What Widows Need to Know

There are over 11.5 million widows in the US today, according to the US Census Bureau. These women have to adjust to all sorts of changes, including becoming the sole decision maker in matters of their finances. Many women are not comfortable handling money. The whole process can seem complicated and daunting, but it is important that you know what you own and how it’s held. Once you have tamed everything it should seem much less overwhelming in the face of tragedy.

            Know Your Money. In the case of finances, ignorance is not bliss. Organize all your finances and important documents. Find out where everything is, and how it’s held. Organize the information including passwords, companies, statements etc. This is important not only so you know where your assets are, but also so someone else could take care of your finances if you become incapacitated or pass away.

            Get All the Benefits You Can. As a whole, widows are one of the most impoverished groups in the country. There are many forms of assistance available to widows. Some may have been directly set up by your late husband, so contact any life insurance companies your husband may have had a policy with, and check to see if you are entitled to any widow’s benefits from his employer. Rollover your late husband’s IRA accounts into your name so as not to lose those tax benefits. You may want to check with the state for unclaimed funds. There also may be money available from Social Security or the Department of Veterans Affairs.

            Social Security Benefits. Widows may be entitled to receive Social Security benefits if the deceased spouse had earned enough work credits to qualify for Social Security benefits on his own. You can receive benefits as early as age 60, and can receive social security disability benefits as early as age 50.

            Veteran’s Benefits. If your husband was a veteran, it may be worthwhile to see what benefits you are entitled to. Veteran’s widows may qualify for assistance, but they have to apply for the funds. There are several Veteran pensions, and according to a VA estimate, only one in seven of veteran’s surviving spouses, who likely could qualify, actually get the monthly checks.

            Title all assets properly. As you’re sorting through paperwork, you may find assets that are still held in your late husband’s name or jointly titled to the two of you. If you have not yet done so, it is important that you get these assets transferred into your name alone. With joint assets, accounts with both your names, this can usually be done by taking a death certificate to the bank or department of motor vehicles and filling out the appropriate paperwork there. If there are assets in your late husband’s name alone you may need to open a probate estate.

            Set Up Your Estate Plan. Once you know where everything is, and it is all titled in your name, it is time to think about where you would like your assets to go when you pass away. Think about whether you would like your assets split equally between your children or if you would like certain individuals to inherit more or less. If you don’t have children, or are not close to them, think about who you would like to inherit when you pass away such as your siblings, nieces and nephews, close friends, or charities. Make sure you name new beneficiaries for any retirement account or life insurance policy you may have.

Take Care of Yourself. Most importantly, you need to figure out who you want to take care of you, should something happen. Who would be making your health care decisions for you if you were in the hospital? Who would manage your financial affairs should you no longer be able to? One of the things a widow has to adjust to is being on her own and taking care of herself. Make sure you have a good support system and a plan as to who would take care of you if you were unable.

When your husband passes away, everything changes. One of the changes is that you become in charge of handling your own estate. If you feel overwhelmed, an attorney can help you get everything in order. Remember, you are not alone.

Achieving A Better Life Experience – ABLE Accounts

Achieving A Better Life Experience – ABLE Accounts

2016 could be a banner year for Ohioans with disabilities and their families as our Treasurer of State rolls out a program to establish ABLE accounts. These tax advantaged savings accounts will allow individuals with special needs and their families to save for “qualified disability expenses” in the same way that a 529 plan allows families to set aside money for college expenses.  The funds accumulated in the ABLE account will not disqualify the beneficiary for needs-based public benefits such as SSI, Medicaid, Section 8 Housing, and food stamps.

Why would an ABLE account be needed?

Public benefits such as SSI and Medicaid are “needs-based”. In order to qualify, a person must have limited assets. To avoid jeopardizing their benefits, people live in a chronic state of poverty. They cannot save for big purchases.

The ABLE account can allow beneficiaries with small savings to qualify for Medicaid. It can give those on SSDI or SSI recipients with part time jobs an easy place to accumulate excess earnings. Family members will be able to make small gifts to encourage independence.

Who qualifies for an ABLE account?

To qualify for an ABLE account an individual must be disabled as defined by Social Security standards and the disability must have begun prior to the age of 26. Contributions can be made by anyone (the account beneficiary, family or friends).

