Legal Paperwork Cheatsheet: A Guide to the Top 10 Must-Have Documents

Whether you own a little or a lot, the last thing you want to do to your loved ones is leave a bureaucratic mess after you pass away or become incapacitated. Aside from mourning your passing or a significant deterioration in your health, this will cause the family additional stress. Heirs may forfeit life insurance payouts, tax deduction advantages, or miss accounts they did not know existed. This is why it is key to have your estate plan in place before life circumstances get the best of you.

In order to avoid problems, below is a list of ten documents you should start preparing right away to ensure you have a solid estate plan in place and your heirs are protected.

  1. A will: This is a legal document that states your final wishes in the event of death or incapacity.  In this document, you name an executor to carry out your final wishes, heirs to receive assets from your estate, and a guardian for any minor children you may have.
  2. A trust: This is a legal agreement between you (grantor or trust maker), the manager of your assets (trustee) and those who benefit from the trust (beneficiaries). Your assets are put into the trust and managed by the trustee on behalf of the beneficiaries, according to the terms you put in the trust document. All living trusts are revocable (can be easily changed) or irrevocable (cannot be easily changed) and are created and go into effect during your lifetime.
  3. Personal inventory: Because most wills distribute property in terms that are general, it is important to create an inventory of your personal items to ensure nothing is overlooked and to let family members know if some items are stored in another location. You should include collections, any valuable property, as well as stories regarding family heirlooms.
  4. Power of attorney: This document is essential if you become incapacitated as a result of an accident or illness, because it allows a named person to make key decisions on your behalf regarding your finances and/or health care.
  5. Final wishes: This is particularly important and should include information regarding any pre-arrangements you have made for a funeral or cremation, organ donation, pet care, and who should be notified when you pass away.
  6. Identifying paperwork: These critical documents should be in kept in a safe place, and it would be a good idea to have a copy of each one. These include birth certificates, passports, marriage certificates, immigration papers, and other identifying documentation.
  7. Financial account list: Put together a list of all of your financial accounts. These should include any of the following: checking, savings, money markets, certificates of deposit (CDs), investments, annuity, retirement, pension, etc.
  8. Digital asset list: While software can be useful in keeping track of your digital assets, change of service terms can make this difficult. Instead, keep really important images or messages backed up and saved in a place where your family can access them (and know where to find them);
  9. Business ownership documents: If you own, owned, or are buying a business, you should keep all associated paperwork in a safe place. Documents should include, but may not be limited to, buy-sell agreements, stock certificates, LLC shares, operating agreements, corporate minutes, etc.
  10. Past tax returns: At a minimum, you should keep the last three years of tax returns and supporting documentation; if you want to be really careful, keep the seven most recent years.

If you have any questions about these important documents, or planning for your family’s financial security once you are gone, contact McCarthy Law Office today.

How to Talk to your Parents about Creating an Estate Plan

Conversations about death and dying are rarely fun. Most people avoid them because they invoke feelings about our inevitable demise. Broaching this subject can be particularly difficult for parents and their adult children. Adult children may avoid bringing up the topic because they do not want to think about their parents’ mortality, and they may also want to avoid sounding as though they are waiting for their parents to die.

Despite these valid challenges to having conversations about death and dying, you should not avoid the topic. Your parents will die at some point, and having a plan to care for their money and property when they pass away will preserve their legacy and help them care for those they love most. Having this difficult conversation will also ensure that your parents have a voice regarding their end of life or when they can no longer make financial or medical decisions for themselves. Due to advancements in technology, these conversations are increasingly important because more people are likely to experience a time when they are still alive but unable to make decisions for themselves. In the absence of conversations about these scenarios and a legal delegation of decision-making authority, state law governs what happens. Those default rules may not reflect your parents’ wishes. In addition, failure to have your parents’ wishes properly documented may result in their heirs having to engage in expensive and time-consuming court processes.

Once you understand the consequences of not having those conversations, the next question is how do you raise the issue with your parents? There are a number of different approaches, though no particular one is necessarily better than any other. The following are some key ideas to keep in mind if you want to have this conversation with your parents.

