Just married, no kids–do we need a will?

You just got married and have no children, either together or from a previous relationship.  Do you need a will?  It depends…

If you die without a will then you died “intestate.” In Ohio, as with other states, there are statutes spelling out who gets what if someone dies intestate.  Here, a spouse would inherit everything of the deceased spouse if there were no kids.  (This does not mean there would not be probate–unless you title assets in certain ways, or set up a trust, there might be a need to probate assets.)

If you want your spouse to get everything anyway, perhaps there is no need for a will.  If you want to leave some jewelry to your sister and trinkets for your niece, not to mention a donation to your church or dog shelter, then having a simple will prepared is advised.

Once you have a child, it is imperative to prepare a will so you can nominate people you trust to serve as guardian of your child.  If you don’t name someone, a court will. In my experience the court’s likely choice would not be the person the deceased would have chosen.

Takeaway: search “intestate succession statute” for your state.  See how assets are distributed if you die without a will.  These statutes basically serve as a “will” for you.  If you do not like what your state statute prescribes, have your own will prepared.

Holding an event–waivers and releases

“I am going to plan and host a fundraiser for our child’s youth group.  We plan to have obstacle courses with adults on tricycles and other fun and crazy activities.  Should I have people sign a waiver?”

This was a real question and I’m posting it here because a lot of parents are holding events to raise money to benefit their kids’ activities.  Some activities are funded by the school, others are not and rely upon parents raising money to keep the activity going.

Waivers and releases are definitely necessary if you are holding an event where you invite people to an event where there is a risk of harm.  There is a general belief that a waiver-release provides little protection against a lawsuit by an injured party–true in some jurisdictions.  Ohio, however, has case law providing language that, if contained in the waiver-release, provides fairly strong protection.

Who does the release cover–the participant only?  (Not recommended.)  What activities are covered?  Who signs the document?  What if the participant is a minor?

Downloading a general waiver-release from a Google search might offer little protection in Ohio.  This is where contacting an attorney in your state to provide you with a state-specific document with the proper language is the best advice you can receive.

Grandparents rights in Ohio…

…are not as strong as in other states.  Custody and visitation are both permitted but both are very different in difficulty to obtain.

In Ohio for a grandparent to get custody of a grandchild, the child’s parents need to be proven unfit or unsuitable to parent.  This is a difficult obstacle to overcome and prove but can be done.  The court will make its decision of “unsuitability” based upon whether custody with the parent has an adverse impact on the child.  The court will not base its decision on whether society disapproves of the conduct of the parent–if there is no adverse impact on the child, there might be no finding of “unsuitability” of the parent.

Visitation is a different journey.  If a grandparent has had an active and involved role in a child’s life, there is a good chance that a grandparent can petition successfully for visitation rights in Ohio.  In fact, Ohio permits grandparent visitation, by statute, in three circumstances:

  1. when married parents separate or terminate their marriage;
  2. when a parent of a child is deceased; or
  3. when the child is born to an unmarried woman.

Grandparents can ask a court for visitation even after the parent’s divorce is final.  Regarding visitation, the court will make its decision based upon what is the best interest of the child.

The takeaway here is to act quickly.  Contact an experienced family law attorney in your state if you want to pursue custody or visitation rights with your grandchild.



Pets: their fate if we die?

Pets are like family.  Pictured is my boy, Bill, who is definitely part of our family.  In fact, many of my friends call their pets their “furbabies.”  What happens to them if we die?

Historically, surviving family have been in charge of deciding the fate of a deceased person’s pet or pets.  And, historically, their fate often meant being surrendered at a shelter.  Before states adopted trust codes permitting pet trusts, some pet owners would leave their pet and a sum of money for the pet’s care in their will to a trusted friend or family member.  Unfortunately, less trustworthy people would accept the bequest, then dump the pet at the shelter.

Now, Ohio and many other states have adopted trust codes that permit creating a trust for the care of a pet.  You name a caregiver to physically care for the pet, name a trustee to manage funds in the trust and serve as checks and balances on caregiver, then name who inherits the funds left in the trust when the pet dies.  As Leona Helmsley’s heirs discovered, you cannot leave an overly large amount to a pet.  A judge will find that the amount is excessive and unreasonable, such as millions left to care for Mrs. Helmsley’s small dog, and will reduce the amount.

My clients are instructed to fund their pet trust with an amount of funds that is reasonable.  To determine reasonable, figure what it costs to care for your pet–medical care, grooming, food, toys, boarding, pet insurance, among other factors. Other considerations are your pet’s age, life expectancy, health.  This calculation will be very different for a dog expected to live 10-15 years as is the life expectancy of my beagle, compared to that of a horse that could live 30 years, compared to a parrot that could live 60 years.  Also, the amount of money you should leave for the care of two dogs will be different from the amount needed to properly maintain a stable of thoroughbred horses.

If you want to plan for your pet’s future without you, contact an attorney experienced in pet trusts.  Email me for help finding such an attorney in your state, or to help you if you are in Ohio at julie@juliemillslaw.com.

