Misconceptions you might have with estate planning

I have heard all of these misconceptions mentioned, including just today.

  1.  The attorney who prepared my will must handle my probate.  No.  Many estate planning attorneys prepare wills with an eye toward being called upon to handle a probate if the client dies, but there is absolutely no requirement that the drafting attorney who prepared your will must handle your probate.  This includes if the attorney who prepared your will holds your original will for safekeeping.
  2. My will dispenses with all of my property. Some documents override a will.  If you have a will, and you leave all real (house, land) and personal property to John, yet you have a deed that is held somehow with Jane, Jane will get the house because she is on the deed, not John, even though your will gives it to John.  Generally, titled and deeded assets go to the person listed on the title, or beneficiary designation, or deed.  “I leave everything I own to Bob.”  At my death, I have a life insurance policy that lists Joanne on the beneficiary designation.  Who gets my life insurance?  Joanne.
  3. I had a trust prepared so I don’t have to worry about probate.  It is so frustrating to see clients come to me with trusts they had prepared (and paid a lot to have prepared), only to learn that the trusts are unfunded.  What the client has, then, is a stack of papers that likely will not do what was intended.  Funding your trust involves titling or deeding assets to your trust.  You can accomplish this by naming your trust on beneficiary designations so that asset goes into your trust at your death, or having a “transfer on death affidavit” prepared that puts your home into your trust at your death.  For example, you would have a deed prepared granting your home from Jenny Jones to “The Jenny Jones Revocable Living Trust.”   However you accomplish it, a discussion of “funding your trust” should be a critical part of planning from your attorney.  If you have a trust prepared and then never prepare a new deed putting your home into your trust, and you die, your home will likely require a probate to be opened, defeating one of the important reasons for having a trust prepared (avoiding probate, privacy).
  4. A will (last will and testament) is different than a “living will.”  A last will and testament is what we think of as a “will”–we state who is to inherit what, we name a guardian for our kids if they’re young, we name an executor.  On the other very different hand, a “living will” is a healthcare document stating whether we want artificial life support if (1) we are terminally ill and death is imminent, or (2) if we are in a permanently unconscious state (i.e., brain dead).  This is popularly known as “pulling the plug.”

Contact me at julie@juliemillslaw.com to discuss estate planning.

Homebuying 101: should you get Closing Protection Coverage?

My spouse is more apt to get coverage that protects you beyond the normal warranty period, whether it is an extended warranty for a phone or car, or extra protection with an insurance policy.  Perhaps as an attorney I feel ready to assert my rights under express or implied coverage, and related laws.  Sometimes his way is more appropriate and prudent, other times such “extra” is unnecessary overkill.  Closing Protective Coverage (CPC)?  Get it.

In a nutshell, CPC protects you against mistakes or fraud from your title agent.  “Doesn’t my title insurance cover that?”  No, and many people make the mistake of thinking it does.  Your title agent is an independent person from the title company, i.e., they are licensed to work with the title company to get title insurance to you.  Often the title agent holds funds from buyer, seller or both in escrow until a certain time during the real estate transaction.  So, the independent title agent, might or might not be holding funds…. If a mistake, or–worse–fraud occurs, the title insurance company is not responsible for the acts of independent title agents.

Ohio law requires that the CPC letter offering the option for coverage must be given to the parties at the time the order for title insurance is placed.  The Closing Protection Coverage indemnifies the purchaser from:

(1) Theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing, or escrow funds;

(2) Failure to comply with any applicable written closing instructions, when agreed to by the title insurance agent.

The cost for CPC is relatively low: for buyers it is $20, for sellers it costs $55.  You likely won’t experience fraud or mistake, but if you do, research showed that the range of costs from claims arising out of closing agent fraud start in the five figures.  CPC is worth it.

Contact me at julie@juliemillslaw.com, (216) 438-1298 (northeast Ohio) or (614) 519-8661 (central Ohio) for any help with real estate matters.


Home Buying 101: importance of “Title Commitment” policy

Title to your property is its history of ownership.

I admit it: when my husband and I bought our house almost two decades ago, I sailed through signing our documents without paying too much attention to the mounds of paperwork.  My legal practice areas at that time didn’t involve much real estate, and I hired my boss to represent us through buying our home.  We had no issues.

