Spring weather always reminds me of my blessed childhood of being raised on a farm. A daily routine on our farm was farm equipment maintenance.
We had a daily checklist of items to service or check before we could begin the day’s work. We checked engine oil levels. We confirmed fuel levels in case the gauge had stopped working. We greased every grease zerk (fitting) on tractors and implements and engaged in a variety of other maintenance that created a mental checklist that each of us walked through every day.
When it comes to legal maintenance for our lives, I suggest that there are four broad categories that people may want to “check on” when asking lawyers to confirm that the people’s life plans are legally “kosher.”
First, if I am disabled or otherwise unable to make decisions but still alive, is someone else empowered to make my decisions for me? The documents that answer this question are called advanced directives, and they typically include a power of attorney for finances and another power of attorney for healthcare. Without these documents, even spouses can sometimes be forced to officially become legal guardians of incapacitated people.
Second, when I die, will my assets go to where I want them? The document that typically answers this question is a will. In considering this question, various contingencies should be analyzed, including whether heirs (those identified to inherit) pass away before the will-maker dies. Sometimes, a trust can address various contingencies better than a will.
Third, when I die, how easy will it be for my surviving family and friends to get my assets to where I want them? Answering this question typically involves identifying each asset (account, item, property, etc.) that a person owns to determine if each asset will be administered through probate or through a contract, such as life insurance, payable-on-death accounts and transfer-on-death items. A trust is a tool that is often used to avoid probate and simplify asset distribution.
However, trusts are not always advisable. This can particularly be the case when a person’s or couple’s distribution plan is rather straightforward and his, her or their assets are able to be transferred at death through contracts, such as life insurance or bank account payable designations. As a result, in some circumstances, trusts can make post-death estate administration more difficult than if there was no trust. Therefore, I sometimes help clients dissolve and terminate trusts to simplify their estate planning.
Fourth, is there any liability about which I should be concerned? This question usually provokes analysis by commercial business owners. However, people who do not consider themselves business owners can also have liability concerns that can be sometimes be proactively addressed.
For example, many people own farms that the owners rent to tenant farmers. If the landowner has a car accident and insurance does not cover the entire claim (due to a gap in coverage or if the claim exceeds the policy limit), an LLC can sometimes protect at least some of that landowner’s wealth.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.