  • Do not nag. If you are trying to persuade your parents to talk about completing an estate plan, the last thing you want is to make the process and yourself an annoyance. Instead of engaging in a productive conversation, you may inadvertently create an atmosphere where your parents start avoiding you or become suspicious of your motives. If your parents hesitate to have these conversations, explore ways to bring up the topic without leaving them with their guards up.
  • Be open and honest about your concerns. Being truthful about your worries is a significant challenge when discussing what will happen to your parents when they die or if they lose the ability to make decisions for themselves. Every family is imperfect, and oftentimes, areas of concern indicate delicate family situations. To facilitate the best conversations about estate planning and to achieve effective planning for your parents and their legacy, you must address the awkward family issues. You must ask the difficult questions now, when your parents are available to provide their insights.

Also, it is essential to have all the necessary parties, such as siblings, stepchildren, new spouses, and former spouses, involved. As your parents embark on these conversations, let them know that you support them. Prioritize understanding their wishes and helping them to protect those desires.

Ensuring that all the parties involved are in generally good health is another consideration. Having these conversations after someone’s health is compromised may result in decisions that are not considered objectively. In those situations, attempts to think deeply about a plan for what happens to your parents, their property, and their legacy, may be blurred by concerns regarding their health.

  • Ask your parents what their wishes are. Find out what your parents want and hope for with regard to estate planning. Do not make assumptions. Be direct and ask them what their ideal situation is. What they say may surprise you. Even if you have had no previous conversations of this nature with them, that does not mean they lack a clear idea of how they see things occurring in the future. The problem is that they may not have the plans in place to realize their vision. Asking them about what they want brings them one step closer to making their vision a reality.
  • Discuss the planning already in place. In many cases, parents do some estate planning when they start their family and never update it. Therefore, your parents may have some documents about what should happen if they can no longer make decisions for themselves or if they die, but the documents are no longer relevant because they do not address the changes that have occurred in the family over time. As a result, asking them about what they have done in the past is a critical component of having an effective conversation with your parents. Specifically, ask your parents if they have any of the following documents—and if they do, the documents should be reviewed
    • past wills
    • past trust documents
    • powers of attorney
    • HIPAA authorization forms
    • insurance policy and retirement plan beneficiary designations
  • Include benefits to their children and grandchildren. Finally, addressing how your parents will build their legacy through their children (you and your siblings) and grandchildren is critical. A common sentiment among grandparents is that grandchildren are their reward for not letting their children drive them crazy, so they often have a significant desire to provide special allocations for their grandchildren. The form and method require serious consideration, given the unique dynamics between children and grandchildren. Explore how your parents want their money and property distributed and whether your childless siblings will receive less. Again, navigating this area requires great tact and wisdom.

If you approach your parents about end-of-life planning and you can all have clear conversations about the topics addressed above, you will be establishing the right foundation for effective estate planning. 

You Do Not Have to Do This Alone

If you feel overwhelmed by the steps discussed above and you would like a neutral party to help facilitate the conversation and provide guidance regarding how the estate planning system works, McCarthy Law Office is available to help. Call our office to schedule a virtual meeting with us to begin the process.

Use Your Covid Relief Payment to Plan your Family’s Future

President Biden signed the American Rescue Plan on March 11, 2021. The money has already started to go to those taxpayers who use direct deposit. Money will continue to be distributed in the coming weeks and months. Now is a great time to scratch estate planning off your to-do list and protect your family’s future.

The nearly $1.9 trillion relief package includes the following:

STIMULUS CHECKS

  • $1,400 per individual earning up to $75,000.
  • $2,800 for married couples earning up to $150,000.
  • $1,400 per child if you qualify.
  • Payments decline above these thresholds and phase out entirely above $80,000 for individuals and $160,000 for married couples.

