Atkins And Atkins, Attorneys At Law, LLC

Columbus Family Law & Divorce Attorneys

503 S Front St, Ste 203 Columbus, OH 43215
614-485-8248

Menu

Business Name

How does a generation-skipping trust avoid estate taxes?

By

When you leave your inheritance behind for your loved ones, the government will charge an estate tax on any inheritance worth more than $11.4 million in 2019. And if you pass your inheritance along to your children, the IRS may charge them with another estate tax when they leave it to their children. So how can you avoid this taxation every generation?

When you set up your estate plan, you can use a generation-skipping trust to avoid an extra estate tax charge. With a generation-skipping trust, you give your inheritance directly to your grandchildren. This lets you “skip” paying an estate tax for one generation, preserving the assets you pass along.

Giving your inheritance directly to your grandchildren

With a generation-skipping trust, you set up a trust where your grandchildren are beneficiaries. You can also create a generation-skipping trust for anyone not in your family who is 37.5 years younger than you. Since your inheritance does not go to your children, who never have a legal claim to it, your assets avoid incurring a second estate tax when your children pass away.

Instead, the IRS only applies an estate tax when you pass away. This means you lose less of your estate to taxes.

Generation-skipping transfer tax

However, the IRS does have a tax on generation-skipping transfers. Like an estate tax, a generation-skipping transfer tax (GSTT) only applies if the beneficiary receives more than the federally exempt amount. In 2019, the exemption for GSTT is $11.4 million, but this is subject to change.

Avoiding estate taxes with a generation-skipping trust

A generation-skipping trust can help you avoid extra estate taxes. You can give your grandchildren a larger share of your assets while giving the IRS less. If used properly in consultation with an attorney and financial advisor, you can use a generation-skipping trust to keep more of your assets in the family.

Are ‘children of divorce’ more likely to get divorced?

By

Young people whose parents went through a divorce used to be called “children of divorce,” as if they were raised by the divorce instead of by parents. In the 1970s, such children were twice as likely to get divorced themselves.

The phrase now seems to be disappearing as fast as higher divorce rates among people raised by divorced parents. From two times as likely, the rate has now fallen to 1.2 times and may be headed toward one-to-one oblivion. The obvious question for researchers, parents and their children is “Why?”

Kids with divorced parents still more likely to divorce

Like most parents contemplating divorce, you probably worry about the effects the split will have on your children. It’s a reasonable concern, since there’s no question divorce is usually a challenge for everyone in the family.

Indeed, there’s still an increased divorce risk for those with divorced parents. Researchers have never agreed about why, except that a combination of factors is likely responsible, as detailed a recent article in The Atlantic.

If your parents are divorced, you’re more likely to marry someone whose parents are also divorced, perhaps because shared experiences draw people together. And it may be that such children learn fewer lessons about staying together despite conflict, tragedy, disappointment and other challenges.

A dropping divorce risk for kids of divorced parents

The reasons for the increased risk are unclear and complex, so the reasons for the dropping risk are also murky and multiple.

Children used to face a stigma for having divorced parents, but not so much anymore. No longer outcasts, they’re freer to have healthier relationships.

Probably, children of divorced parents are less likely to see marriage as “given” for normal people. Whether or not they form life-long partnerships, children of divorce may marry less often and therefore can’t divorce as often.

Besides, it’s more acceptable today to marry later. So, when people do get married it may be less because of social expectations and more because they’ve taken plenty of time to focus on selecting the right partner.

How to get around the need for probate

By

Those who live or own property in Ohio may be required to go through the probate process. This is when an executor presents a will to a probate judge to be validated. Once a will is validated, assets can be distributed according to its provisions, and the executor may take other steps such as paying income or estate taxes. If an individual dies without a will, a probate judge will appoint an executor on that individual’s behalf.

While probate isn’t always complex or expensive, there may be good reason to avoid it if possible. For example, it could take many years for a will to be confirmed and an estate to be settled. In addition, the proceedings are made available to the public, which means that anyone can see the details of an estate or how it was settled. There are several steps that a person can take to avoid or minimize the need for probate.

These steps may include giving away assets while still alive or holding them outside of the estate. This could be done by creating a living trust or making use of beneficiary designations. If an item is held jointly, it typically passes directly to another party upon an individual’s death. In some cases, small estates can be settled without the need for a formal probate process.

An attorney may be able to help a person structure an estate so that assets can be transferred without the need for probate. This may be done by putting assets in a revocable living trust or a pour-over will as opposed to distributing them through a traditional will. Homes, cars and other property may be titled in a manner that gives another person the right to own them outright when the current owner passes.

