will | Olivia K. Smith, Attorney at Law

What Role Your Will Plays in Estate Planning

June 28, 2021Filed Under: Estate Planning

A will is a legally binding directive stating who will receive your property upon your death and is an important part of a comprehensive estate plan. If you die without one (intestate), the state will distribute your assets and property via state law and quite possibly at odds with your wishes. Having a will allows you to appoint a legal representative or executor to carry out your bequests and name a guardian for your children. There is no doubting the importance of having a will, however there are some limitations you should be aware of.

Although a will can be the primary mechanism to transfer property on death, it does not cover all property situations. Some classes of property you are unable to distribute through a will are:

Property held in trust – A trust will have named beneficiaries who will receive the trust’s property according to the trust terms and not based on what is in your will (unless specifically stated in the trust).
Pay on death accounts – Informally known as PODs, the original account owner names a beneficiary(s) to whom the assets in the account pass automatically upon the owner’s death.
Life Insurance – Life insurance benefits pass to your named beneficiary(s) in the life insurance policy and are not affected by your will.
Jointly held property – Co-owned property is not distributed through your will. Joint tenants have an equal ownership interest in the property, and when one joint tenant dies, their interest ceases to exist. The other joint tenant now fully owns the entire property.
Retirement plans – In a similar manner to life insurance, money in an IRA or 401(k) passes to the named beneficiary(s). According to federal law, a surviving spouse is generally the automatic beneficiary of a 401(k); however, there are some exceptions. An IRA permits you to name a beneficiary(s).
Investments in transfer on death accounts – Some accounts holding stocks and bonds will transfer on death to the named beneficiary(s). Like POD accounts, transfer on death accounts bypass probate and go directly to the beneficiary(s).

A will does not allow you to avoid probate. By necessity, a will must go through the probate process in order to allow beneficiaries to inherit property. It can take months to get through probate, and it involves expenses like an attorney, executor, and court fees. Also, your will and everything associated with it (property you own, who your beneficiaries are, etc.) becomes part of the public record that anyone can access.

Keep funeral instructions outside of your will. The reality is your funeral may have already taken place before someone finds and reads your will, which can take days, even weeks. If your funeral or memorial service is important to you, the best way to help your family is to pre-plan, making arrangements with a funeral home. You can leave written instructions with the family as to your plans.

Your pets cannot inherit through your will. An animal is legally unable to inherit money or property from you. If you want your pets to be cared for after you die, leave money to a person willing to take care of your animals. The person you select can inherit your pets since a pet is considered property. You can also set up a pet trust or a pet protection agreement, either of which provides for your pet’s care.

Provisions for a child on government benefits are best in a trust. It is best to create a special needs trust to provide for a child with special needs or a child who is receiving government benefits. The trust can hold money for your child’s care without affecting those benefits.

There are ways to circumvent the limitations of a will by creating trusts, setting up pay-on-death accounts, and ensuring a beneficiary is named on all accounts that permit them. Your will is an important component of a comprehensive estate plan, but it can’t do everything.

We would be happy to discuss the pros and cons of having a will and other options available to you as part of your overall estate plan. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 with any questions.

What is a Will Contest?

May 31, 2021Filed Under: Estate Planning

After someone with a will passes away, their will lays out who shall receive their property, and which person (called the executor) will oversee settling the estate. For many reasons, beneficiaries can feel slighted by what they did or didn’t receive, and some individuals are entirely excluded from inheriting anything at all. The legal process of challenging the validity of a will is called a will contest (or “contesting the will”).

Once probate is underway, the named executor will take the necessary steps to complete probate and notify beneficiaries named in the will. This legal notice typically limits the time when a beneficiary can contest the validity of the will. Generally, a beneficiary (and even a person not named in the will) has thirty to ninety days to bring legal action against the decedent’s will.

Know that the vast majority of wills pass through probate without issue. The courts rightly view the will like the author’s (testator), last voice. Because the testator can no longer speak to their wishes, the courts try to adhere to the legally filed will stringently. Because of the narrow timeline for filing a will contest and the odds stacked against winning the legal challenge, most challengers will find it a fruitless and costly endeavor.

