Special Needs Trusts in Ohio in a Nutshell

special needs trusts medicaid ohioShould an individual with special needs receive a large sum of money, it is often wise to have the individual or his/her fiduciary establish a special needs trust in order to not jeopardize assistance already being received such as Medicaid or SSI.  Should a parent or grandparent wish to provide funds to a special needs individual and not jeopardize assistance being received, a special needs trust may also be a good idea.  However, before embarking on such an endeavor, it is critical to understand the different types of special needs trusts and their requirements or else risk losing the benefits already being received.

Set Up Special Needs Trusts To Protect Existing SSI Or Medicaid Benefits

The most common special needs trust created by and with assets of a third party is known as a discretionary “supplemental needs” trust.  With such a trust, there is no requirement that funds be turned over to the state upon the death of the beneficiary.  However, proper drafting is critical.  It is to be used for things not covered by Medicaid or SSI.  It must clearly state that it cannot be used for medical care, comfort, maintenance, health, welfare or general well-being.  It should … Read More... “Special Needs Trusts in Ohio in a Nutshell”

Gay Marriage Alert: The IRS Finalizes Rules Recognizing Same-Sex Marriages

Tax Returns To Be Amended By IRS To Reflect Same-Sex Marital Status Changes

same-sex marriage irs taxIn 2013, in United States v, Windsor, the U.S. Supreme Court found Section 3 of the Defense of Marriage Act to be unconstitutional.   Section 3 defined “marriage” as a legal union between one man and one woman and “spouse” as only a person of the opposite sex who is a husband or a wife.  The Court’s decision meant that married same-sex couples must be treated under federal law as married opposite-sex couples.

The IRS followed up with Revenue Ruling 2013-17.  The IRS concluded that, for federal tax purposes, the terms ” husband and wife”, “Husband” and “wife” should be interpreted to include same-sex spouses.  The IRS further concluded that, for federal tax purposes, recognition should be given to a same-sex marriage that was valid in the state where it was entered into, regardless of the married couple’s place of domicile.

IRS Issues Final Rules For Same-Sex Marriage Couples

On September 2, 2016, the IRS has issued final rules consistent with United States v. Windsor and Revenue Ruling 2013-17.  Under these rules, the terms “spouse”, “husband” and “wife” shall apply to same-sex marriages for federal tax purposes.  These … Read More... “Gay Marriage Alert: The IRS Finalizes Rules Recognizing Same-Sex Marriages”

Guardian Issues: New Responsibilities Imposed on Ohio Guardians

What Are The Additional Requirements For A Guardian Of An Estate In Ohio?

guardian estate planningWhile it has always been a great responsibility to serve as a legal guardian for another individual, last year Ohio imposed a number of additional requirements of guardians in an effort to protect the welfare and safety of those wards to whom they serve.  These protections are both financial and personal.

An individual can be guardian of the person, guardian of the estate (financial), or more likely guardian of the person and the estate of another individual.  Previously, a guardian of the person was required to protect and control the ward, provide suitable maintenance for the ward, make appropriate decisions for the ward, provide education if the ward is a minor and file guardian’s reports with the court.  A guardian of the estate was required to file an inventory with the court, deposit money in a financial institution in this state, invest funds in a lawful manner, make and file accounts annually, expend funds only upon written approval of the court and file guardian’s reports.

I addition to these requirements and in order to better protect the ward, all Ohio guardians must complete a six hour course … Read More... “Guardian Issues: New Responsibilities Imposed on Ohio Guardians”

Medicaid: Qualified Income Trust Needed For Eligibility

ALERT: Significant Changes in Ohio’s Medicaid Income Rules Have Arrived! Qualified Income Trust Needed For Higher Income Families To Be Eligible

medicaid qualified income trust ohioFor those receiving long-term care services, Ohio’s Medicaid program has always had a monthly income limit.  In 2016, that limit is $2,199 per month.  However, until now, Ohio was a spenddown state, which meant that as long as the individual spent down each month on monthly expenses below the income threshold, the individual would be eligible to receive Medicaid services.  Effective July 1, 2016, no one will be able to spend down to meet the monthly income threshold, but will need to deposit any excess income into a Qualified Income Trust (QIT) to become eligible for Medicaid coverage.