People can learn from Aretha Franklin’s estate mistakes

By

While many people in Ohio may love Aretha Franklin’s music, they may want to take a different path when it comes to their estate planning decisions. After the Queen of Soul passed away in August 2018, it was generally believed that she never executed a will. As a result, her estate has remained in the probate courts since that time, with relatives struggling over how her significant assets will be distributed, including valuable song royalties with ongoing income. More recently, three different handwritten wills were located in different locations and proffered to the court; it is not clear if any of them have legal standing.

Because Franklin died without a will and left behind a large estate, a substantial amount of money has been spent on legal and court fees. In addition, family differences and disputes have been exacerbated by the amount of money at stake from her estate. Many people may want to avoid this outcome for their own loved ones after they pass away. In order to do so, the first step in making an estate plan is often executing a formal will. People may opt to work with an estate planning lawyer to develop a will that reflects their goals for the future and makes clear the distribution of their estate.

Of course, making a will is only the first step towards developing a comprehensive estate plan. People are advised to regularly review their wills and other estate documents to ensure that they reflect their current family relationships and desires for the future. In addition, people may want to consider other key documents like powers of attorney or trusts.

People who are thinking about the future can help their family by creating an estate plan. An attorney might be able to help clients develop and execute key documents.

How to divide a business in a divorce

By

When Ohio couples who are also business owners get a divorce, deciding what to do about the company can be difficult. The couple can continue to run the business together, they can sell it or one can buy the other one out.

For the first option, the couple will usually need to have a relatively amicable relationship. If they do not and they still want to keep the business, they might be able to restructure it so they do not have direct contact with one another. They should also decide what role each of them will play in the company. If the couple decides to sell the business, they might want to wait until they can get what they agree is an acceptable profit. They should agree about the minimum offer they will accept and what the terms are. In some cases, they may not be able to wait for the most profitable offer and may need to sell for less than is ideal for financial reasons.

If one person is going to keep the company, they need to bring in an appraiser to get the value of the business. If the buyer lacks sufficient cash flow, they might need a long-term payment plan in place. The couple may also want to discuss a non-compete agreement.

An attorney may be able to help a person negotiate this and other divorce terms. Even if a couple does not own a business, they may need to reach an agreement on other complicated issues around the division of assets. For example, if the couple owns a home, they might need to consider some of the same factors as they decide whether one will keep it or if they will sell it. Dividing a valuable collection, such as art, could require a complicated appraisal process.

How is spousal support determined in Ohio?

By

Everyone goes into marriage with the intention to stay together forever. Marriage is a beautiful thing, but if the situation becomes untenable, sometimes splitting is the best call. Yes, divorce is full of emotional decisions, but there are also financial considerations to account for as well.

Marriage is a partnership. And just like a business partnership, when dissolved, the goal is for both partners to come out equitably for the work they put in.

What is spousal support?

Spousal support, also known as alimony, is payment one spouse makes to another during or after a divorce. Ohio law defines spousal support as payment made to a former spouse “both for sustenance and for support of the spouse or former spouse.”

Spousal support is not payments made to a spouse in the course of dividing marriage property.

Who gets spousal support?

The eligibility for and the amount of spousal support is determined individually for each case. Either party can petition the court for spousal support during the divorce proceedings. Some factors taken into considerations in Ohio when determining spousal support include:

  • Duration of the marriage
  • Income of each party
  • Earning capacity of each party
  • The age and physical, mental and emotional condition of each party
  • Factors involving minor children
  • The standard of living developed during the marriage
  • The education of each party
  • Each party’s individual assets
  • The contribution of each party to the other’s training, education or career
  • Tax consequences brought on by the divorce or receiving support
  • Any other factors the court finds relevant
Other considerations

Spousal support can be temporary – lasting only through the duration of the divorce proceedings – or permanent. The court can determine that it is paid in one lump sum, or in installments for a set duration, including life. Spousal support usually terminates if one party dies, unless otherwise arranged.

Seek advice

If you’re going through a divorce, it is usually a good idea to seek the advice of an attorney. He or she can counsel you on what kind of divorce makes sense for you, and help guide you through the process more smoothly.

The effects of income on divorce

By

Money can be an issue for many couples in Ohio. In some cases, it’s because husbands are insecure about their wives earning more money than them. Studies show that women who make more than their husbands are more likely to get divorced.

While women’s income relative to that of men has increased in the last few decades, societal attitudes do not appear to have changed as rapidly. In 1981, just 13% of women who lived with a partner earned half or more of the income. A 2017 Pew Research Center study found that this was true for almost one-third of cohabiting couples. However, the study also found that only one-quarter of Americans believed that it was extremely important for mothers to provide income for their kids. About 40% of respondents believed this of fathers.

