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Taylor was a musician. Her touring schedule kept her on the road for weeks at a time. As her success grew, so did her earnings. Before embarking on the next leg of her tour, she decided to quickly draft a last will and testament in the event something happened to her during her travels. She found a sample form on the internet and tailored it for her use. She named her new boyfriend, Travis, as the sole beneficiary of her fortunes. Her assistant tour manager was a notary public, so he notarized her signature on the document. Did Taylor properly execute her will? The answer is no (bad news for Travis). Ohio law provides that last wills and testaments must be signed at the end of the document by the testator (the person making the will) and must be attested and subscribed in the conscious presence of the testator by two or more competent witnesses. In other words, two or more people must watch the testator sign her will or hear the testator say that the signature on the will is actually hers. Then, the witnesses must sign the will under the observation of the testator. Contrary to popular belief, last wills and testaments do not need to be notarized. A notary public may serve as one of the two witnesses, however. The Ohio statute defines “conscious presence” as within the range of any of the testator's senses, excluding the sense of sight or sound that is sensed by telephonic, electronic, or other distant communication. There are many cases in Ohio in which courts have thrown out wills because the witnesses never saw the testator sign. Likewise, courts have invalidated wills when the testator did not see or hear the witnesses sign the document. Interestingly, Ohio law states that all persons are competent witnesses for wills except those of unsound mind and children under ten years of age who appear incapable of understanding what they are signing. For obvious reasons, it is best not to use minor children to witness wills in the event the witnesses must testify in court. Also, individuals who are named as beneficiaries in the will should not sign as witnesses. While it does not invalidate a will, the bequest to the witness beneficiary will be deemed null and void. While it may be tempting to create a last will and testament on your own, it may not end well. It is important to seek the assistance of an experienced estate planning attorney to make sure that the contents of the will and its execution comply with applicable law. Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

A financial power of attorney is an instrument that allows one person to act for another in financial matters. The person making the document is called the principal. The person designated to act for the principal is called the agent. In general terms, a power of attorney empowers an agent to handle everyday financial affairs like paying bills or handling banking matters for the principal. A power of attorney can also be used when a person is not able to make decisions due to mental or physical incapacities. But when does the document become effective?  The Ohio Revised Code states that a power of attorney is effective when the principal executes the document unless the principal specifically provides that the powers become effective upon the occurrence of a future event or contingency. For instance, the document may state, “the Agent’s powers shall commence and be in full force and effect upon the occurrence of my disability, incapacity, or adjudicated incompetence.” These types of powers of attorney are described as “springing” because they spring into effect at a later date. The principal may also designate in the document a person to determine whether the principal is incapacitated and unable to conduct his or her financial affairs. But what happens if the principal has not authorized a person to determine incapacity? Likewise, what if the principal did name a person to determine incapacity, but he or she is unable or unwilling to do so? In that case, Ohio law provides that the power of attorney becomes effective when one of the following people provides a determination in writing that the principal is incapacitated within the meaning of the Ohio Revised Code: (1) a physician or a licensed psychologist who has examined the principal; (2) an attorney at law or a judge; or (3) an appropriate governmental official. It is important to note that this process takes time. Most likely, a bank or financial institution will not honor a power of attorney until it is absolutely sure the agent has the power to act. In the meantime, the principal’s finances are left unattended. By making the power of attorney effective immediately, the principal can be sure that the agent may immediately and efficiently handle the principal’s financial matters. Indeed, the document can be used for convenience purposes if the principal is simply unable to leave his or her residence. When drafting a power of attorney, it is important to seek the assistance of an experienced attorney. That way, the document will clearly set forth exactly when the agent can legally assist the principal. Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

I have previously written about the duties of an executor in an estate. The administration of an estate can be quite complicated and time consuming. Generally, it includes locating the names and addresses of decedent’s beneficiaries and next of kin, filing the decedent’s last will and testament, gathering and protecting decedent’s assets, obtaining appraisals, preparing an inventory of all real and personal property, verifying and paying creditor claims, selling assets, distributing estate property to beneficiaries, filing tax returns, and following all directions and orders from the probate court. Legally appointed executors are authorized by an Ohio statute to take a commission, commonly known as a fiduciary fee, to compensate them for their efforts. Fiduciary fees are calculated upon the amount of the decedent’s personal property, funds in financial accounts, and the value of decedent’s real property. As full compensation for all ordinary services, the Ohio statute provides that an executor may receive a fiduciary fee upon the amount of all the personal property, including any income generated, and upon the proceeds of real property that is sold, as follows: (1) For the first $100,000, at the rate of four per cent (4%); (2) All above $100,000 and not exceeding $400,000, at the rate of three per cent (3%); and, (3) All above $400,000, at the rate of two per cent (2%). The fiduciary fee is calculated using the gross sale proceeds for real property and the fair market value of all other property (date of death value) as set forth in the inventory. In the event the decedent’s real property is not sold, but rather transferred to the beneficiaries directly, the executor may receive a fee of one per cent (1%) of the inventory value of real property. Executors are also allowed to charge a fee of one per cent (1%) on the value of certain non-probate assets that are not subject to the probate court estate administration. These assets include joint and survivorship property and assets that have transfer on death designations. Aside from this compensation, the executor may be reimbursed for reasonable and necessary expenditures. The statute further provides that a probate court may reduce an executor’s fiduciary fee, or deny the fee altogether, if it finds that the executor has not faithfully discharged his or her duties. The probate court may also allow a fiduciary fee that is greater than the statutory amount if an executor performs extraordinary services. In that case, the court may adjust the commission so that the total fees fairly reflect the reasonable value of both ordinary and extraordinary services. Fiduciary fees are given priority for payment in insolvent estates as an expense of administration. Even if there are not enough estate assets to pay all of the decedent’s debts, the executor will receive a fee for his or her services before funeral expenses, creditor claims, and other debts. Sometimes executors will waive compensation as the fiduciary fee ultimately reduces the amount received by the beneficiaries. However, if they decide to take a fiduciary fee, they must report the full amount received on their individual income tax return and pay taxes on it. When administering a probate estate, it is important to seek the assistance of a probate lawyer. That way, an executor will successfully navigate the challenging requirements and receive the appropriate fee for his or her services. Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

