A New Year, Time for a New Career?

One topic being discussed often–maybe more often–lately is career change. The conversation typically centers around how your job and life has changed due to COVID (working from home has you thinking about wanting to do it permanently, or you realize during a pandemic that life is short and you are unhappy doing what you are doing) and then the article spotlights what changes others have made. Change often includes starting a business. One woman seems to be experiencing six-figure success with her new goat yoga venture!

If you have decided that you want to change your work life by opening a business, I applaud you. The majority of my entrepreneur clients who left their jobs to pursue an entrepreneurial path have few regrets. If you live in Ohio, see my blog post on what you need to know to start a business in Ohio. If you would like to discuss what is required to start a business in Ohio, please reach out to me at julie@juliemillslaw.com. And, check out my other related blog posts, at https://lawthingsfamily.wordpress.com/, search “Business.”

Advice for the End of a Not-So-Normal Year–Review your Will, Trust, Healthcare Documents

In a “normal” year it would be good advice to suggest that you review your estate plan, which could be your will, your trust if you have one, your healthcare documents, among other documents, at the end of the year.  With 2020 and what is not a “normal” year, this advice takes on more meaning.  Not surprisingly, much of the advice given in my blog post is due to the COVID-19.  Generally, COVID-19 or not, you should review your estate plan each year. 

Reason #1: Things Change

Our assets and family dynamics change over time. This is inevitable and applies to everyone.  Review how your assets might have changed and see if the changes are covered in your documents.  Did you move, and deed your new house to your trust?  If family dynamics have changed, did you check to see if your will needs changed also?  The biggest change would be divorce, and while some documents treat your ex as having predeceased you, some will still treat him or her as a beneficiary if the former spouse is not removed from the document.  Other dynamics that might affect your choices are the death of someone you’ve named as a beneficiary or as a fiduciary (such as an executor of your will); the birth of a child or grandchild; the divorce of others such as the guardians you have named for your children. 

The pandemic has created several changes for many of my clients, particularly the composition of households. Now, households are accommodating the needs of elderly family members moving in rather than moving into assisted living, college kids attending school from home, and other changes.  These changes can affect who you choose to list as a power of attorney now that some family members might be living closer or further away, how you structure what happens to your house if you die since your household might include parents or others who might wish to remain in the home. 

Another change is the law, specifically the SECURE Act.  Your 401k or IRA will be affected by the SECURE Act, it is just a matter of “how.”  The Act significantly changed the timing of distributions for inherited IRAs and changed rules regarding your beneficiaries.  Check to see who is listed as beneficiary and whether that should be changed, whether a conduit trust is still beneficial, and other considerations.

Reason #2:  New Considerations for Healthcare Documents

The pandemic has created new considerations that might affect your thoughts about your healthcare documents, specifically, your living will (whether you want artificial life support or not) and your healthcare power of attorney.  These are critical documents that are necessary in managing your medical affairs should you become sick or incapacitated.

First, consider who you have listed in these documents to make decisions for you.  Generally, people listed should be able to be “bedside.”  You might have listed your brother across the country as your healthcare power of attorney, but will he be able to travel to get to you?   Would a trusted friend or other family member who lives close to you be a more appropriate choice during a pandemic when there are greater restrictions on, and requirements prior to, travel?

Second, clients have expressed concern regarding their living will and whether the fact that they state “no artificial life support” means they will not be put on a ventilator if they need one, if diagnosed with COVID-19.  The Ohio living will document states that, if death is only being prolonged by someone in a terminal condition or permanently unconscious state, then two physicians can determine to end artificial life support, or “pull the plug.”  With COVID-19, a ventilator is used as a course of treatment, not to prolong death, and will be used to treat you.  The living will document does not prohibit artificial means for breathing or keeping someone alive; rather, the document reflects your wishes to permit doctors to cease using artificial life support if no reasonable course of treatment will help and death is simply being prolonged. 

Conclusion:

It is a gift to your family to plan what you wish to happen if you are unable to take care of your medical or financial affairs, and to plan what you want to happen to your assets when you die.  I hear so often about how difficult these decisions are for family to make during a period when they are grieving your death, or scrambling to figure out how to pay your bills if you are incapacitated.  The pandemic might have many people wanting to discuss anything but death and incapacity, but it has also forced everyone to consider “what if?” with their own mortality, and consequently their family’s future. 

If you would like to discuss wills, trusts, healthcare documents, or any estate planning questions, feel free to email me at julie@juliemillslaw.com.  I am happy to help you plan and prepare.

Happy “National Mutt Day”!