Can our group hold fundraisers?

Yes.  Really, you can do anything you want.  The question is, should you?

I had a parent of a scout-like troop ask if the group should become a nonprofit in order to hold fundraisers.  The answer depends upon who the group will benefit, what does the group want to offer donors, among other considerations.

  1. A nonprofit is a state-formed entity.  To gain tax-exempt status (group does not pay certain taxes such as federal income tax; donors can take a deduction for donation on their taxes), the nonprofit needs to file for exemption with the IRS.  The typical status you see is a 501(c)(3) charity.
  2. A tax-exempt nonprofit can only be formed to benefit the public (generally).  For example, such an organization can be formed to fight childhood cancer, but cannot be formed to fund just Timmy’s cancer treatments and medical bills, even if you give away any “leftover” funds.
  3. Anyone can fundraise (note that your state’s Attorney General will want to know if you fundraise, likely regardless of whether or not you are a nonprofit, or tax exempt).  The issue is what is offered to a donor.  “Donations are tax deductible” can be offered only if you have tax-exempt status.  You could hold a spaghetti dinner to benefit Timmy above, but if you are not tax exempt, you cannot say to donors that their donations are tax deductible.
  4. Becoming a tax exempt nonprofit is not something to consider unless you are ready to essentially run a business.  You must first incorporate with your state, then apply for tax exempt status with the IRS.  In Ohio, a nonprofit must have a minimum of 3 board of directors, must file articles of incorporation, should have organization bylaws, hold regular meetings and keep corporate minutes.  A nonprofit is a corporate entity (C-corp, LLC, etc.), and by applying for tax-exempt status with the IRS, you are asking the federal government to exempt your corporation from paying certain taxes.

For smaller groups who still want to become tax exempt, the IRS has shortened their application by introducing the form 1023EZ a couple of years ago, see http://www.irs.gov.  For information on forming nonprofit organizations in Ohio, see http://www.sos.state.oh.us/sos/upload/publications/busserv/Nonprofit.pdf.  Also, read what the Ohio Attorney General has to say about nonprofits:  http://www.ohioattorneygeneral.gov/Business/Services-for-Charities.

Divorce and your will, life insurance

In Ohio, a divorce, dissolution, annulment or separation agreement will result in the revocation of parts of your will that leave property to your ex, confer a power of appointment to your ex, or name your ex as an executor or trustee, just in case my too-huge, can’t-change “Revoked” image didn’t convey this.  (This might not be true in all states, which would require you to execute a codicil to your current will, or execute a new will, to remove your ex from the will.)

Life insurance, as well as retirement plans and other assets that require beneficiary designations, typically operate outside of probate.  Who you list in your will is not as important as the beneficiary you designate on the policy’s form.  While most states, including Ohio, have revocation statutes that essentially revoke the ex spouse as beneficiary (ex is treated as having predeceased the owner), there are exceptions.

Exceptions have included post-divorce statements desiring the ex wife to remain as beneficiary on the ex-husband’s life insurance policies (an Ohio appeals court found that his intent was clear enough to show that he did not want his ex wife removed as beneficiary; had he not made these statements, his policies would have been paid to his estate and then distributed to his sons under Ohio’s revocation statute), and where federal contract law contradicts a state law’s revocation statute (United States Supreme Court held that a federal employee’s ex wife, listed as beneficiary and unchanged after divorce, was entitled to his federal life insurance benefits instead of current wife, despite state revocation statute–federal law controlled).

The take-away here is to update your estate plan and change beneficiary designations once you begin the process of divorce or dissolution.  Should you die during the divorce or dissolution process, your pending divorce or dissolution will be dismissed, meaning your documents will not fall under any revocation statute, and the terms of these documents will control how assets are distributed.  The goal with an estate plan and beneficiary designations is to leave your assets to people you choose.  With the majority of my clients, the typical scenario is “all to spouse, then to children equally.”  If you are ending your marriage, it would be a reasonable assumption that your soon-to-be ex spouse is not a beneficiary you would choose.

Kids, your vacation, and medical decision-making.

You finally have a vacation planned, and your parents will be watching the kids.  Everything on your To Do list is done, but I bet there is one thing that you did not have on your list–have a medical power of attorney prepared.  (If you have had one prepared, then my apologies for doubting you.)

What happens when your child is injured or sick and requires medical attention when you are not there?  If you are in Hawaii, and your parents are watching your children in Ohio, and consent is required to treat your sick or injured child, what is the fastest route for obtaining that consent?  It might not be calling you, or otherwise tracking you down, especially if you are snorkeling or on a helicopter getting a tour of the islands from the air.  The fastest route to getting your child treated at the hospital is for Grandma or Grandpa to pull out the medical power of attorney that you had prepared and gave to them, naming them as agents to make medical decisions for your child.

Things to consider include any treatment you object to, how long the document should be in effect, and perhaps successor agents just in case your primary agents (here, Grandpa and Grandma) could not serve.

Have your attorney prepare a medical power of attorney for you so that it complies with your state’s laws.  Having one prepared provides true peace of mind.