A 2016 study by a sociology professor at Harvard University found that when a husband does not work full time, the divorce risk was more than 30% higher. Analysts say that American men tend to be more comfortable in relationships when they are the breadwinners.

A divorce can leave some people at a financial disadvantage. In addition to the cost of the divorce, it can be more expensive to live alone compared to sharing expenses with a partner. Some people might also struggle to keep up with child or spousal support payments after divorce. Because divorce can lead to such financial vulnerability, it is important for exes to understand their rights. A family law attorney may be able to help a client throughout the separation process.

The advantages of a trust over a will in an estate plan

By

A trust instead of a will could be the right choice for some people in Ohio who are creating an estate plan. A trust can offer more privacy and can distribute assets to beneficiaries more quickly because it does not have to pass through probate as a will does. However, a trust can also hold assets if there are reasons a beneficiary should not immediately receive them.

For example, if a beneficiary has special needs and receives government benefits as a result, getting an inheritance could mean an end to that assistance. A trust can be set up to provide for a loved one with special needs, but since the assets remain in the trust’s name, the government benefits are still available. Another situation could be one in which a beneficiary is a young adult and likely to be irresponsible with money. A trust might stipulate that the beneficiary should be 35 or some other age before receiving distributions. A trustee could also be put in charge of periodically making distributions. Some types of trusts do not permit creditors to seize assets. A trust could also be set up to provide in-home or nursing home care.

A person may want a revocable or irrevocable trust. Trusts may go into effect when they are signed while wills only do so at a person’s death.

People may want to contact an attorney about these and other estate planning questions. A will might still be the right choice for a fairly straightforward estate. People with blended families, including children from previous relationships, may want to be particularly careful that everyone is included in the estate plan. It can be easy to overlook documents such as beneficiary designations, which override wills and trusts that might have outdated choices for beneficiaries. All estate planning documents should be reviewed periodically to keep them updated.

Tips for creating an effective estate plan

By

According to a Caring.com study, only 42 percent of Americans have created any sort of estate plan. For Ohio residents who don’t have an estate plan, it is best to start one by creating a will. A will can dictate who receives certain assets or who is allowed to be a guardian of a minor child.

It is worth noting that a beneficiary designation trumps language put in a will. Therefore, it is important to review beneficiary designations on a 401(k) or other assets. Those who are concerned about going through probate may be able to avoid it by putting assets into a trust. Trusts are managed by a trustee, and he or she will make decisions based on rules that are made when it is created.

A living will may also be a worthwhile addition to an estate plan. It can help account for situations that may arise while a person is still alive. For instance, if a person is incapacitated, the language in such a document will determine how much medical treatment to provide. Regardless of how an estate plan is put together, an individual’s wishes should be communicated to a trustee or an executor on a regular basis.

The estate planning process is one that will ideally last for a person’s entire lifetime. In addition to thinking about how to transfer assets after passing, an individual may also benefit from accounting for issues that could occur while still alive. The use of a medical or financial power of attorney may make it easier to ensure that a person’s wishes are respected. An attorney may provide guidance in creating an effective estate plan.

Selling, keeping or splitting a business in a divorce

By

Owning a business can mean that a couple in Ohio has an additional complication when it comes to dividing property in a divorce. The first step they will need to take is having the company valuated. Once they know what the company is worth, they might want to sell it, but one person might also buy out the other, or they might continue to run it.

Selling may present some difficulties because it could take some time, and this might slow down the divorce process. While waiting for the business to sell, the couple will also have to decide how they will continue to run it and whether one of them will step aside.

Most couples opt for one to buy out the other. This can be done with a direct purchase of shares, and since it is due to divorce, it is usually not taxable. However, this requires the purchaser to have a certain amount of liquidity. Some people may need a settlement note that can be paid over a longer time period. The company might also be able to buy the shares of the spouse who is leaving, but this should be structured in a way that does not incur a large capital gains tax bill. Finally, some couples might agree that they want to continue running the business together despite the divorce.

Attorneys may be able to assist with these and other negotiations around property division in a divorce. Owning a business and other assets, such as valuable collections or real estate in other states or countries, may make the process more complicated, but a couple might still be able to negotiate an agreement out of court. Some couples prefer this since it leaves them more in control of the final divorce agreement, but litigation is an option if they cannot agree.

How Can We Help You Starting Now? Let’s Talk About It 614-485-8248
call

Give us a Call
text

Send us a Text
Call Today