A QIT will divert some of the applicant’s monthly income into an irrevocable trust managed by a trustee (usually a family member).  The trust can only be funded with the individual’s pension, social security or other income.  No other resources may be added to the trust.  The income must first be paid to the individual and then transferred into the trust.  The money in the trust can only be used for incurred medical expenses, monthly personal or maintenance needs allowance, … Read More... “Medicaid: Qualified Income Trust Needed For Eligibility”

Estate Planning and Probate: The Effect of Titling of Assets

Effective Titling Of Assets Can Benefit Estate Planning Probate Documents

estate planning probate payable on death titling of assetsMany people do not understand the distinctions between how one titles one’s assets and the resulting repercussions from it. Properly titling one’s assets can greatly increase the effectiveness of one’s estate plan. Some of these distinctions are described below:

  • Power of Attorney: Adding another individual as power of attorney on an asset does not convey any ownership rights, but allows an agent to manage the asset and utilize it just as if the owner could. The agent is known as your attorney-in-fact. Adding a power of attorney does not keep an asset from having to go through the probate process, but allows an agent to manage the asset (pay bills, etc.) without having to go through a guardianship proceeding.
  • Payable on Death/ Transfer on Death: often confuse Power of Attorney (POA) with Payable on Death (POD) designations. By designating someone as a Payable on Death (POD) beneficiary does not give any rights during the owner’s lifetime but allows the asset to pass directly to the payable on death beneficiary on the death of the owner without having to go through the probate process. It “avoids probate.” Payable on Death (POD)
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Estate Planning: A Truly Sad Story, Prince – His Tragic Death and His Lack of Estate Planning

Singer Prince Passing Proves The Importance Of Estate Planning Documents

estate planning ohio princeAs everyone knows by now, sadly, Prince unexpectedly passed away recently. In the days following his untimely death, questions began to arise as to whom would inherit his estate, which some have estimated to be worth between 300 and 500 million dollars. Surely he had a will, experts speculated. He had an army of attorneys working for him.

As it turns out, he apparently died with no estate planning documents in place. When asked how this happened, one of his many attorneys stated “Maybe he didn’t expect to die.” Unfortunately, this is the mindset that many of us have. We never would expect to die so soon.

Lack Of Estate Planning Documents Can Result In Repercussions For Surviving Family Members

Prince died leaving 1 full sister and 6 half siblings. Under Minnesota law, as under Ohio law, the 7 of them will share equally in his estate. Is this what he would have wanted? Possibly, but he was known to have given generously to charities, having developed a foundation and having already donated millions to various charitable organizations. Sadly, none of them will share in his estate.
Prince’s … Read More... “Estate Planning: A Truly Sad Story, Prince – His Tragic Death and His Lack of Estate Planning”

Tax Tips for 2015

What You Can Do To Minimize Your Tax Burden For 2015

tax tipsIt’s now the time of year to consider what you can do to minimize your tax burden for 2015. Following are some of the tax tips you may want to consider to reduce the amount due to Uncle Sam next April.

  1. Make your charitable deductions before the end of year.  Generally, you can deduct charitable contributions up to fifty percent of your adjusted gross income.  Get rid of those unused items and receive a tax deduction.
  2. Remember that you can gift up to $14,000 per year to each individual with it being exempt from any gift tax reporting requirements to the IRS (or actual gift tax if you have exhausted all of your lifetime gift tax exemption).  If you are planning to make any large gifts, at least make a gift of $14,000 before the end of December to take advantage of this gift tax exemption.
  3. Go to the doctor.  If you itemize your deductions and have enough medical expenses (10 percent of AGI for most individuals), you can deduct these expenses.  If you need new eyeglasses, hearing aids, etc., now is the time to do it.
  4. Prepay.  You
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