple way to gain peace of mind today and to protect your assets and your family in the future.

Best wishes for a safe, happy, and healthy 2014!

The answer is YES!  An estate plan is essential for all individuals regardless of wealth, property ownership, or familial status.  While a Last Will and Testament can provide your loved ones with a roadmap for distributing your assets after you pass away, a good estate plan can do so much more. 

As part of your estate plan, you can utilize Power of Attorney documents to appoint an individual to manage your financial affairs in the event that you become incapacitated.  Additionally, a Power of Attorney appointment can be used to designate an individual to manage your healthcare decisions should you become unable to do so.  Further, you can direct your loved ones on how to manage your end of life medical care through a Living Will.   Establishing a plan for your end of life care ahead of time through a Living Will can relieve some of the stress your family and loved ones will experience during your final days.

So, although an estate plan can be utilized to distribute your assets by will, an estate plan can also establish who will take care of your financial and healthcare decisions when you are unable to do so, and how you wish to live out your last days.

I wish you and your family safe and happy holidays!

The probate process is the court-supervised administration of a decedent's estate.  This process can take months or even a year to complete.  Only property included in the "probate estate" will be handled through the probate process.  The probate estate is comprised of any property owned by the decedent alone and not distributed before death or through automatic transfer at death.  Good planning can simplify the distribution of your assets at death by minimizing or even eliminating the probate estate.

Certain property will transfer automatically at death, including property held in joint tenancy with right of survivorship, or property held by a married couple as tenants by the entirety.  Additionally, bank accounts and other assets registered as payable-on-death or transfer-on-death will pass automatically at death.  Life insurance proceeds and retirement accounts will also pass without court intervention as long as a beneficiary has been named.  Finally, property held by the trustee of a living trust will not become part of the probate estate.

By taking the time to arrange your affairs today, you will save your family and loved ones time, energy, and money in the future.

Although death can be an uncomfortable subject to consider, planning for the distribution of your property upon your death can save your family and loved ones time, money, and confusion in the future.  Unfortunately, estate planning often gets put on the back burner, for many until it is too late.  So what happens to your property if you die without a will or trust?

Individuals who die without a will are considered to have died "intestate."  When an individual dies intestate in Indiana or Ohio, it is up to the probate court to distribute the decedent's property according to the state's intestacy laws.  The probate court will assign the role of executor to an individual of its choosing to carry out the property distribution.  Under Indiana and Ohio's intestacy laws, the property of a deceased individual passes first to the individual's spouse or children.  If a spouse or children do not survive, the court will look to the decedent's parents and then to the decedent's siblings.

When the probate court becomes involved in the distribution of a decedent’s property, the distribution process is often delayed and can become very expensive.  Additionally, the court’s choice of executor and property distribution decisions may become points of contention for family members and loved ones, further prolonging the process.  Creating a will is the best way to appoint a trusted executor and to make sure that your property is distributed according to your wishes.

In May of this year, Indiana Governor Mike Pence signed into law Indiana House Enrolled Act 1001, repealing the Indiana Inheritance Tax.  This new law applies retroactively to January 1, 2013.  This means that for individuals who pass away after December 31, 2012, there will be no Indiana tax imposed on asset transfers at death.

Although the Indiana Inheritance Tax is no longer a concern, planning for the future is still important for you and your family.  By preparing a will, you ensure that your assets will pass according to your wishes upon your death without the interference of a probate court.  Additionally, estate planning eliminates stress and confusion for your family and loved ones as to how your property should be distributed, and as to who should provide care for your minor or dependent children.

Thank you for visiting my website!  I look forward to providing updates and helpful information relevant to your estate planning needs.