What expenditures are allowed?

A “qualified disability expense” can include education, housing, transportation, employment training and support, assistive technology, health care expenses or financial management costs. These expenses can enhance the beneficiary’s quality of life by providing goods and services not covered by public benefits.

Are there limits as to how much money can be put in the ABLE account?

Each beneficiary can have only one ABLE account. Total contributions to the account can be no more than the annual gift tax exclusion ($14,000 in 2016). If the ABLE account balance exceeds $100,000, SSI income will be suspended until it is reduced, but other programs won’t be affected. Each state that adopts an ABLE program will set a maximum limit on the account.

What happens when the ABLE account beneficiary dies?

When the beneficiary dies, the money in the account must be used to reimburse the state for expenses paid by Medicaid.

How is an ABLE account different than a Special Needs Trust or Pooled Trust?

The ABLE account will cost less to establish and maintain than a Special Needs Trust or Pooled Trust and will allow beneficiaries to control their own money. This will make the ABLE accounts much more flexible and accessible. Funds in the account may also be more susceptible to misuse and penalty as they will lack the oversight of a Trustee. Trusts will still be better suited for large personal injury awards and inheritances.

Where can I establish an ABLE account?

You will be able to establish an ABLE account in any state that has an established program, but only one account can be established per beneficiary. Each state will determine which financial institutions will administer the ABLE accounts.

At the present time, no state has a fully developed ABLE plan. Ohio is on track to have one of the first.

ABLE accounts will be a valuable new resource for qualified beneficiaries and their families. Consult a knowledgeable elder law or estate planning attorney to discuss how they will coordinate with trusts, guardianship’s, and other legal issues affecting people with special needs.



Visit the website for additional information: http://www.stableaccount.com/

Life Insurance and You

Life Insurance and You

Life Insurance can be an important part of your estate plan. Pull out your old policies every time you update your plan and ask yourself these important questions:

  1. Do I Need Life Insurance?
    As the breadwinner of a young family, life insurance is tremendously important. If you should die your insurance can pay for the funeral, pay off the mortgage, provide for the children’s education and help your spouse get back on his or her feet. But now that the children are grown, you are divorced or widowed or retired, the premium payments or accumulated cash value might be better spent maintaining your own lifestyle.
  2. Who is the beneficiary?
    When we review life insurance policies, it is not unusual to find that the only named beneficiary is a long dead parent, deceased spouse or worse—an ex-spouse. If the named beneficiary is deceased then the insurance company’s internal policy will determine if it will pay out to the insured’s next of kin or probate estate. Sometimes an estate must be opened just to receive the insurance proceeds.

    Update your beneficiaries regularly and consider naming contingent beneficiaries to receive the claim should the primary beneficiary die before you.

  3. What Type of Insurance Policy Do I Have?
    All life insurance is not created equally. Each type has its own pros and cons.
  • Term Insurance– Term Life Insurance is the most straight forward and most economical type of insurance. You pay your premium for the month, quarter, or year and you are insured for the full amount of the insurance if your die within that period of time. Stop paying the premium and the insurance stops at the end of the term. As you get older, you are more likely to die during the term and the premium goes up. You can elect to make level term payments for a period of years so that you know the price will be fixed for that period.
  • Whole Life Insurance– Whole Life Insurance has a savings component as well as the premium. The cash value accumulates in the early years of the policy. At some point, the cash value approaches the death value payout of the policy and the policy is “paid up”. After that time no more premiums are due. Some whole life policies have an “endowment” at a certain age. If the insured reaches the endowment age, the cash value is paid out to the insured and the insurance ends.
  • Universal Life Insurance – Universal Life Insurance is a combination of Term and Whole Life Policies. The early payments go towards a low premium and a large cash value deposit. As the years go on the premiums increase and the cash value deposits are less and less. When the cost of the premiums for the insurance exceeds the payment due, the funds in the cash value are used to supplement the premium payments. At some point, the cash value will be exhausted by the ever increasing premiums. At that point, the insured can either begin paying the now much higher premiums or allow the policy to lapse.
  • Group Term Insurance – Some employers offer life insurance as a perk to their employees or retirees. Because premiums are paid in bulk, the cost to the employer is far lower than a private term policy would be.
  • Accidental Death and Dismemberment (AD&D) – This insurance is sometimes offered as a bonus by a bank, credit card provider or AAA. This is a group term insurance, but it only pays out if there is an accidental death. If the insured dies of cancer or some other illness or non-covered injury, no payout will be made.
  • Credit Life Insurance – This insurance only pays out to cover the creditor involved. Some credit card providers and mortgage brokers offer this life insurance to insure the loan will be paid off should you pass away. This insurance may or may not be less expensive than a standard term insurance policy, but it will only pay to cover the one debt to the extent that debt is still owed at your death.
  1. Does My Life Insurance Meet My Goals?
    Think of life insurance as a tool used to meet your specific goals. Whether it is to cover the cost of your burial, support your dependent spouse, finance your children’s education, or provide liquidity to your estate choosing the right type and amount of life insurance is critical to your plan’s success.