CHILD TAX CREDIT EXPANSION

  • Temporary boost to $3,000 credit per child, or $3,600 for each child under 6.
  • Credit boost begins to fade out for individuals earning more than $75,000 per year, or $150,000 per year for married couples.
  • Families who are not eligible for the boost will still be able to claim the normal $2,000 credit per child.

FEDERAL UNEMPLOYMENT BENEFITS

  • $300 per week boost to unemployment benefits through Sep. 6, 2021.
  • The first $10,200 of unemployment benefits are exempt from taxes.
  • Applies only to households with incomes under $150,000.

The Rescue Plan also included money for vaccine production and distribution, housing aid, health insurance subsidies, Medicaid expansion, aids to states and local governments, and aid to help safely reopen schools.

ESTATE PLANNING IN CINCINNATI

Contact McCarthy Law Office to schedule an appointment to discuss your family’s estate planning needs by telephone 513-815-7006 or by email mccarthy@danmccarthylaw.com

 

 

 

What Can Happen to Your Business When You Die or Become Incapacitated

Preparing your company for your incapacity or death is vital to its survival. If you have not planned appropriately, your business can be disrupted, harming your customers, employees, vendors, and ultimately, your family. For this reason, proactive planning – including your business and your estate plan – is key. Below are some issues you may encounter if you haven’t planned and tips on how to protect your company and keep the business on track and operating day-to-day in your absence.

  1. Your Business May Shut Down

What happens if a business owner dies without a plan in place? Or, the owner of the business is in a coma because of a car wreck and unable to run the business?

It is entirely possible that the business could close with nobody to take care of day to day management. Even if a family member or trusted employee knows what’s needed they may not have the authority to take some actions. Legal documents and bank accounts may not be accessible which could put operations at a standstill. Third parties may not be willing to work with those who try to step in to run your business.

Also, the business could be tied up in a court process lasting months, potentially further disrupting business operations.

  1. Valuable Business Information May be Exposed to the Public

If you have not planned or even if you have planned, your ownership interest in your business may be subject to probate court. This means that the public, including business competitors, will be able to see the value of your interest in the business as well as that of other property. What if you family needs to sell the business quickly? Potential buyers now have valuable information with which to better negotiate buying the business from your family.

  1. Prepare for the Unexpected

Small business owners are often extremely busy focusing on building the company and keeping it running on a daily basis. It can be really hard to get their attention to address certain issues that can greatly affect the business – death and incapacity. But not addressing these issues may jeopardize the business you worked so hard to build. Younger business owners tend to think it will be many years before they have to worry about these matters but the fact is that this can happen to any of us at any time. The right plan can help keep your business running regardless of what happens.

Not only should you have the proper business documents in place, like an operating agreement and a buy-sell agreement, but the right estate planning documents can be just as important.

  1. Contact an Estate Planning Attorney

Having a plan for your business in the event you are unable to continue managing the company is essential to keep the company operating. An attorney can explain the options you have to protect your company so that you can focus on what you do best – running your company. Contact McCarthy Law Office today to get started protecting your business.

What is my Car Accident Claim Worth?

A serious car collision can upend your life in the blink of an eye. Before accepting a settlement from an insurance company, it is important to maximize your compensation. Such compensation should cover all of your damages, both economic and non-economic. What is the difference?

ECONOMIC DAMAGES

Economic damages can be calculated with a dollar figure and supported by hard evidence. There is no cap on recovery of economic damages in Ohio. Examples include:

  • Medical bills
  • Lost wages
  • Lost earning potential

NON-ECONOMIC DAMAGES

Non-economic damages are more difficult to quantify. There is not typically a hard dollar figure that can be directly assigned to such a loss. Further, Ohio has a statutory limit on the amount of non-economic damages an injured party can receive. Examples include:

  • Pain and suffering
  • Mental anguish
  • Loss of family relations (also known as loss of consortium)
  • Physical impairments
  • Loss of quality of life

It is difficult to predict the value of a particular claim without knowing all of the information, including all economic and non-economic damage losses. If you have been injured by the negligence of another driver, contact McCarthy Law Office for a free consultation to discuss your clam.