Under what circumstances then would you want to contest a will? Legally, only a person or entity with “standing” can contest a will. Standing is when the party involved in the will contest will be personally affected by the case’s outcome. Most often, this means an heir or beneficiary already named in the decedent’s last will or any preceding will. It may also include any person (usually a spouse or child) not named in the will, but because of state intestacy laws would be eligible to inherit in the absence of a will. Typically, four grounds are viable for contesting a will:

The will’s signing lacked the proper legal formalities
The mental capacity of the decedent to make a will is in question
Someone leveraging undue influence over the decedent into making or changing a will
The will’s procurement is fraudulent

Certain fact patterns may lead to a successful will contest. As an example, if a testator writes their own will, some legal formalities may be overlooked, rendering the will invalid. In particular, the “do it yourself” method for creating a will may not include all of the “what if” scenarios making the will incomplete. In another example, if the testator is experiencing isolation from family and friends, the primary beneficiary’s influence and motives regarding the estate may come into question. If the executor is trying to enforce an outdated will, the newer one should supersede the older one as long as no coercion was involved in writing the most recent version. Finally, some medical evidence may suggest the testator lacked the requisite mental ability to make a will. Occasionally the challenger to an existing will can negotiate a settlement with the estate instead of enduring a court proceeding.

Some wills include a no-contest clause, also called an “in terrorem” clause. This provision states that if anyone files a lawsuit challenging the will’s validity, they will receive nothing from the estate. While this may a powerful deterrent, it may not be allowed in the state where the will is probated.

To protect your will from being contested, even if you have limited assets, your best strategy is to have your will professionally drafted by an attorney well versed in estate planning. Using an attorney can help protect you and your estate from future legal challenges while helping you think through who you want to inherit your money and property, and how each person should receive what they inherit.

If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us at 513-771-2444. We’d be happy to speak with you.

What Happens to your Digital Assets?

January 11, 2021Filed Under: Asset Protection, Elder Law, Estate Planning

Today, almost everyone has digital footprint. From social networks like Facebook, Linkedin, Instagram, Twitch.tv and Twitter, blogs and licensed domain names, email, music, photos, seller accounts on eBay, Amazon, or Itsy, gaming accounts, even your financial, utility, and medical accounts are all part of your digital footprint. When most of us created these accounts, we blithely accepted the End User License Agreement (EULA) without much thought to when we would no longer be around to manage their content and activity. However, a EULA designates in detail the rights and restrictions that apply when using the software known as terms of service (TOS). Most EULA’s are a standard form of contract, a contract of adhesion, which is known to exploit unequal power relationships. A user has no option to negotiate the terms of a EULA if they want to use the software.

When you create your will and its associated documents like a durable power of attorney (in the event you become incapacitated) it is prudent to include digital assets and a designation for someone to access your online accounts and manage their activity. Without specific instructions, most of your online accounts will not pass through the typical estate planning devices like trusts and wills because they are not your property. Still, they are very representative of your being. Since most TOS are non-transferable, you will likely be unable to transfer the “ownership” of your online accounts legally. However, you can still plan for how they should be handled when you die.

In terms of Facebook and other social network platforms, each company has its policy regarding the account of the deceased. Facebook, for example, will permit your account to be placed in a “memorial” status so that it can be viewed, and loved ones can leave memorial messages. Other social networking sites will delete or deactivate your account. If the social network is not appraised of your death, the company won’t know for a while, allowing someone to make changes to your account after your death, perhaps even posting a final status or update of your choosing. Though this is in opposition to most social networking platform policies, it is difficult for online companies to know about and monitor user activity in the event of death.

Your executor should inform readers of a blog or other licensed domain names you maintained while alive. A licensed domain name should be transferred or ended as continued licensing payment makes no sense. The content of these sites should be removed or archived. If you belong to online communities such as a book group or community list serve, you may also choose to leave a final message or have your executor notify the group of your passing.