Who Can I Trust With My Trust

Who Can I Trust with my Trust

       Trusts are extremely versatile and efficient estate planning tools which allow for the effective management of assets both during the Settlor’s lifetime and after his death.  In establishing a trust the Settlor (creator of the trust) names a Trustee to manage the assets for the Beneficiaries.  The Settlor can be as specific or as flexible as he desires in directing how and when the assets are to be used.

Choosing the right Trustees can be the difference between the achievement of all of the Settlor’s goals and a catastrophe of financial mismanagement and family discord.  So whom should you choose?  Let’s look at the options.

You – Most people choose to name themselves as the initial trustee of a revocable trust.  This allows them to have complete control over their assets.  You would then name one or more Successor Trustees to take over management of the Trust assets when you become too ill to manage them for yourself or you pass away.

Your Spouse – Married couples will often name each other as Successor Trustees of their individual trusts.  They also frequently name both spouses as Co-Trustees of their individual or joint trusts.  This way, either spouse may manage assets just as they have always done with their joint accounts.  Of course, in the case of separation, divorce or incapacity, the spouse should be removed and replaced.

You and Another Person – Although spouses are the most common co-trustees, you may want to consider naming someone else, as you age or if you have lost your co-trustee spouse.  While having a Successor Trustee serves as a safety net in case you become ill or pass away, having a Co-Trustee is more like having a parachute.  During periods of intermittent illness or times you are traveling, your Co-Trustee can handle things.  If you develop a progressive illness or infirmity, your Co-Trustee can begin by acquainting himself with the assets and viewing transactions and monthly statements.  Then as you are able to do less and less your Co-Trustee can step up and do more and more. This allows you the advantage of seeing a sample of the Co-Trustee’s management style and avoids the potential conflict and distress of a declaration of incompetency.  It also allows the Co-Trustee time to familiarize himself with the assets and their management while you are still available to advise and explain.  This makes it far more likely that your goals and wishes will be achieved, than if the Successor must take over knowing nothing at a time when he may be grieving your illness or death.

Another Person – In the case of an Irrevocable Trust or if the Settlor doesn’t wish to manage the assets, a friend or family member may be chosen as Trustee.  In choosing a Trustee, look for a person with integrity who manages his own life and assets well; someone with diplomacy, organizational skills and a large dose of common sense.  It’s helpful if your Trustee is geographically available and has plenty of time and energy to commit to the task because, done right, managing a trust is a lot of work.

            Think twice before naming two or more people, other than yourself, to serve as Co-Trustees.  When you name two, you either tie their hands together by making them work in concert or give them separate, but equal powers in which case the right hand may not know what the left hand is doing.

Also consider your own family dynamics in deciding whom you will name as Trustee and what you are expecting that person to do.  For example, your daughter may be the right person to choose to manage assets for you if you become ill, but it may be too much to expect her to manage funds for her seriously disabled nephew for the rest of his life.

Your Agent Under Power of Attorney – In a complete estate plan involving a trust you will name an agent under a Durable Power of Attorney (POA) for Finances to handle assets that cannot go into the trust such as IRA’s, 401K’s and certain annuities.  Many people name the same person who they chose as Successor Trustee.  The POA Agent, can also manage trust assets in the Settlor’s place so long as there are provisions both in the POA and in the Trust allowing him to do so.