December 2nd is recognized as #National Mutt Day, a day all about “embracing, saving and celebrating mixed breed dogs.” My boy Bill (pictured), is beagle-mix and has been embraced and celebrated since the day we rescued him.

Our pets are family. As with family, we want to make sure they will have what they need should something happen to us. As an attorney experienced in pet estate planning and who is involved in animal welfare organizations, I have seen pets taken to shelters after the pet’s owner dies because surviving family don’t want the pet, and no plan was put into place to care for the pet. Providing for your pets now, through a will or trust, will ensure that your pet goes to someone you trust instead of a shelter.

Check out my previous blog post on pet estate planning, What happens to my pet if I die? to see how you would plan for your pet, then contact me to get started at julie@juliemillslaw.com.

Congratulations on your new business! And get ready for the scams.

As an attorney I get numerous “Congratulations, you are a distinguished attorney on our Super Special Attorneys List and for only $200, you get a certificate to hang in your office. For an additional $200, we will frame your fancy certificate in a gorgeous pressed wood frame!” It’s a scam. This scam typically targets people who are listed in publicly-searchable databases, such as attorneys, teachers and others.

Other scam targets are businesses who register or become approved or licensed where the license is public, such as registering in Ohio with the Secretary of State when you formed your business. Databases are searched regularly for targets. An example is the picture below in this post. It certainly looks official, and the Ohio Secretary of State, not amused, has been trying to put a stop to these scams. “OH Certificate Service” is a fake business that implies by this document that you must apply to get your business’s Certificate of Good Standing (Certificates of Good Standing are real–you obtain them to provide to lending institutions and for many other needs). This will cost you only $67.50. The problem, however, is that you obtain a Certificate of Good Standing from the Ohio Secretary of State–the same agency where you applied to become a entity such as an LLC– and the cost is $5.

I received a call from a client who had a feeling something was not right with the letter she received (pictured), but wanted to check with me to be sure. Fortunately she checked before paying $62.50 more than she needed.

If you are required to complete an application, or purchase a certificate, you will likely receive information from the agency in question. If you are ever in doubt, contact your attorney, or the agency.

Landowner liability–are you liable for injuries?

Your neighbor’s child starts exploring the old rusty truck you have had in your back yard and gets hurt. Or a child decides to explore the swimming pool on your property and is injured, or drowns. If a child is hurt in either of these (or other) instances, are you liable for the child’s injuries or death? In short, the answer in Ohio is likely “yes.”

Ohio adopted the “attractive nuisance doctrine” in 2001, which means that landowners might be held liable for injuries to children trespassing on their land if the injury is caused by a hazardous object or condition that is likely to attract children who are unable to appreciate the risk. The law is intended to protect trespassing children from dangers that, due to their youth, they cannot understand.

The Ohio Supreme Court noted when it adopted the attractive nuisance doctrine that landowners could be liable for injuries to a trespassing child if they created a dangerous condition and knew, or should have known, that the condition posed an unreasonable risk of serious harm to children. The point in adopting the doctrine was, according to the Court, to protect children, holding that young children are entitled to a degree of care “proportioned to their inability to foresee and avoid the perils that they may encounter.” The doctrine does not create automatic liability even if there is an attractive nuisance on the property. Specific facts of the situation matter.

The doctrine will impose liability only if: 

  1. there is an artificial condition on the property (which could include abandoned cars, swimming pools, play equipment, hot tubs, ramps, machinery, electric fences, water wells);
  2. the artificial condition could pose an unreasonable risk of death or serious bodily harm to children;
  3. the landowner knew or had reason to know that children are likely to trespass and that, because of their youth, they could not discover or appreciate the risk involved;
  4. the benefit to the landowner of keeping the condition is slight when compared with the risk to children; and,
  5. the landowner failed to exercise reasonable care to eliminate the danger or otherwise protect children.

The attractive nuisance doctrine does not apply to adult trespassers, since they can recognize risk. However, in situations where an adult trespasser is trying to rescue a child from danger created by the landowner’s negligence, then the doctrine (and liability) could apply.

What should you do if you are aware of young children trespassing on your property? It is best to consult an attorney or ask local law enforcement for steps to take. Putting up “No Trespassing” or similar signs will not protect you if the child is too young to read. Other steps you might take could indicate your awareness of the trespassing, which could increase your liability. Contact me at julie@juliemillslaw.com if you have any questions about your property and responsibility.

Why–or why not–purchase a home using a “land installment contract”?

For most people I know, they got a mortgage to purchase their house. A mortgage is a loan from a lender (usually a bank, but increasingly lenders are not banks) that you pay off–a debt instrument–secured by collateral, which is the house (this is the simplified definition). With a land installment contract you can avoid much of the hassle of being approved by a lender, and there is a lot more flexibility for the buyer and seller. These benefits also mean that there are fewer protections, and often to the detriment of the buyer.