If you store movies, music, photos, eBooks, or other digital online files, your executor should have access to the files and carry out your wishes as to what to do with them. If you do not leave access to your online accounts, they will eventually become disabled due to inactivity, and no one will have access to the files. In the event you own the data, i.e., personal photos, you can use your will or living trust to leave them to a loved one or a friend. You will have to leave detailed descriptions (My trip to Paris) for photos. As far as purchased online music or eBooks it is not the same as owning a physical CD or book. Software or digital content does not permit acquisition of ownership rights. This means the money you paid for the online content was more of a subscription service solely for your use and not transferable upon your death. Your virtual music and film library will die with you.

If you are an online seller on eBay, Amazon, Itsy, or the like, leave specific instructions about what to do with your online store. You may leave all profits that continue to come in and the stock items you sell through your will or living trust. When the company knows of your death, your executor will have no power over the account itself, but you can make provisions for the profit and stock items to be bequeathed. If you want someone to take over your online store after you die, you will need to reference the TOS of the company. Most do not allow accounts to transfer; however, the new “owner” can open a new account and reimagine your storefront.

Financial, utility, and medical accounts should all be addressed very clearly in your digital will. Leave instructions as to what website, username, and password are for each account. Also, leave written instructions about what to do with each of them. Regarding your financial accounts, their contents will be addressed in your will or trust, but your executor will have to access these accounts to wrap up your estate. These accounts include checking and savings accounts, mortgage, life insurance, and retirement accounts, as well as phone, cable, gas, and electric bills, tax preparation services, medical accounts, and more.

Your online presence requires digital legacy planning. Take a good look at all of your online accounts and be sure to leave reliable access to them and instructions for your executor. We can help you with this process, and with drafting appropriate planning documents to deal with these assets.

If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us at 513-771-2444.

The Importance of Having a Will in Place

November 23, 2020Filed Under: Elder Law, Estate Planning

Care.com’s annual estate planning survey for 2019 found that 57% of U.S. adults do not have a Last Will & Testament (a “Will”). The survey found that participants were more likely or less likely to have a Will depending on issues such as age, race, and education. For example, when broken down generationally, 66% of people aged 65 and older, comprising the Baby Boomer generation and The Greatest Generation, have a Will, better than the overall average. Only 39% of the participants that fell into Generation X and 18% of the Millennial participants have a Will, well below the overall average.

The survey participants that did not have a Will gave many reasons why. The overwhelming answer was that they just had not gotten around to it. This answer was given 52% of the time. The next most common reason, given 22% of the time, was that they did not think they had enough assets to need a Will. The cost of making a Will was given as a reason 6% of the time, which was one of the least given answers.

Understanding the Power of a Will

The survey points out a major flaw in understanding the power of a Will. Most people have a basic understanding that a Will transfers assets you own when you die to the people outlined in your Will. Based on this oversimplified explanation of a reason to have a Will, it is easy to understand why younger people and people who have not yet amassed many assets misbelieve they do not need a Will. Never mind that anyone can die at any time, or that you own more than you realize and you want to have someone named to deal with all your stuff.

More importantly, anyone with a minor child should use a Will to name a Guardian for that child. Whether you are married to or divorced from the child’s other parent, naming a Guardian in case of your death is paramount. If the child’s other parent or adoptive parent is alive and still has parental rights when you die, the child stays with that parent. However, if the child’s other parent is dead or does not have parental rights, then the person nominated as Guardian in your Will is the only person that can stand up in guardianship court and definitively say that you believed your minor child’s custody should transfer to them. Then, since you are making a Will, you might as well also state who should inherit any assets you might own.

Creating a Will is a simple process when you engage experienced attorneys like us. Sometimes you know the best person to care for your child. Sometimes you need help picking between family members, or you do not have family members to choose from. We are not here to just fill out a Will form for you. We are here to help you and guide you through whatever issue is preventing you from making a Will.

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What Role Your Will Plays in Estate Planning

What is a Will Contest?

What Happens to your Digital Assets?

The Importance of Having a Will in Place

Understanding the Power of a Will

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