A Professional Trustee – Bankers, Attorneys, and Accountants may make it part of their business to act as a Trustee.  Their experience can be beneficial when the terms of the trust are complicated or the investments are complex.  Their expertise is helpful in analyzing tax issues, brokerage statements and choosing appropriate investments.  Choosing a professional trustee can avoid family jealousies and emotionally charged issues.  Although their fees may be more than a friend or family member would charge, it may be worthwhile in certain situations.

In the end it is your plan, your trust and your choice.  Who would be the best Trustee to accomplish your goals?

Guarding the Guardians

   Guarding the Guardians
(New Ohio Supreme Court Rules)

In order to promote uniformity of guardianship administration throughout the state and increase each county court’s vigilance in protecting Wards from abuse, the Ohio Supreme Court has issued several new rules regarding guardianship administration which will go into effect on June 1, 2015.  These new standards will apply to all guardians of minor children and incompetent adults regardless of whether the guardian is a family member, volunteer or paid professional.

Presently, each of Ohio’s 88 county probate courts creates it’s owns rules regarding guardianship administration.  The result is a patchwork of protections with varying levels of oversight by the courts.  Incidents of extreme financial abuse and neglect by guardians have drawn media attention to the need for changes.  The new, Supreme Court Rules of Superintendence require all counties to meet the following minimum standards:

  • A criminal background check will be required of all guardianship applicants other than attorneys in good standing.
  • Individuals who are paid to provide direct services to the ward such as in- home caregivers and nursing homes will not be permitted to serve as guardian.
  • Each guardian will be required to complete 6 hours of court sanctioned education in the first year and 3 hours of education in subsequent years. These courses will include information about establishing and managing guardianship, record keeping, reporting and improving the ward’s quality of life.
  • Guardians with 10 or more wards will have special reporting requirements.
  • Guardians will be required to meet personally with the ward at least once prior to appointment and at least quarterly thereafter.
  • Guardians will be required to file an annual plan with goals for the wards care.
  • Guardians will require the court’s approval before filing suit on behalf of the ward.
  • Guardians will be required to file a list of the ward’s important legal papers with the court.
  • Guardians will be required to report address changes, changes in the ward’s medical or financial condition and any allegations of abuse, neglect or exploitation of the ward.

The committee that drafted these new rules began work in 2007 when national news of guardians’ abuses and lack of court oversight caused a public outcry.  Some critics feel that Ohio’s new rules are not as rigorous as other states and don’t go far enough to protect vulnerable wards.  But many probate judges are concerned that the costs and added duties will reduce the number of people willing to serve as guardians for an ever increasing population of vulnerable individuals.

Acting as guardian for a loved one can be stressful, confusing and emotionally taxing.  An Elder Law Attorney familiar with guardianship law and knowledge of the many resources available can assist guardians in meeting the court’s requirements and providing good care for the ward.

Guardianship and the Court

Guardianship and the Court

Like any other court action, a guardianship is a serious matter.  Whereas in a criminal case or a civil case the prosecutor or plaintiff seeks to take away the defendant’s freedom or money, the Applicant in a Guardianship action is asking the Court to strip the Ward of the right to make his own decisions in medical and or financial matters.  Such an action is not to be taken lightly and is governed by the same legal protections afforded all citizens.


The burden is on the Applicant to prove by clear and convincing evidence first that the prospective ward is an incompetent person who cannot manage his own life/finances without the aide of a guardian and second that the applicant is a suitable person to serve as the guardian.

At a minimum, incompetency must be shown by presenting a Statement of Expert Evaluation completed by the prospective ward’s doctor or licensed clinical psychologist.  Suitability is shown through a criminal background check, a court interview of the applicant and, if finances are to be managed, a surety bond secured by the applicant.  A bond is an insurance policy that the funds will not be misused.