A land installment contract is a private contract for the purchase of real property. The seller retains ownership of the property until the purchase price is paid in full. The buyer retains possession of the property until the last payment is made and does have a recorded equity interest in the property. For the buyer, there is no need for lender approval, no (or lower) closing costs, interest can be deducted like regular mortgage interest, and greater flexibility (if the seller is willing) for payments, pre-payment options, improvements.

For the seller, the sale can be quick, more flexibility with contract terms since there will be a private contract with the buyer, and if the buyer defaults then the process to regain possession of the house is quicker and less expensive than foreclosure.

There are downsides for both buyer and seller. Buyer does not own the property until all payments are made, and in the event the buyer defaults then all payments made are sacrificed. For a seller, a land installment contract is typically an ongoing obligation that could last decades, and the property remains in Seller’s name for years with someone else occupying it.

A land installment contract can be an attractive alternative to a buyer or seller of real property, that offers more flexibility. With more flexibility comes less protections that must be considered carefully.

If you have questions about land installment contracts feel free to email me at julie@juliemillslaw.com.

Will you have to pay your parent’s nursing home bill?

I have written before on how common it is for family members to unwittingly make themselves liable for a nursing home bill when they sign admission papers for a loved one going into a nursing home (“Has a nursing asked you to sign?”). Although it is against the law (42 C.F.R. 483.15(a)(3)) to require a 3rd party to take financial responsibility for the bills of a nursing home as a condition to admitting that person into the facility, it happens frequently. Mom is sitting there, about to move into the facility, Daughter is with the admissions employee who is asking her to “sign here” so Mom can move in. I had it happen to my family member, and I’ve represented clients who signed as a “Family Representative” only to discover they actually signed to accept financial responsibility for all outstanding nursing home bills.

A recent Ohio case finally sheds some light on the law and specific steps that might instruct how to avoid becoming liable for a loved one’s nursing home bills. The case is Village at the Greene v. Smith, 2020-Ohio-4088, and I’ll summarize here how it is applicable to readers facing the possibility of helping a family member or loved one move into a nursing home.

Despite it being illegal, many nursing homes have provisions in their admissions agreements where the accompanying family member (or sometimes a family friend) signs as “Family Representative,” or “Responsible Party” described as someone who agrees to “secure financial information such as Medicaid and Medicare.” These agreements typically include third-party guarantor, or personal guarantee, language. If you sign as the “Family Representative” when you are admitting your mom, or dad, or whomever, into the facility, you’ve likely agreed to be responsible for all unpaid nursing home bills.

In the Village Green case above, Son accompanied Father to the nursing home when he was being admitted. Son correctly refused to sign in his individual capacity, as Family Representative or any other form. Son did sign, however, in his capacity as Power of Attorney for his father. Essentially, he signed on behalf of his father. This would look like “John Doe, POA for Dave Doe” or power of attorney, or agent, etc., instead of signing as just “John Doe.” Eventually Father died and had unpaid nursing home bills, where the nursing facility then brought suit against Son. The appeals court determined that Son, who signed as power of attorney for Father and did not sign in his individual capacity, could not be held liable for his father’s unpaid nursing home bills.

ADVICE

  1. Do not sign your name anywhere on a nursing home admissions agreement, or any additional or ancillary paperwork, unless you are certain it is for contact purposes only. See #3 below.
  2. If possible, have the person being admitted sign the document. If the person is competent but simply physically unable to sign, they can sign an X or something indicating signing. If this isn’t possible, try to have had a power of attorney prepared prior to admission into the nursing home. If you do this, then sign everything as power of attorney. “Jane Doe, POA.” This includes email signatures: “Thank you for the update. Jane Doe, POA.”
  3. If you don’t have power of attorney, and find yourself in a position where you are being asked for your signature and given assurances that you won’t be held liable, write after your name “My signature is not a personal guarantee for financial responsibility.” Get a copy immediately of the signed document, and note the name of the person who told you that you would not be held liable financially. In the situation with my family member, he was told by the admissions employee that “Oh, this is just a formality so we have a family member to contact. We never pursue payment.” Yes, the nursing home pursued the five-figure payment.

Helping a parent or family member through the nursing home admission process is stressful and emotional. Don’t set yourself up for future stress by unknowingly agreeing to be financially responsible for the nursing home bill. Unwinding yourself out of liability can be nearly impossible, and it is far better to not incur liability from the start.

Your role as trustee of a trust

You have been named Trustee of someone’s trust. Here is a very basic overview of your responsibilities as trustee, under Ohio law.

