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Medina Legal Issues Blog

Digital assets treated differently for estate planning

A joint research paper by law schools at Case Western Reserve University in Ohio and UC Berkeley indicates that 83 percent of consumers believe they own digital content in the same fashion that they own material things. That is rarely the case though, according to the authors of the study. Ownership issues come up frequently with regard to digital media, and the lack of understanding can be most important when the purchaser of the content passes away.

Many End User License Agreements and Terms of Use provisions do not grant the purchaser ownership with regard to digital content. Rather, the digital book, song or other media purchased is not actually owned, at least not to the extent that it can be bequeathed. In many cases, the purchase grants the purchaser only the right to read, watch or listen to the content.

Why a will isn't an estate plan

While a will may be an effective part of an Ohio resident's estate plan, it not necessarily sufficient on its own. For instance, assets such as an individual retirement account or a life insurance policy will not pass to a beneficiary under a will. Assets such as those will go to a person who has been specifically named a beneficiary of those accounts.

It may be a good idea to review beneficiary designations on a regular basis. It may be especially important to do so after a significant life event. Those who have an IRA may wish to engage in proper estate planning as it may be possible to provide for several generations with the proceeds in a single account. It may also be possible to provide tax benefits for beneficiaries as well. To accomplish these goals, it may be worthwhile to create a customized beneficiary form that can be as detailed as an owner wants it to be.

Advantages of planned giving in an estate plan

Planned giving is an approach to estate planning that allows people to start making charitable gifts while they are still alive. Ohio individuals, their families and their communities may all benefit from planned giving over a long period of time.

Planned giving eliminates the guesswork for loved ones. Beneficiaries know what to expect in the estate plan and the reasoning behind it. They do not have to worry about trying to figure out what a person's wishes might have been because the documentation is already in place. Furthermore, planned giving can establish a legacy of philanthropy in a family and can be a way for a person to pass down values along with assets. Planned giving also provides an opportunity for a donor to discuss a nonprofit's needs with that organization and determine what type of giving would be most beneficial. The donor can have the same type of conversation with family members and make similar decisions tailored to beneficiaries' situations and preferences.

Wine as an asset in an estate plan

An Ohio resident who is appointed executor of a will might be responsible for assets outside that person's area of expertise. As executor, it is necessary that the person properly manage the asset. One example of an asset that might be passed down using a will is a wine collection. This is both a unique and a perishable asset, so there are a few things the executor must do.

First, the collection must be inventoried. The executor is not expected to be an expert on whatever assets may be included in the estate, and an expert recommended by an auction house could assist with this process. If wine clubs or wineries were sending regular shipments, they should be contacted to stop future deliveries. The person who assists in inventorying the collection might also help with proper storage of the collection. Wines that are exposed to conditions such as light or fluctuating temperatures can become worthless. Insuring the collection may be a good idea. Finally, the collection must be valued.

How to talk about money with family

It isn't uncommon for Ohio residents to have issues talking to their family members about the financial aspects of an estate plan. However, failure to do so could have a profound impact on their parents, spouses or children. Among the topics that should be discussed with family members include what is contained within a will and who should make end-of-life decisions if an individual is mentally incapacitated.

The best way to have a successful family discussion about money is to be honest and open. Individuals should focus the talk on what is most important to them and focus on their values. This is because most discussions about finances tend to be discussions about the values a person and a family have. This is convenient because most people find it easier to have a conversation about family values than they do about money.

Women may have special concerns in estate planning

Ohio women may have special factors to consider as part of the estate planning process. Because they live longer and on average have earned less income over their lifetimes, there are unique considerations in planning their wills and other related estate concerns.

Many people do not think frequently about estate planning. For people with modest estates, there is often little reason to consider the distribution of assets after death, and for people of all means, there are many other factors seeking attention on a daily basis. However, getting an estate plan settled can be important not only for peoples own peace of mind but for the future of their loved ones.

The estate plan and the power of attorney

An Ohio resident's estate plan might be improved with a power of attorney. A power of attorney can be durable or nondurable, but a durable power of attorney may be best for the purposes of an estate plan because it allows a person to step in and make financial decisions in the event the principal becomes incapacitated. A nondurable power of attorney is no longer valid if the principal becomes incapacitated.

A power of attorney should be someone who is trustworthy and responsible. It may be a spouse, child, sibling, friend or even a professional such as an attorney. A person who is uncomfortable giving a single agent all the power may name co-agents.

Pitfalls in do-it-yourself estate planning

Ohio residents trying to plan their estate without the assistance of an attorney may wish to reconsider that decision. While the use of DIY legal documents has become popular for wills, trusts and powers of attorney, it also comes with risks.

Documents used in estate planning are subject to strict requirements. One reason is that when a will or power of attorney becomes effective, the maker is deceased or disabled and cannot be questioned as to intent when signing the document. Failure to follow formalities can cause the document to be challenged and possibly invalidated.

Handling unusual final arrangements

Many Ohio residents aren't concerned over family members or friends granting their final requests. However, some may want some guarantee that a final wish will be carried out even if it is unusual. For instance, there is a story involving the inventor of the Pringles can who asked that his ashes be placed in such a can before being buried.

While there is no way to know for certain if that story is true, individuals do have options when it comes to making sure that unusual last wishes are granted. Typically, these arrangements will be included as part of an individual's estate plan. It used to be customary to include final requests in a will, but there is no guarantee that a will is found before a burial or cremation takes place.

Commercial real estate loans now have higher standards

Entrepreneurs in Ohio who are interested in obtaining a loan so that they can purchase a property might have to face higher standards to get approved. The Federal Reserve reported that commercial real estate loans were more tightly restricted in the second quarter of the fiscal year. Nonetheless, owners who are interested in business loans will find that the standards are the same and have not become more restrictive.

The Federal Reserve conducted a survey of banks' loan activities, and they found that loans for multifamily residential properties, land development and construction were facing tightening standards. The survey also found that there was a decrease in the demand for loans of these types. Policy makers from the Federal Reserve are wary of higher prices in commercial real estate as increasing prices could exacerbate any lows the economy might face.

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