The prospective ward is entitled to notice that the Guardianship action has been filed.  Service is made by a Court Investigator – a social worker who explains the guardianship notifies him of the date, time and location of the hearing and advises him of all the rights that the prospective ward has in the matter.  These rights include:

  1. The right to object to the application;
  2. The right to be present at the hearing;
  3. The right to have a friend or family member present at the hearing;
  4. The right to be represented by an attorney, at a hearing;
  5. The right to have an attorney appointed (at Court expense, if necessary);
  6. The right to be examined by an independent medical expert (at Court expense, if necessary); and to introduce evidence of the evaluation.
  7. The right to present evidence of a less restrictive alternative to guardianship;
  8. The right to have a record of the hearing for appeal, if needed.

The Court Investigator will also help to have an attorney appointed to assist the prospective ward. (At Court expense if necessary)

The prospective Ward’s Next of Kin who reside in the state are also notified of the application and the time, date, and location of the hearing.  They can become parties to the case if they object to the guardianship or to the applicant.


Once a guardian is appointed, the Court remains involved as the superior guardian.  All actions taken by the Guardian from collecting assets and income, paying bills and selling property to moving the ward to a different home or placement must be reported to and approved by the Court.


Annually, the Guardian must report to the Court about the Ward’s residence and medical condition, verify the contacts he has had with the Ward and that the Ward has seen his doctor.  If handling finances, the Guardian must account for all moneys spent and show proof of bank balances, cancelled checks and all assets.  The Court retains the right to remove the Guardian if he doesn’t perform his duties correctly.

The Guardian may also have dealings on behalf of the ward involving Social Security, Medicare, Medicaid, pension providers, insurance companies, realtors, and litigation involving the ward or his property.

Clearly, a guardianship can be an intense undertaking both for the prospective ward and the prospective guardian.  In many cases, however, it is the only way to aide and protect an incompetent adult.

An experienced elder law attorney can counsel and guide an applicant through the legal, medical and financial complexities he faces.  This can ease some of the strain allowing the Guardian more time to care for and connect with his loved one.

Trust For Children


It is a parent’s job to raise and take care of their children. The question no one wants to think about is who would do that job if you were gone? Losing a parent is one of the hardest things emotionally a child can go through, but you can still take steps to provide for your children if you should die before they are grown. You can appoint a guardian in your will to raise your children, but you can also set up a trust to make sure the money is managed properly to provide for your children’s care.

A trust is like a basket. It is simply the vehicle for holding assets. The person who sets up the trust (the settlor) can customize the trust to handle things as she sees fit. She can name who will handle the money (the trustee), and name backup trustees in case the original trustee is unable to manage. The settlor can also name beneficiaries to the trust and decide what benefits they will receive from the trust. The settlor can also decide at what point the trust has served its purpose and will end, and when it ends who gets whatever assets may be left in the trust.

How to Spend the Money

The parent can make the trusts as strict, or as flexible as they like. Some parents choose to leave the trustee complete discretion. So if something like a trip to Europe for the child comes up, the trustee can choose to pay for it if they think it’s a good idea, or decline. Other times, the parents may say that the trust is only to be used for education, so if the same European trip came up, the trustee should pay for it only if it were deemed a study abroad educational expense.

Some parents may place conditions on what the child needs to do to inherit their share. They can say the child is entitled to inherit at age 25, or inherit at age 25 provided they have graduated from a state accredited college. If they do not graduate, they do not inherit.

The parent may say the money is to go to care for the family home so long as the youngest child is living in it, or it may simply lay out a general wish of how the settlor hopes the money will be used.

How to Hold the Money

Another question the settlor will have to decide is how the money is going to be “held.” If there is more than one child, the money may be divided into equal shares and each child has their own equal trust. When the child has used up the money in his own trust, it is gone and he cannot access his siblings’ trusts.

The other way is to set up a “Common Pot Trust” which puts all the money in one trust, and the spending on each child is based on need rather than on equivalency. In a common pot trust two beneficiaries may receive drastically different funding based on their needs. This is especially true for clients who have children born significant years apart and can help treat individual circumstances differently. There is no “primary” beneficiary so no child is required to receive any funds before or along with any other child.

Trusts are hard to think about in the abstract, so let’s look at an example:

The following illustration is for example purposes only:

Sally is a single mother, who is diagnosed with terminal cancer. She has four young children, Aiden (20), Becca (18), Carly (16), and Davey (4). Her main goal is to make sure her children are taken care of when she passes away. Her ex-husband, Matthew, is a good father, who Sally trusts to raise the children, but he is not good with money.