The person who made the trust–the “Grantor,” or some people use “Settlor”–must have thought of you as a responsible, trustworthy person to designate you as Trustee of this person’s trust. The trustee has many responsibilities in managing and administering a trust, and shoulders some personal liability as well. If the Grantor has died and you are the first successor trustee, this list will provide you with a basic understanding of what you need to do. You have many responsibilities, and my advice is to seek legal counsel with an attorney experienced in trust administration.

  1. Again, meet with an attorney unless you are familiar with the Ohio law. A trustee has 60 days to inform beneficiaries of the existence of the trust. Sixty days from what date? Who falls under the definition of “beneficiary,” and are all beneficiaries created equal? Do I send the entire trust, and only if a beneficiary asks for it? Know the answers to these and other responsibilities with keeping beneficiaries informed.
  2. Gather all of the decedent’s estate plan documents, 10 copies of the death certificate, and the previous 3 years (if possible) of tax returns. Gather together other important documents.
  3. Read the trust document. Make a list of the beneficiaries, distribution ages, charities named, any restrictions made by Grantor. Son might get a distribution, but does he need to pass a drug test first? Does Daughter receive an increased distribution if she makes certain grades in college?
  4. Determine assets that are held by the trust and get date-of-death values. Deeds to property will show if the property is held by the trust, as will titles to cars and boats. Review all assets with beneficiary designations to see if the trust is a beneficiary, such as IRAs, life insurance, payable/transfer on death bank accounts, stocks and bonds. Also look for shares in any business interests such as LLCs, corporations, partnerships.
  5. Determine if probate will be necessary. For most of my clients, a reason for having a trust prepared is the desire to avoid probate. The trust is then “funded” by deeding property in the name of the trust, or re-titling assets into the trust’s name. Sometimes people forget to change ownership of an asset such as a checking account or real property to their trust, or die before getting the chance to. Probate then becomes necessary to transfer ownership for those assets.
  6. Once you know what assets the decedent owned and their values, pay all bills owed. Before you sit down and start writing checks to creditors, be sure that the bill is legitimate.
  7. Get a CPA. The decedent might have died before paying taxes and you, Trustee, will need to file the decedent’s final tax return. Some trusts have to file tax returns. Consult a CPA to determine what, if any, taxes are owed by the decedent, the decedent’s estate, and possibly the trust.
  8. Distribute assets, terminate the trust. The distribution of assets comes *last.* After all bills are paid, tax returns filed and taxes owed are paid, and after probate closes if probate is required, then the trustee can distribute assets according to the terms of the trust. Once the assets are distributed, or if the trustee determines that the value of assets in the trust is low enough that it makes administration of the trust impractical, then the trust can be terminated.

A trustee can shoulder personal liability for improperly administering a trust, so consult with an attorney and a CPA if you are not familiar with the Ohio Trust Code and trust administration. The list above is a basic overview and is not legal advice. If you have questions about your role as a trustee, contact me at julie@juliemillslaw.com, or visit http://www.juliemillslaw.com for additional resources.

The Estate Plan List (to get you started)

Will

Do you have a will?  If yes, is it up to date with people you chose to serve as executor and guardian?  Do you want to add or remove any beneficiaries?

Financial Power of Attorney

Do you have a durable financial power of attorney that names trusted people to take care of your financial matters if you are unable to?  How will your bills get paid if you are in the hospital?

Living Will

A living will is a healthcare document that details your end-of-life decisions.  Do you want to be kept alive by artificial means?  Are there some procedures you want to refuse (typically for religious reasons)?  For your living will to take effect, two doctors must agree that you have a terminal condition or are in a permanently unconscious state, and death is being prolonged with no reasonable chance for recovery.  The people you list in this document are merely for contact purposes–they have no decision-making authority.

Healthcare Power of Attorney

A healthcare power of attorney allows you to name people who will have authority to make healthcare decisions for you if you are unable to do so.  If you have a living will, your healthcare power of attorney cannot override your wishes in your living will.

Life Insurance

Why have life insurance?  Obvious reasons include providing money to those dependent on your income if you die.  Life insurance can also be used to pay off your debts so that you don’t burden your family with your financial liabilities, such as medical debt if you were hospitalized or had a lengthy illness.  You can purchase a policy designed to pay off the mortgage on the house if you want to be sure your children and family can keep the family home.  If you own a business, life insurance can be purchased to enable your business partners to buy out your shares and keep the business running smoothly.

There are more components to an estate plan, but the list above explains your first considerations when starting to plan.  This list is specific to Ohio.  Documents described above might be different in your state.

If you have any estate planning questions, email me at julie@juliemillslaw.com.