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Medina Legal Issues Blog

Funding a trust helps it to reach full potential

Establishing a trust can be a major step in the development of a comprehensive Ohio estate plan. Once the trust is established, though, it must be funded. It can be thought of like a box that has been created to hold something; until it is actually holding assets, the box does not fill its potential. Funding the trust is like putting something into the box.

If the trust is going to hold real estate, an attorney might create a deed to transfer the title to the property from the owner to the trust. Typically, the transaction will be something like John Doe transfers ownership to John Doe as Trustee of the John Doe Revocable Trust. Once the transfer is properly recorded, the trust holds the real estate. Once title to the property has been transferred to the trust, it's important should check with the relevant auditor's office to see if real estate tax exemptions must be refiled.

How often should you update your employee manual?

Companies use employee manuals, or employee handbooks, to set out policies and expectations for employees. These manuals come in many forms and can even include interactive web pages. Employees might refer to them when they have questions about vacation policies, the dress code, federal employment law or other issues.

Of course, it is up to each company to decide what it prioritizes including, but no matter what you put in at first, updating your manual is essential. Say that you started your company in 2008, and it grew enough that by 2010, you drew up a handbook. Now it is almost a decade later, and you are still operating under the 2010 manual. Parts of the law have changed, and undoubtedly, so have at least a few of your company policies.

How startups can learn to handle debt

Business ventures often begin in debt. The exact structure of a startup's capital can take many different forms, but most business owners in Ohio will have investors, credit cards or a bank loan of some kind. Realistic expectations are a key part of dealing with debts successfully. It's better to prepare for those things that can be expected, even if they're not enjoyable to think about.

A U.K. study published in 2016 said 9 percent of startups began operations with no concrete budget. Even the most basic budget should account for expenses like staff wages, equipment, marketing, utility payments and office rent. An established budget allows ownership to identify costs and create spending plans. Loan applications are often rejected, which can be a good thing in that it can keep businesses from taking on excess debt, but it can put startups in difficult situations.

Dealing with estate planning issues during a divorce

Going through a divorce in the state of Ohio can be a complex process that requires many considerations. In particular, those ending a marriage should take some time to revisit their wills and other legal documents.

It's particularly important for a divorcee to update their health care proxy and change their power of attorney. If these documents are not updated, the former spouse may still get to make decisions for the estate owner in the event of a medical emergency.

Special needs trusts protect assets for disabled adults

The Social Security Administration has strict rules about the assets a person who receives Supplemental Security Income can own. However, there is a way to ensure that a disabled person has the things they need without violating the government's rules. When a person on SSI in Ohio receives a large cash settlement or an inheritance from a family member, they may be able to keep the money if it is placed in a properly structured trust.

There are different types of special needs trusts, so it's important to choose the right estate planning tool to get the maximum benefit. First-party trusts are designed to hold funds when a disabled person receives from a large sum of money that would ordinarily disqualify them for government benefits. In order for them to keep their monthly check and medical coverage, a person who receives a settlement or inheritance can transfer the money to a trust. Although the funds are available for the beneficiary to use during their lifetime, assets left in the trust when they die are transferred to the government for reimbursement of medical expenses.

How professionals can help create an estate plan

Some people in Ohio who are creating an estate plan might want to consider working with professionals on that plan. This team of professionals may include an attorney, an accountant and a financial planner.

One financial expert says that many of the clients he sees think a will is the same thing as an estate plan. With little knowledge about the necessary documents in an estate plan, a person may leave out some crucial elements. Professionals may be able to help guide a person away from errors that could arise because of this lack of knowledge. An estate plan that is prepared with professional assistance may make things easier on heirs after a person's death.

Mistakes some businesses make when downsizing

In the business world, downsizing is often code for "layoffs." No one enjoys having to lay off employees, and the unpleasantness of the task can sometimes cause business personnel to act out of character. For instance, a normally friendly boss might be rigid, abrupt and even rude when telling employees they will longer work for the company.

The reality is that businesses can make a significant amount of errors, even legal errors, when they lay off employees. Here is a look at a few.

A pour-over will can be an important backup

When it comes to estate planning, a variety of strategies someone in Ohio could use to protect his or her assets. Many people develop an estate plan based on trusts; by creating trusts, people can have more control over how those assets are used as well as present mechanisms to transfer property outside the realm of the probate court. However, a pour-over will can also be important when an estate plan is largely reliant on trusts. This kind of will can be important when not all property is transferred into a trust before the grantor's death.

During the estate planning process, a pour-over will works essentially as a backup for a plan that is primarily based on trust distribution. It indicates that any assets outside the revocable living trusts that were created should be passed into the trust upon the grantor's death. In this way, the trust will be able to receive the property that was not passed to it prior to the creator's death.

Preparation could lead to loan approval for small businesses

Small business owners in Ohio likely know that they will face considerable scrutiny when approaching a bank or credit union for a small business loan. Preparing essential documents prior to meeting with loan officers could aid business people who need financing. Lenders will want to see financial records from at least the prior three years, a business plan and projections about future revenue and expenses.

A business owner should have copies of business and personal tax returns ready to give a lender. These records allow lenders to evaluate the loan applicant's financial health and recent business performance. A business plan needs to accompany the financial paperwork. An established business might not have a formal written plan, but the owner could prepare a narrative that describes the goals of the business and its plan for growth. A startup business will need a formal business plan that describes the expected sources of revenue.

The need for estate plans

Ohio residents can use an estate plan to ensure that their wishes regarding how their legacy is handled are enforced. Estate planning can be used to protect and manage one's legacy while reducing the tax burden of the state.

It is important that everyone who has assets, even if they are minimal, devise an estate plan. An attorney who practices estate planning law may provide valuable guidance regarding how one's assets should be allocated.

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