Sally doesn’t have much in assets when she passes away, but she did purchase a $500,000 life insurance policy for the kids when she got divorced, that she hopes will be used to care for her children’s wellbeing and education.

If She Does Not Set Up A Trust

If Sally names her minor children as beneficiaries of the Life Insurance Policy, the funds will be held by their legal guardian, and the children will have full access to their funds on their 18th birthday.

This means that Aiden and Becca would each inherit $125,000 immediately. Aiden takes a European vacation and buys a car. Becca uses some of the funds for college, but also pays for trips to the bar and shopping trips with her friends.

Carly and Davey’s share is held by their guardian, Matthew. Matthew uses the funds to care for the children, and there is some money left over when Carly turns 18, but not much. Davey’s share is spent before he is 18.

If She Sets Up Individual Funds

Sally names her sister as trustee for the funds, and sets up the trust with individual funds because she wants to treat her children “equally”. She says they can inherit when they turn 25.

Each child gets their own trust of $125,000. The trustee can only use funds from the child’s individual trust for their care and once they reach age 25 it is distributed to them.

Aiden is already in his third year of college when Sally passes. The trustee uses some of his trust to pay for his last year of college and helps with some incidental payments over the next few years but when he turns 25, he receives $100,000. He decides to take this money and go drink on a beach for a year.

Becca is just starting college, and decides she wants to go to Med school afterwards. The $125,000 is quickly spent on her undergraduate education and first year of medical school. She pays for the rest of medical school herself by going into debt, and there is nothing left to distribute when she turns 25.

Carly gets in a car accident when she is seventeen. Her trustee uses most of her funds to pay her medical bills and her rehabilitation funds. There are no funds left to help with her college.

Davey is the youngest. Over the years the trustee pays out so that he can have the same lifestyle his siblings had growing up, but the funds run out before he reaches 15.

Even though they each got equal shares of cash, equal doesn’t always mean fair. Davey was much younger than his siblings when his mother passed away, and the siblings all had mom’s support while she was alive. Sally may be rolling over in her grave at the thought of Aiden drinking his inheritance away on a beach while his siblings cannot afford to pay for their schooling or medical bills.

If She Sets Up a Common Pot Trust

If she set up the funds in a common pot trust, then the insurance money all goes into one pot of $500,000. The trustee has full discretion how to use this money. Sally can set up the direction or her wishes to the trustee to be as limited or as broad as she likes. Sally decides the primary use of the funds should be to raise Davey and for college educations. The trust will continue to provide for all four children until the youngest turns 25.

Aiden decides not to go to college. He buys a house and gets married but pays for everything himself, because the trust is intended to provide for education and Davey’s care.

Becca decides to go to college and then to med school. The trust pays $225,000 for her tuition and books over the years.

Carly decides to go to a year of culinary school. The trust pays $25,000 for her tuition.

Davey is only four when his mother passes away. The trustee pays an allowance to support Davey throughout his childhood, which costs about $210,000 until he turns 18. He decides to go to a local college with a scholarship. The trust pays $36,000 for this expense.

When Davey turns 25, there is only $4,000 left in the trust which is to be distributed equally to the four children. So they each get $1,000.

This may seem unfair to some. After all, Aiden only got $1,000 in inheritance from the trust, and Davey received $246,000. Becca and Carly both went to school for their careers but Becca received $200,000 more than Carly in tuition. On the other hand, if Sally’s main goals were to make sure Davey received the same opportunities as his siblings growing up and to provide for educational opportunities for her children, the trust accomplished it’s goal.

Which is better?

It depends on Sally’s goals. There is no one “right way” to make a trust because everyone has different goals for their children. Because of the customizable nature of trusts, saying “you have a trust” does not tell anyone what that trust does. Trusts are useful tools for accomplishing all sorts of different tasks. One very good use for a trust is for a parent to set one up to hold and manage money for young children if the parent should die before they are grown. This ensures that the parents can lay out rules and hopes for how the funds are to be used to care for their children, even after the parent is gone. Talk to a qualified estate planning attorney about how a trust could help care for your children.