Cincinnati Personal Injury Attorney

 

7 Reasons Why You Should Not Write Your Own Will

Perhaps you have seen pop up ads on your browser. Or heard ads on the radio or streaming service. Should you just go ahead click the link, then make your own Will online? Is a basic, cookie-cutter Will sufficient for your family? There are certainly enough options available these days if you want to try to create your own documents. But should you?

Here are 7 reasons why you may want to consult a professional:

1.      A DIY Estate Plan Could Contain Inaccurate, Incomplete or Contradictory Information

If you attempt to create a Will using an online questionnaire, there is a very real possibility that you may select the wrong option or leave out important information that could prevent your Will from accomplishing your goals. If the service allows you to insert custom wording, you may enter provisions that conflict with other provisions in the Will.

You could actually be making things worse than if you did nothing at all.

2.      Mistakes in Signing the Documents Render it Worthless

Formal requirements must be met for Wills and other estate planning documents to be legally valid. For example, you actually have to sign it!  I have met with clients who thought they had a valid Will they created online, only to find that they never actually signed the Will.

In addition, a Will requires two witnesses. However, only certain people should serve as witnesses. Several years ago, I met with clients who, rather than two witnesses, signed their Will before one notary. That is not sufficient under Ohio law. Another client had his children serve as the witnesses.   The online service cannot properly sign your documents; you’re on your own.

Will you have your documents signed properly?

3.      Your DIY Estate Plan May Not Account for Changing Life Circumstances

For example:

  • If you create a Will in which you leave everything to your two children, what happens if one of those children dies before you? Will that child’s share go entirely to his or her sibling—or will it go to the child’s children?
  • What if one of your children has creditor issues? Is it okay with you if the money or property the child inherits is vulnerable to claims of the child’s creditors?
  • What if your Will states your daughter will receive the family home as her only inheritance, but it is sold shortly before you die? Will she inherit anything?

4.      Assets May Be Left Out of your Estate Plan

Many people do not realize that a revocable trust can be a better estate planning tool than a Will for a variety of reasons, like incapacity planning and probate avoidance.

Even if you have created a DIY trust, if you do not “fund it” (i.e., transfer title of your money and property into the name of the trust) it will be ineffective and your loved ones will still have to deal with the probate process to finish what you started. Also, you must continue funding it throughout your life as you acquire more assets.

If it’s not funded, what did you pay for?

5.      A DIY Plan May Not be Coordinated with your Other Assets

Clients overlook the fact that not everything passes according to what your Will or Trust says. In general, things like retirement plans and life insurance policies pass outside your Will and go straight to the persons named on the beneficiary form. But, these assets need to be coordinated with your Will or Trust.

Are your retirement plans, life insurance policies and annuities coordinated with your estate plan?

6.      It’s Misleading

The problem is that the general public seems to view online services as an adequate substitute for an attorney and so is led to believe that you’re getting pretty much the same thing for a cheaper fee.

One online service asks you a series of questions to answer and then spits out a document. But, they also have the following disclaimer –

“We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal …. options, selection of forms or strategies.”

Clients want peace of mind. That disclaimer does not give me any peace of mind that my online documents are legal and properly crafted.

7.      When Will Mistakes Be Discovered? 

There are many DIY matters where the consequences, if done wrong, are not that significant.

However, with estate planning, most of the time it’s not until AFTER someone dies that the mistakes are discovered – pretty difficult to make corrections after the person is dead!

How Do You Know If You Did It Right?

What Are the Consequences If you Do It Wrong?

We Can Help

A DIY estate plan can lead to a false sense of security because it may not achieve what you think it does. If your DIY Will is not valid, your property and money will go to your heirs specified by Ohio law—who may not be the people you would have chosen. Banks may not accept a generic power of attorney you found on the internet. Laws affecting your estate plan may change.  Trying to go it alone may actually do much more harm than good. We are here to help and give you peace of mind. Call, text, or email to schedule an appointment to get started on your family’s plan.