In my last article, I explained how a living revocable trust is established and managed. In simplest terms, it is a legal document that provides for the management of property upon death or disability. The main benefit of a living revocable trust is that it allows the transfer of property without a probate court administration. Not everyone absolutely needs a living revocable trust to avoid probate. However, there are some circumstances when a living revocable trust is an indispensable tool. Upon the death of a grantor, the party who established the trust, a living revocable trust become irrevocable, and its terms can protect a beneficiary’s inheritance from many situations. Underaged beneficiaries : In some cases, intended beneficiaries have not reached 18 years of age, the age of majority in Ohio. It is not advisable for minors to hold title to property and other assets without the oversight of a trusted adult. Indeed, many argue that young adults in their twenties do not have the maturity to manage assets responsibility. A living revocable trust can direct a trustee to hold assets in a separate share trust for a young beneficiary until he/she reaches a desired age. Even before the beneficiary reaches that stated age, the trustee can use the trust assets for the beneficiary’s education, the purchase of a residence, the purchase or management of a business, or for any other extraordinary opportunity deemed by the Trustee to be in the best interests of the beneficiary. Beneficiaries who don’t get along : It is not unusual for conflict to affect family relationships. Sometimes siblings are unable to work effectively together to sell a decedent’s assets. While transfer on death designations are useful to transfer real property to beneficiaries outside of probate, the title to the real property is then held by the beneficiaries together. They must then decide unanimously whether to sell, keep, or divide the real property. If they are unable to come to an agreement, the beneficiaries must resort to court litigation. A revocable living trust, however, vests the power in a trustee to sell, manage, or divide the real property for the benefit of the beneficiaries and pursuant to the exact terms of the trust. This avoids fighting and the cost of litigation. Creditor/debt problems : When a beneficiary inherits money, real property, or other assets, they are fair game to the beneficiary’s creditors who are eager to attach the inherited assets to satisfy debts and judgments. A living revocable trust can direct a trustee to hold assets for that beneficiary in a separate trust with a spendthrift provision. That way, creditors cannot demand the trustee release the assets to satisfy the beneficiary’s debt. However, the trustee can pay for the beneficiary’s ongoing bills and expenses directly, in the trustee’s sole discretion. Alcohol or substance abuse : There may be a risk that a beneficiary may use inherited assets improperly, or even illegally, to fuel an addiction. A living revocable trust can direct a trustee to hold assets for a beneficiary who is struggling with these issues and pay for the beneficiary’s legitimate expenses directly. Domestic troubles : A beneficiary may be the party to a troubled marriage or in the middle of a bad divorce. A living revocable trust can direct a trustee to hold assets for a beneficiary so they do not become marital property or subject to the claims of the beneficiary’s estranged spouse. When establishing a trust, it is important to consult with a trusted attorney to protect a beneficiary’s inheritance. Otherwise, trust assets could be lost to disputes, creditors, illegal activities, or costly litigation. Laribee Law, LLC is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

