The Nightmare of an Unfunded Trust
A common misconception that many people have is that the act of obtaining a Trust alone will help you avoid probate and save estate taxes. Many of our clients will come and sign their Trust documents and then that will be the last time that they will think about their Trust for a long, long time.
Other than the act of signing the Trust, the most important step in executing the Trust is the funding. Not funding a Trust makes a Trust document useless. It is like building a house, but not living in it.
Although we suggest that those who have signed a Trust schedule a follow up meeting with us to review their Trust funding, many people decide not to do so and then end up leaving their unfunded Trust as prey to the probate court and estate taxation, which defeats several material reasons for setting up a Trust.
Funding your Trust is crucial because your Trust controls only those assets actually owned by or payable on
death (POD) and/or transferrable on death (TOD) to the Trustee.
Any assets not owned by, POD, or TOD to the Trust may (1) need to be probated after your death, (2) be subject to statutory marital rights if you remarry, or (3) not be eligible for transfer to your Trust after your death to regulate distributions to the beneficiaries, which would once again defeat your key reasons for setting up your Trust. Therefore, you should carefully attend to this important step in your estate plan.
If you think that you may have not properly funded your Trust or would like a review of your Trust funding efforts, please call the office to schedule an appointment for a Trust funding review. We also offer Trust funding services where we do the leg work that is required to fund your Trust. These services are offered at a reduced legal rate because they are mainly just time intensive and do not require an attorney's expertise to complete. |
Saying goodbye to a beloved Roberson Law employee 
For the past 11years, Arlo (Bud) Ragan has served the clients and staff of Roberon Law as Fiduciary Accountant. Bud is a CPA and he managed the financial transactions and bookkeeping for all of the clients for whom Nancy serves as either Guardian or Power of Attorney.
Bud and his wife Marty have purchased a home in Florida to be closer to family and will be enjoying the Sunshine State for the next five months until they return to Ohio to sell their home in Centerville.
Bud has a keen wit and sense of humor and was always a joy to work with. We know the office at Roberson Law will be a little less lively now that he has left. We will miss you, Bud. | |
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Welcome!
In this issue, I have included articles about funding your Trust and updating your Powers of Attorney. These are areas in which we often see our Clients struggle, so that is why I decided to write about those topics in this newsletter. I hope that you find these articles informative and useful.
I have also written an article to say goodbye to our faithful employee, Bud Ragan, who has been with us for many years and has finally decided to hang up his hat and retire. In an office full of women, we called Bud our "token male." We will miss Bud's sense of humor and smiling face.
I hope you had a wonderful holiday season and have a blessed and properous New Year. I thank you for your continued support of my practice.
Nancy A. Roberson |
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Make sure your POA is Powerful
Although Ohio law does not limit the age of a Power of Attorney (POA), financial institutions often enforce their own rules about this document.
Unfortunately, because Ohio has no law requiring any business to accept a Power of Attorney, some banks, financial institutions, and real estate closing agents may refuse to accept a Power of Attorney due to its age.
I have encountered the situation where a person was attempting to conduct a crucial time-sensitive financial transaction on behalf of a loved one who was either out of state or incapacitated, and the transaction was delayed because the financial institution balked at accepting the Power of Attorney. Therefore, to avoid that situation, you should periodically have your general durable power of attorney updated. I suggest doing so every five years.
Another way to make your Power of Attorney more effective is to ensure that the document contains alternate agents and also contains a clause that says that if any alternate agent cannot serve, then an alternate agent can appoint another agent for you. If your agent is not available or able to serve, such as if both a husband and a wife are in a car crash and left unconscious, you want to make sure that you have alternate agents listed in your Power of Attorney who can step in and sign on your behalf, or make decisions, if need be.
Don't make the mistake of putting all of your eggs in one basket by appointing only one person to be your agent in your POA. By doing this, you take the risk that you may be in a crisis situation without anyone who has the legal authority to make important decisions on your behalf. |
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| Federal Gift and Estate Tax Inflation Adjustments for 2009
The Treasury has released inflation adjustments that may affect you in 2009. Although there are several changes, here are the two that are the most relevant when doing gift and estate planning:
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The annual Federal gift tax exclusion amount is now $13,000. The lifetime gift tax exclusion for 2009 remains at $1,000,000.
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The Federal estate tax exclusion amount is now $3.5 million. The tax experts speculate that this exemption will be frozen at $3.5 million after the new president takes office. |
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Hot Off The Press!
IRA Mandatory Minimum Distribution Rule Waived for 2009
On December 23, 2008, President Bush signed into law the Worker, Retiree and Employer Recovery Act of 2008 (H.R. 7327). This legislation included a waiver of the mandatory minimum IRA distribution rule (just for the 2009 calendar year) for individuals who are 70½ and older.
Under the prior law, people who were 70½ and older were required to distribute a certain amount of funds from their IRAs to avoid a stiff tax penalty. But through this recently enacted law, individuals who are 70½ and older can keep all of their funds in their IRAs without receiving a tax penalty. | |
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Need a Speaker for your event?
 Did you know that Nancy is an author and frequent speaker to various civic and religious organizations?
Nancy combines legal advice with her personal story about the tragedy in her life that motivated her to pursue the area of estate planning and probate law. If you would like Nancy to speak at your organization, club, or house of worship, please call the office at 937-643-2000 and ask to speak to Judy Williams, or go to our website to view Nancy's speaking schedule. | |
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| Our mission is to provide excellent, compassionate legal services to help people plan for the unexpected and prepare for the inevitable. | |
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