Then, I represented a client purchasing a home and was “aghast” at what problems my husband and I could have had.  I decided to become extremely educated on things many ignore, particularly, title commitment policies.  The home buying process and the paperwork can be daunting, and my blog will run a short series (Home Buying 101) to make it a little easier to digest.  You might not become a real estate expert but hopefully my posts will poise you to ask questions most relevant to your situation.

“Title” to your property is basically a history of its ownership.  It is important when you buy property to know that you have “clear and marketable title.”  The land is yours, and no other interest or defect is going to come along and mess with your ownership, which could cost you a lot of money.  For example, you bought your home and assume it’s all yours.  But–at some point in the past (along the “chain of title”) someone who owned the home before you and died had an unknown heir who now says that he owns part of your property, as his dad’s will stated.  This stuff happens, and without insurance, you could become involved in a law suit.   Or a past contractor has a lien against your property for unpaid work.   Or a past owner has a court judgment against her that attaches to the property.  This list of possible “defects” is endless.

A title commitment policy ensures you–the buyer–that the property you buy will be free from any “problems” (defects) regarding ownership.  No one from the past will step forward and state that they have a right to your property–if anyone does, you are protected by insurance.

Once you decide you want property that is for sale, your realtor will order a title commitment.  You get the title commitment before closing, and the title policy after closing.  The title commitment is reviewed, amended if necessary, then becomes your policy after you close on your home.  You should carefully review your title commitment so that it says and covers what you want.  This might be where readers drift away because the document seems overwhelming, so if you are not likely to read the entire document, then 1) hire me (or any real estate attorney), or (better yet) 2) read Schedule B of the commitment.  Schedule B of the document is specific to you, the seller, and your situation.  Keep in mind that you typically have only a few days to review a title commitment so be sure to review as soon as you receive it.

Schedule A is the nuts and bolts of identifying information–buyer and seller information, commitment date, property price, loan amount, etc.  Schedule B is what you want to really pay close attention to, read more than once, read again.  Schedule B lists the exceptions to the policy, especially the Covenants, Conditions & Restrictions (CC&Rs).  Exceptions can affect the property being insured and are not covered by the title policy.  Examples include restrictions, easements (most utility easements are standard, but some easements exist that aren’t of public record and can affect your use of your property), setback requirements, and mineral rights.  What are your restrictions?  Do you understand how they could impact your ownership and use of the property?

For many of my clients, their home is their biggest asset.  Know what Schedule B says in your title commitment, at the least.  I do recommend having an attorney review your documents, particularly your title commitment.

If you have any questions about purchasing a home, or your title commitment, contact me at julie@juliemillslaw.com.  I represent buyers and sellers in residential real estate purchases.



Three Ways Couples Hold Property in Ohio

There are three ways in Ohio that couples can hold property.  Why does it matter?

The form in which you hold property affects how you can transfer the property, what happens to it at your death, what happens if one of two property-holders dies or wants to sell his or her portion.  You should know how you hold property so you can change the type of deed you have for your specific reasons.  Do you want the other owner to get your share if you die, or do you want your kids to get it?  Do you want to transfer your share to the other owner outside of probate?  Do you want to transfer your share of the property to your spouse at your death only?

Get out your deed, or get onto your county recorder’s website and find your deed online.  Does it state:

1.  “George Burns and Gracie Allen, Husband and Wife”?  If no manner of title is stated, in Ohio the form of ownership will be presumed to be tenancy in common.  Each person owns an undivided fractional interest in the property.  They can own equal or unequal shares.  When an owner dies, that person’s share must go through probate, and is then transferred according to his or her will.

2.  “George Burns and Gracie Allen, joint tenants with rights of survivorship…”  The magic word is survivorship.  If the deed is a survivorship deed, then on the death of one owner, that owner’s share passes outside of probate to the other owner.  For a couple whose largest asset is their house, and few other assets that would need probated, having a survivorship deed could result in avoiding probate.

3.  What if George owned property and wanted to have the property pass to Gracie at his death, but for any number of reasons didn’t want her to have a present interest in the property?  George could have a transfer on death affidavit prepared (and recorded).  He would name Gracie in the affidavit to receive the property at his death.

If you want to avoid probate, be sure your deed has survivorship language or you record a transfer on death affidavit.  Why make your heirs go through the probate process if they can avoid it?

To change the form of ownership you have with your property, contact me to decide the best form of ownership for your situation, and to prepare and file a deed if necessary.  I can be reached at julie@juliemillslaw.com.

“Adverse Possession,” or “legally stealing property”

Yes, you can legally take real property (land) belonging to someone else.  It’ll take a couple decades, but it can be done!

Most people have heard of “adverse possession,” or “squatting.” These occur when one who doesn’t own the land (trespasser) eventually acquires ownership by means of possessing the land for a certain time period.  Trespassers become the property’s legal owners.  Often this possession is intentional, such as someone who builds a structure on land that appears abandoned or where the owner doesn’t pay attention (think vast farmland), or someone who encroaches on a neighbor’s property thinking that the neighbor won’t say anything or notice (think widening your driveway into the neighbor’s boundary line or extending your landscaping into the neighbor’s yard).

Adverse possession can occur unintentionally also.  Examples of this occur typically through mistake, such as a someone building a fence on a neighbor’s property by relying on a faulty survey.

In Ohio, you can acquire ownership of property if you adversely possess it for 21 years.  The acronym to remember when determining if the elements of adverse possession have been met is “OCEAN”: Open (visible, obvious, capable of being seen), Continuous (regular, uninterrupted use of the land), Exclusive (adverse possessor treating land as if he or she is the owner), Adverse (non-permissive) , and Notorious (owner has been put on notice by trespasser; trespassing can’t be sneaky or secretive).  Does a squatter grow a tomato garden on your land for 15 years, stop for two then claim “adverse possession” at 21 years?  (No adverse possession.)  Does a neighbor mow into his neighbor’s lawn for 21 years, but only in the middle of the night and is never seen?  (Sneaky or secretive behavior defeats “notorious” element and results in defeating claim of adverse possession.)

Adverse possession claims are very fact-specific.  To avoid “squatters,” you should:

  1. Keep an eye on your property.  Enforce your boundaries.
  2. Post “No Trespassing” signs if you own a large area of land.
  3. Give written permission to use your land and get the user’s acknowledgement of such permission.  Examples include giving permission to drive across your land, park on your land, grow crops, etc.  This permission and acknowledgement defeats adverse possession and easement claims.

You might eventually need to involve the police or courts in situations of adverse possession, but whatever you do, do not ignore the situation for 21 years or you have a good chance of losing a claim of adverse possession in Ohio.

Contact me at julie@juliemillslaw.com or visit http://www.juliemillslaw.com with any property or other legal questions.

August is “Home Business Month”—Celebrate by Being Legal!

National “Home Business Month” is celebrated through the month of August.  I love entrepreneurs and everything small business, and I represent clients who want to start their own business.  My posts have discussed starting a small business and home-based businesses, such a food-based business.  With the technology that is available today, it’s easier than ever to run a business from your home, just make sure you research applicable laws, rules and restrictions.  This post can help you get started.

First, you should make sure you have all the appropriate licenses.  Your state might require licenses with certain businesses involving food, children (daycare, recreation programs, etc.), hair salon or barber shop, massage therapy, and pet grooming, as a few examples.  Check with your Secretary of State (click here for Ohio’s), and with relevant licensing boards.

Second, check zoning and municipal regulations.  How is your property zoned?  Are home-based businesses permitted where you live?  Typical zoning regulations to consider, and might apply to you, include:

  • Restrictions on the number of employees
  • Restrictions on traffic, noise and parking
  • Restrictions on the number of clients or third-party vendors permitted in a day
  • Signage (height, colors, size, location)
  • Restrictions on use of chemicals or creating noxious odors
  • Restrictions on whether you can store inventory or items at your home

Typically, complaints about home businesses come from neighbors, which will result in local authorities coming to your home, so consider your business and anything about it that might prompt a neighbor to complain.  Will you have clients in and out of your home that might create traffic or parking issues?  Will you be making furniture or fixing cars in your garage and making noise that might create a nuisance?  Will you be training dogs, where dogs might run over to the neighbor’s property, or bark a lot?

Third, there might be private restrictions on the use of your property.  Do you live in a subdivision subjected to the covenants or bylaws of a Home Owner’s Association (HOA)?  Are there deed restrictions that might affect the operation of your business?  Do you lease or rent your property, and have restrictions in your lease or rental contract?

If you want to run a business from your home in Cleveland, Columbus, or anywhere in between, contact me to get started at julie@juliemillslaw.com; in northern Ohio call (216) 438-1298; in central Ohio call (614) 519-8661.