In simple terms, a living revocable trust is a legal document that provides for the management of property. It is called “living” because the grantor, the person who establishes the trust, is alive when he or she creates it. It is considered “revocable” because the grantor can amend or terminate the trust at any time during his or her lifetime. The main benefit of a living revocable trust is that it allows the transfer of a grantor’s property upon death to beneficiaries without probate court administration. A court is not involved in the inventory and distribution of assets. Therefore, the grantor’s affairs remain private. The trust avoids the time and expense usually associated with a probate estate. Living revocable trusts may also manage a grantor’s property during the grantor’s lifetime if he or she is unable to conduct their business affairs due to a medical condition or mental incompetency. The trust is controlled by a trustee. Normally, the grantor serves as the trustee while he or she is living. Couples can create a shared living revocable trust. In a shared trust, the couple usually serves as co-trustees. The trust can provide that either grantor may conduct trust business. The grantor most often names successor trustees to take over trust responsibilities when the grantor dies or in the event the grantor becomes incapacitated. Successor trustees can be spouses, children, or professional trust companies. The trust sets forth how much the successor trustee may charge for his or her services. A living revocable trust can hold title to real property, bank accounts, vehicles and equipment, stocks, and brokerage accounts. Grantors may also name the trust as a transfer on death beneficiary on life insurance policies or retirement accounts. Living revocable trusts are very flexible. The grantor can add or withdraw property from the trust at any time. Normally, real property is transferred into the trust by a quit-claim deed. Bank accounts and brokerage accounts are easily updated to title the account in the name of the trustee. The grantor does not lose control of the trust assets. They are still considered the grantor’s legal property. The trust does not require a separate tax identification number. All trust accounts will reflect the grantor’s social security number. Therefore, the grantor will not have to file a separate tax return for the trust. All interest income or dividends earned on trust property are reported on the grantor’s individual tax return. When establishing a trust, it is important to consult with a trusted attorney to make sure that it is drafted properly and specifically tailored to the needs of a grantor. That way, the grantor’s assets will be administered smoothly and efficiently upon death or incompetency. The attorneys at Laribee Law, LLP are here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

A trustee has a unique responsibility to trust beneficiaries when handling trust assets. Generally, a trustee must exercise the care, skill, and diligence of a person of ordinary prudence dealing with the person's own property. Trust agreements often grant trustees the power to invest trust assets to grow the principal and to provide income for the beneficiaries. However, when faced with a volatile stock market, a trustee must act carefully to avoid loss. The Ohio Uniform Prudent Investor Act provides direction and requirements for trustees. The Act governs trustees who serve testamentary trusts (those administered under supervision of a probate court) as well as inter vivos trusts (those administered with no probate court supervision). Trustees must exercise reasonable care, skill, and caution and may utilize a wide range of investments including bonds (U.S., state, county, municipal, and school district), stocks and securities, promissory notes, life insurance and annuity contracts, and certificates of deposit. Trustees must diversify the investments across different sectors and markets to limit risk and decrease the chances of losing money. However, the Act recognizes that there may be special circumstances when a trust is better served without diversifying, but this is rare. A trustee's investment and management decisions are evaluated by viewing the trust portfolio as a whole. The overall investment strategy should have risk and return objectives reasonably suited to the trust. The Act provides several circumstances that a trustee must consider in investing and managing trust assets: 1. The general economic conditions; 2. The possible effect of inflation or deflation; 3. The expected tax consequences of investment decisions or strategies; 4. The role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property; 5. The expected total return from income and appreciation of capital; 6. Other resources of the beneficiaries; 7. Needs for liquidity, regularity of income, and preservation or appreciation of capital; 8. An asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries. It is important to note that the terms of a trust document will supersede the requirements of the Ohio Uniform Prudent Investor Act. In other words, the trust may direct the trustee to make certain investments that may be speculative or risky. A trustee will not be held liable for losses as long as the trustee acted in reasonable reliance on the provisions of the trust. When administering a trust, it is important to consult with a trusted attorney to understand all of the duties and requirements involved. That way, trust assets will provide their intended benefits to the trust beneficiaries. The attorneys at Laribee Law, LLP are here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

I have written before about the importance of discussing funeral arrangements with family and loved ones. There are many different funeral options, some of which are quite personal. Some can be very expensive. Will you be buried or cremated? What kind of casket and vault will be used? Will there be a public memorial or a private service? Where will you be buried? If you are cremated, what happens to your cremains? Ohio law provides a specific method for people to direct the disposition of their bodies after death. They may execute a written declaration that appoints another person the right to determine the location, manner, and conditions of the disposition of their bodily remains. This includes arranging funeral services and purchasing funeral goods for burial, cremation, or other manner of final disposition. But what if someone dies without making such a declaration? An Ohio statute provides a list of people who have the power to make funeral decisions in this instance. They are set forth below in order of priority: (1) The decedent's surviving spouse; (2) The sole surviving child of the decedent or, if there is more than one surviving child, all of the surviving children, collectively; (3) The decedent's surviving parent or parents; if a parent was the residential parent and legal custodian of the decedent at the time the decedent reached the age of majority, that parent's right takes precedence over the other parent; (4) The decedent's surviving sibling, or if there is more than one sibling, all of the surviving siblings, collectively; (5) The decedent's surviving grandparent or grandparents; (6) The decedent's surviving grandchild, or if there is more than one surviving grandchild, all of the surviving grandchildren collectively; (7) The lineal descendants of the decedent's grandparents; (8) The person who was the decedent's guardian at the time of the decedent's death; (9) Any other person willing to assume the right of disposition, including the personal representative of the decedent's estate or the licensed funeral director with custody of the decedent's body; and, (10) If the decedent was an indigent person, the public officer or employee responsible for arranging the final disposition of the remains of the decedent. It is important to discuss funeral preferences when putting together an estate plan. Laribee Law, LLP can provide valuable guidance. That way, family and loved ones are not forced to make complicated decisions during a difficult time of grief and mourning. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights