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ESTATE PLANNING

SPECIAL SECTION | OCTOBER 15, 2020


HELPING CLIENTS PROTECT THEIR LEGACY Protecting what you have built for the next generation takes careful planning and an experienced partner who understands your goals and objectives and can tailor a plan to help you achieve them.

LET US KNOW HOW OUR ESTATE PLANNING TEAM CAN HELP

DANA M. DeCAPITE

Partner Current President, Estate Planning Council of Cleveland ddecapite@hahnlaw.com 216.274.2465

STEPHEN H. GARIEPY

CHRISTINA D. EVANS

M. PATRICIA CULLER

DOUG CARLSON

JOAN GROSS

FRANK C. KRASOVEC, JR.

CYNTHIA K. PORT

MATTHEW E. HENOCH

Partner, National Chair Estate Planning Group Former EPC President (1997–1998), Distinguished Estate Planner (2009) sgariepy@hahnlaw.com 216.274.2224

Partner, Cleveland Chair of Estate Planning Group Member, Estate Planning Council of Cleveland cdevans@hahnlaw.com 216.274.2442

At Hahn Loeser, we work with our clients to navigate the evolving tax laws, minimize tax exposure and create a strategy that will help you preserve your legacy.

Partner Former EPC Board Member, Distinguished Estate Planner (2010) mpculler@hahnlaw.com 216.274.2534

Senior Of Counsel jgross@hahnlaw.com 216.274.2277

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Of Counsel cport@hahnlaw.com 216.274.2316

Partner dcarlson@hahnlaw.com 216.274.2313

Of Counsel Member, Estate Planning Council of Cleveland fkrasovec@hahnlaw.com 216.274.2373

Associate mhenoch@hahnlaw.com 216.274.2466


estate planning council

PRESIDENT’S LETTER

2020/2021 BOARD OF DIRECTORS

Estate Planning Council offers multi-disciplinary expertise as a guide during uncertain times By Dana Marie DeCapite The Estate Planning Council of Cleveland is pleased to partner with Currents in presenting our inaugural estate planning special section. The intended purpose of this special section is to provide the community with timely and valuable information reflecting our Council’s multi-disciplinary approach to planning. The articles and commentary on the pages that follow have been authored by many of the region’s most knowledgeable professionals and cover topics related to estate planning, financial, insurance, business succession, and charitable planning. Estate planning is an often-overlooked aspect of personal financial management. Millions of Americans do not have an updated estate plan in place (including financial and medical directives), leaving them vulnerable and exposed in the event of unexpected illness, accident or untimely death. The year 2020 has presented two unique circumstances, thereby renewing interest in financial and estate planning: (1) the COVID-19 pandemic—and the resulting personal, financial and economic fallout; and (2) the upcoming United States presidential election—the outcome of which may drive change to the tax exemptions and rates applicable to decedents and their estates. This year has taught us that life can change unexpectedly, and it is important to prepare ourselves and our families for that possibility.

ESTATE PLANNING COUNCIL OF CLEVELAND AWARD RECIPIENTS 2020 Donald Laubacher, CPA, CFP®, AEP®, Sequoia Financial Group LLC – Distinguished Estate Planner 2020 Scott A. Gohn and Elaine B. Eisner, Eisner Gohn Group – Exceptional Service Award Recipients 2020

The 2020 exemption from gift, estate and generation-skipping transfer taxes is $11.58 million. This exemption could decrease as soon as early 2021, or as late as January 1, 2026—prompting many experts to suggest that now is the time to implement tax planning strategies and take advantage of the current favorable laws and conditions. In addition, The SECURE Act became effective January 1, 2020, causing a dramatic shift in the way qualified plans—such as Individual Retirement Accounts (IRAs) and 401(k) Plans—are required to be distributed and taxed upon the death of a plan owner. Finally, in March of 2020 the CARES Act was signed into law in response to the economic fallout of the COVID-19 pandemic, providing relief to individuals and businesses. In navigating these rapidly evolving topics, it is wise to seek the advice of experienced professionals who are familiar with the updated laws and possess tax and investment expertise. It makes sense to meet with your team of trusted advisors prior to year-end to discuss your ability to take advantage of potentially short-lived planning opportunities. In addition to tax-driven planning considerations, there are endless non-tax reasons to make certain your estate plan is reviewed and updated on a regular basis. Perhaps you have a disabled family member in need of a carefully curated inheritance. You may have specific wishes related to your end-of-life care and decisions to be made by others. You may have a family business that you wish to transfer to a fu-

ture generation or prepare for sale. Perhaps you have complex or significant charitable goals that you wish to fulfill as part of your overall plan. Regardless of your specific life situation, a shift in personal or financial circumstance oftentimes precipitates a review and update of your estate plan. The experienced professionals comprising the membership of the Estate Planning Council of Cleveland are prepared to evaluate your personal financial and estate planning goals considering the ever-changing tax, economic and legislative environment, as well as geopolitical considerations. Founded in the 1930s, the Estate Planning Council of Cleveland is a highly-regarded professional association comprised of more than 400 diverse professionals in the Greater Cleveland area, including attorneys, accountants, bankers and trust officers, financial planners, insurance agents, appraisers and representatives from charitable organizations. The Directory section of this publication and our website (www.epccleveland.org) can help identify professionals to assist you with your unique situation. We are pleased to present you with this special section in Currents and hope you find it to be a useful resource as you work with your advisors to plan for a sound financial future—for yourself and your heirs. Dana Marie DeCapite, Esq. is a partner at the law firm of Hahn, Loeser & Parks LLP. Contact her at ddecapite@hahnlaw.com or (216) 274-2465.

INSIDE

Estate Planning 4-14 Member Directory 15-19 Retirement and Business Succession Planning 20 Estate and Trust Administration 20 Insurance/Risk Management 21-22 Charitable Planning 24-28 Legislative Updates 30

PRESIDENT Dana M. DeCapite, Atty Hahn Loeser & Parks LLP VICE PRESIDENT Elaine B. Eisner, Atty Eisner Gohn Group SECRETARY Laura B. Springer, CRPC, CFP® Sequoia Financial Group LLC TREASURER Kimberly Stein, Atty Schneider Smeltz Spieth Bell LLP PROGRAM CHAIR Katherine E. Wensink, Atty McDonald Hopkins, LLC IMMEDIATE PAST PRESIDENT Peter Balunek, CFP®, CLU®, ChFC® Falls Advisory Group DIRECTORS Charles E. Federanich, AEP® Pease & Associates, Inc. Arthur E. Gibbs, III, Atty, AEP® Wickens, Herzer, Panza Sarah Hannibal, CPA, CFA Walden Wealth Partners, LLC Michael H. Novak Northern Trust Company David Rubis Fairport Wealth Barbara Theofolis, CPA Zinner & Co., LLP Jacklyn Vary, Atty Calfee, Halter & Griswold LLP Julie Weagraff Girl Scouts of North East Ohio ASSOCIATION STAFF Lauren Smigelski EPC Cleveland 1120 Chester Ave., Ste. 470 Cleveland, OH 44114 Phone: 216-696-1228 Fax: 216-696-2582 admin@epccleveland.org

ESTATE PLANNING COUNCIL OF CLEVELAND 3


estate planning ULMER & BERNE LLP

Advising Clients with Diminished Capacity By John R. Harrison, Counsel at Ulmer & Berne LLP Almost everyone has experienced having a loved one with diminished capacity. As a trusts and estates attorney, I have devoted a substantial amount of my practice to helping people with diminished capacity. Capacity is a clinical term involving the mental ability to understand one’s actions. Capacity varies by situation and can even vary by the time of day. An attorney should not assume advancing age equals declining capacity. Diminished capacity can happen for many rea-

sons, such as a stroke, accident, or psychological impairment. Conditions that cause incapacity may or may not be reversible. Determining this often requires reaching out to trusted third parties, such as loved ones and health care and other professionals, and always requires the observation and experience of a lawyer. While declining capacity may mean making changes to one’s estate plan is more difficult, it is not impossible. Estate planning is putting in place a plan for one’s health and financial concerns during life and for one’s assets upon death. Each facet of estate planning requires the proper degree of capacity. In lay terms, the capacity needed to make a will or trust requires the client to be able to understand that a will or trust is being made,

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to generally understand what she owns, to identify her family and those who would have a natural claim to her gift(s), and to understand her relationship to those people. In contrast, the capacity needed to appoint an agent to manage health care decisions requires the client to understand the nature, scope, and extent of what she is doing. Thus, making a health care power of attorney has nothing to do with knowing what one owns or who one’s family is. The client just needs to know that she is empowering someone she trusts to make health care decisions for her. It is important to seek out well-qualified legal counsel to represent a person with diminished capacity and for the lawyer involved to get a sense of what is really happening in the

client’s life. The decisions involving who a client places in positions of authority and to whom she gives her assets are of the highest importance. If the decisions seem natural and supportable, the attorney usually does not need to involve others. In situations that seem forced or unsupported, it may be important for the attorney to involve trusted third parties. Doing so increases the chances the client’s true wishes are followed. John R. Harrison serves as counsel in the Cleveland office of Ulmer & Berne LLP where he guides clients, particularly seniors and people with special needs, through the challenges of estate planning, guardianship, probate, and other trust and estate matters.


ESTATE PLANNING COUNCIL OF CLEVELAND 5


estate planning THE O’BRIEN LAW FIRM LLC

(TEN MORE) Top Estate Planning Mistakes By Michael J. O’Brien, Esq. In a prior edition of The Estate Planning Council of Cleveland Annual Planning Supplement, we wrote about The Top Ten Estate Planning Mistakes. Because that list (while subjective in nature) helped many individuals avoid those mistakes in doing their planning, we present here Ten More of the Top Estate Planning Mistakes we see on a regular basis. 1. Young adult children don’t need estate planning documents. They are your children and they still very much depend on you. It may be difficult to help them in an emergency situation with legal, financial, or health issues unless they have documents like Health Care Powers Of Attorney, Living Wills, and HIPAA authorizations once they attain the age of 18! 2. You don’t need to review old insurance policies. The insurance world has changed dramatically in recent years. All policies more than a few years old can and should be reviewed. Oftentimes old policies can be replaced with newer policies which have better

guarantees and lower cost. New hybrid policies offer both lifetime care and traditional death benefit, so insurance is no longer a “use it or lose it” proposition. 3. IRA planning isn’t necessary either! The SECURE Act passed by Congress in 2019 dramatically changed the rules pertaining to IRA accumulation but even more so to IRA distribution. Most planners believe this legislation effectively “killed the Stretch IRA.” Do you know the emerging preferred alternatives? How do you feel about your entire IRA being paid out to your children with full income taxation in a period no longer than ten years? 4. My Revocable Trust protects my estate from nursing home expenses. Preservation of assets from nursing home expense is not provided by typical revocable living trusts. Numerous planning options are available. 5. You can’t keep your assets in your family! Creditors and predators are everywhere. Sixty percent of all U.S. marriages end in divorce and litigation is rampant! Proper planning can insure that you leave your estate to your spouse, children and grandchildren, not to your child’s ex-spouse and/or creditors. 6. I can’t stop fights in my family about their inheritance! There are many things

you can do to minimize or eliminate fighting in your family. “No contest” provisions, third party (non-family) executors and trustees, and even pre-death court proceedings are available to avoid costly and notorious family fights. 7, 8, 9. All of my current estate planning and documents that I put in place two or five or ten years ago are fine. That may be true but probably isn’t. Families change, and the law keeps changing. Death and taxes may indeed be certain but end of life chaos and uncertainty for you and your family does not have to be. Effective planning is done early and often, not once and done. 10. Why should I care about (the original) Top Ten Estate Planning Mistakes or (Ten More) Top Estate Planning Mistakes? Because they are true. Because they will help protect you and your loved ones. Because you have worked hard your entire life to build your estate. Because you have paid lots of tax already. Because you deserve privacy with respect to your family matters. Because the possibility does exist that the estate tax system might someday be repealed. Also, a method might be discovered whereby our lifetime accumulation of property can be transferred economically, efficiently and honestly without law-

yers and courts and lengthy legal documents. For that matter, “they” may even find a way for us to “take it with us.” Don’t bet on any of these possibilities. Involve yourself with estate planning professionals who have the appropriate training to deal with this complex, personal planning arena. Put a plan in place now which addresses the common mistakes discussed in this article. You will be amazed by the sense of psychological and financial well being you realize for yourself and your family. Michael J. O’Brien is a practicing attorney and a founding partner of Cleveland-based The O’Brien Law Firm LLC. Mr. O’Brien’s firm emphasizes estate and trust planning and administration, probate, corporate planning, family business, family limited partnership and charitable trust and private family foundation planning. Mr. O’Brien has worked with many family businesses with regard to family transfers and succession planning. In addition, Mr. O’Brien is admitted to practice in Florida and has administered many Florida estates with attention to special probate and tax concerns involving property disposition in multiple states. He serves as a Trustee of several charitable foundations.

Dedicated to Helping Clients Protect Their Legacy. Trust is essential when choosing an advisor to help you protect your assets and preserve your legacy. Ulmer’s estate planning attorneys have decades of experience and will work with you to maximize opportunities, minimize risk, and create a customized strategy that provides peace of mind. • Estate Planning • Wills and Trusts • Succession Planning

• Probate and Trust Litigation • Tax Planning, Probate & Trust Administration

James A. Goldsmith jgoldsmith@ulmer.com 216.583.7114

Frederick N. Widen fwiden@ulmer.com 216.583.7340

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Linda DelaCourt Summers lsummers@ulmer.com 216.583.7212

• Special Planning for the Needs of Elders and Persons with a Disability

Stephanie M. Glavinos sglavinos@ulmer.com 216.583.7230

John R. Harrison jharrison@ulmer.com 216.583.7490

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estate planning FRANTZ WARD

Non-tax reasons for using trusts By David Weibel Many people are under the impression that trusts are only useful to the wealthy to take advantage of certain tax benefits. While taxes may be a consideration for the wealthy, there are many other reasons why a trust is a sound planning device for anyone regardless of whether taxes are a material concern. Probate Avoidance. Perhaps the most cited reason for using a trust is probate avoidance. Very simply, probate is a formal procedure under the jurisdiction of a court whereby a deceased individual’s property is administered and distributed. It is a public proceeding and, accordingly, the decedent’s last will and testament, an inventory of all the decedent’s assets and debts, and to whom the assets are distributed, are available to the curious. Very simply, there is no privacy and there is needless expense. Assets subject to the probate process are generally those that are held in the decedent’s name alone and which do not pass by way of a beneficiary designation or by operation of law. If those assets were instead held by a trust at death, or if those assets passed to the trust by way of a beneficiary designation,

then they would not be subject to the probate process, and instead they would be administered outside probate pursuant to the terms of a non-public trust agreement. However, just having a trust agreement is not enough. Assets must be transferred to the trustee of the trust prior to death to avoid the probate process. Many people fail to do this, and their estates end up in probate regardless of the existence of a trust. A good estate plan includes a concerted effort to fund one’s trust. While probate avoidance is an important consideration, asset management and asset protection are, in my view, far more important reasons for using trusts. There are both post-death and lifetime benefits that arise out of a trust and I will focus on those benefits for the remainder of this article. Young, Incapacitated, and At-Risk Beneficiaries. If assets pass to young, incapacitated, or financially at-risk beneficiaries pursuant to a probate proceeding, or even by virtue of a mere beneficiary designation, the basic rule is that the beneficiaries control those assets at age 18, regardless of their ability to handle such amounts. In many instances there are beneficiaries who, regardless of age, may have unstable marriages, over-generous natures, poor judgment in personal relationships, substance abuse problems, creditor problems, or are en-

gaged in a business or profession that lends itself to litigation. In these instances, a trust can serve as a safety net which provides for their needs while, at the same time, protects them and their inherited property from claims arising out of these circumstances. A carefully crafted trust allows for a financially mature individual, or a bank or trust company, to manage the assets for the benefit of the intended beneficiary, and that period of management can extend for many years beyond age 18. In fact, it is common for the period of administration to last for the beneficiary’s entire lifetime if appropriate. During the period of administration, the trustee can distribute to or expend for the benefit of the beneficiary the amounts necessary to provide for the beneficiary’s health, education, maintenance, support, or for any other purposes that may be designated in the trust agreement, and generally the outside world cannot get to those assets. It is quite common to allow the beneficiary to become the trustee of his or her own trust at a later point in time while, at the same time, maintaining the privacy and asset protection considerations that were drafted into the trust agreement. Personal Incapacity. An effective estate plan includes planning for one’s own incapacity. Without that, one may need to be placed under

a guardianship, which is another court-supervised public proceeding. Powers of attorney can help, but no financial institution is required to honor them, and there are a few of them that will not. There are many others make it almost impossible for an agent under a power of attorney to obtain quick access to accounts. This can cause a lot of frustration and missed payments. A far better solution is a funded trust of which the creator of the trust is both the trustee and the beneficiary during lifetime, and which thereafter is administered for the post-death intended beneficiaries. Upon the initial trustee’s incapacity, a successor named in the trust agreement simply steps into the position of the incapacitated trustee and continues to administer the trust. A financial institution cannot deny a successor trustee’s access to the trust assets. There are many more reasons to use trusts in one’s estate planning, but those described above are enough to cause everyone to consider them seriously. It is a protection and privacy issue, and not necessarily a wealth or tax issue. David G. Weibel is a Partner and Chair of the Transactional Practices Group within the Business/Corporate Law Group at Frantz Ward LLP. He has over 40 years of experience counseling clients on all aspects of business law, estate and gift planning, federal taxation and ERISA.

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estate planning TUCKER ELLIS LLP

The Dynasty Trust: An excellent technique to transfer wealth to multiple generations By Bill Beseth You have worked hard to create wealth by growing a business, making smart real estate investments, investing in the stock market, and/or saving for retirement. You want to ensure that your hard-earned wealth will benefit your family for generations to come. At the same time, you desire to minimize estate and gift taxes, maintain privacy, and protect the assets for your beneficiaries. A Dynasty Trust is a powerful tool to accomplish all of these aspirations and more. Under Ohio law, a Dynasty Trust can continue in perpetuity, effectively allowing you to create a lasting family legacy. A Dynasty Trust allows you to control how your wealth is managed and distributed to the beneficiaries for generations. Distributions can be

made to beneficiaries for the reasons and purposes determined by you, and any undistributed amounts can remain in the trust to grow. With a Dynasty Trust, you can limit the beneficiaries to only your descendants and prevent trust assets from going to others. However, you may also provide flexibility to each generation regarding the continuation of the trust for the next generation. As an additional benefit, if the assets remain in the trust, they can be protected from a beneficiary’s creditors. With respect to the management of trust assets, you can permit a beneficiary to act as the trustee of the beneficiary’s respective trust. If beneficial, you may name an investment advisor to oversee the investment of trust assets, a business trustee to operate a business owned in the trust, and/or a professional trustee to assist in administering the trust. You can provide guidelines for the management of complex assets, such as a

A Dynasty Trust can provide estate tax savings for multiple generations, regardless of the growth of the assets or duration of the trust, and be used to avoid probate. family business. A Dynasty Trust can provide estate tax savings for multiple generations, regardless of the growth of the assets or duration of the trust, and be used to avoid probate. A revocable Dynasty Trust can be held for you and your spouse’s benefit with the provisions for the next generation taking effect at the surviving spouse’s death. You can also establish an irrevocable Dynasty Trust and make lifetime gifts. Now is an excellent time to do so. In 2020, the total amount you can transfer es-

tate/gift tax free is $11,580,000, but is scheduled to be significantly reduced on December 31, 2025. With so much at stake, it is important to consult with an experienced attorney to help design the best plan that preserves and protects your family’s wealth. Bill Beseth is an attorney at Tucker Ellis LLP in Cleveland. He focuses his practice in the areas of estate planning, probate and trust administration, and fiduciary and probate litigation. An Accredited Estate Planner® certified by the National Association of Estate Planners & Councils (NAEPC), Bill is a trusted advisor to individuals, families, and business owners helping them establish effective and dynamic estate plans with the goal of maximizing wealth during one’s lifetime and for future generations. He has been selected by his peers for inclusion in The Best Lawyers in America© for 2021.

CALFEE, HALTER & GRISWOLD LLP

USE IT OR LOSE IT – the importance of planning now to make use of the federal exemption from gift and estate taxes By Joseph M. Mentrek, Calfee, Halter & Griswold LLP This article highlights the need for near-term planning – “use it or lose it” – to make effective use of your federal exemption from gift and estate taxes.

Setting the Stage The federal exemption from gift and estate taxes represents the amount which an individual can give away during his or her lifetime, or at death, without the imposition of gift or estate taxes. The exemption is currently at an all-time high - $11.58 million per person/$23.16 million per couple, with an annual inflationary adjustment. Large, yes – but also temporary. The current statutory exemption amount is $5 million increased by an annual adjustment for inflation. Tax reform enacted late in 2017 doubled the exemption, but a special rule associated with laws reducing federal taxes required that the reduction would sunset within ten years of enactment. Thus, under current law, the exemption is scheduled to revert to $5 million (plus inflationary adjustments since 2012) on January 1, 2026. With significant uncertainty regarding the outcomes of the upcoming presidential and congressional elections, coupled with pressure on Congress to find ways to pay

for pandemic stimulus packages, many believe that there is a strong possibility of a sizeable reduction in the exemption (to $5 million or less) as early as 2021.

Understanding “Use It or Lose It” - An Example To make effective use of the current high exemption, it is necessary to give away more than the amount of the exemption which will remain after any reduction. For instance, if you give away $5 million of your $11.58 exemption now, and the exemption drops to $5 million in 2026 (or earlier), you will have used $5 million of your exemption. You will have no remaining exemption available for future planning other than the annual inflationary adjustments. So, $6.58 million of your exemption (calculated using 2020 amounts) will no longer be available and will be “lost.” To use it, you would need to part with more than $5 million (or whatever the size of the reduced exemption turns out to be) before the reduction takes effect. In other words, use of the exemption is accomplished from the bottom up, not from the top down, so significant gifting in excess of the $5 million statutory base amount is required to utilize the extra band of exemption that resulted from the temporary doubling.

Factors to Consider When Planning to Use Exemption

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When determining how much of your exemption to use, you will want to consider, first and foremost, how much you need to maintain your lifestyle and to provide for contingencies such as significant market downturns or extraordinary health care expenses.

Specific Planning Options There are many options for making use of your exemption, which would be tailored to your specific circumstances. If ongoing access to assets is not important to you, your gift may be made outright or in trust. For gifts in trust, the type of trust and its provisions will depend upon your goals for your family, the nature of your assets (for instance, whether you have closely held business interests), and the amount of exemption you have remaining, among other factors. If the retention of access to the assets is important to you, favored options are the “Spousal Limited Access Trust” (“SLAT”), or a self-settled asset protection trust (known in Ohio as the “Ohio Legacy Trust” and more generally as a “DAPT” or “Domestic Asset Protection Trust”).

What Else Might Be Lost Significant reduction in the Federal exemption is but a part of the challenge we are facing. Under various proposals, the most effective tools for transferring assets and preserving family wealth may also be on the block by 2021. Other proposed changes that

may be effective by 2021 include significant increases in transfer tax rates, loss of the income tax step up in basis for assets owned at death, significant curtailment of the ability to make “annual exclusion” gifts, reduction or elimination of valuation discounts for transferred assets, significant limits on the planning benefits associated with the use of grantor trusts, and shortening the maximum possible duration of family “dynasty” trusts.

Do It Now! It should be apparent that we are at a pivotal moment in the history of planning for family wealth preservation. The critical message: the time to start planning is now. Effective planning and implementation of that planning takes time. If you wait, you risk losing a significant window of opportunity. 1. The related federal exemption from the generation-skipping transfer tax, also under attack, is not discussed here. 2. The exemption does not limit the amount which can be given to a spouse. Joseph M. Mentrek is a Partner and Chair of Calfee, Halter & Griswold’s Estate and Succession Planning and Administration group where he provides counsel to high-net-worth individuals and families, closely held business owners, corporate executives and nonprofit organizations. He may be reached at 216.622.8866, jmentrek@calfee.com or visit Calfee.com.


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estate planning SINGERMAN, MILLS, DESBERG & KAUNTZ CO., L.P.A.

Estate Planning and Covid-19 By Abbie R. Pappas, Esq. The COVID-19 pandemic has highlighted the need for thorough estate planning, while simultaneously making it difficult for clients to get their estate planning documents in place. However, estate planners can utilize creative solutions to help clients complete or update their estate plans while safely adhering to “social distancing” guidelines. Essential Estate Planning Documents and Strategies: As most people know, a Last Will and Testament governs the disposition of assets at death, and names an Executor to oversee that disposition and a Guardian for minor children. For obvious reasons, essential workers and other high-risk individuals are eager to get their Wills in place as the COVID-19 pandemic continues. However, other documents, such as

Healthcare Powers of Attorney and Living Wills, help ensure that clients’ intentions are achieved when they are incapacitated or unavailable (for example, during a hospitalization). For example, clients should consider revisiting their Living Wills to ensure that they reflect their intentions with respect to COVID-related treatment. Furthermore, college-aged kids should put documents in place allowing family members to act on their behalf if they fall ill. Clients should also have Durable General (“financial”) Powers of Attorney in place, so that their desired agents can act on their behalf with respect to nonhealthcare-related matters. For clients with greater wealth or more sophisticated assets, different types of trusts serve a multitude of purposes, including tax planning, asset management, and provisions for minor children. High net-worth clients can take advantage of this year’s historically low interest rates by making intra-family loans or setting up “estate freezing” trusts such as Grantor Retained Annuity Trusts (“GRATs”).

Estate planners can utilize creative solutions to help clients complete or update their estate plans while safely adhering to “social distancing” guidelines. Accomplishing Document Executions During the Pandemic: Under Ohio law, a Will must be signed in the physical presence of two disinterested witnesses. Other types of Ohio estate planning documents, such as trusts, Healthcare Powers of Attorney or Living Wills, do not require witnesses if the documents are signed before a notary. Unlike in some other states, there has been no legislation during the pandemic which would alleviate Ohio’s in-person Will witnessing requirement (although proposed

legislation which would allow for electronic Will witnessing is under review). However, a 2019 act now allows for Ohio notarizations to be performed electronically by speciallyauthorized “online notaries.” Many attorneys have developed creative solutions to help clients safely sign their estate planning documents while adhering to Ohio’s social distancing guidelines, such as by meeting clients outdoors and acting as witnesses from a safe distance, or even from inside a car. For documents that require only notarization, many firms now offer online notarization services over videoconferencing platforms such as Zoom. Clients should speak with their attorneys about getting their estate plans in place without compromising necessary COVID safety standards. Abbie R. Pappas is an Estate Planning and Probate Associate Attorney at Singerman, Mills, Desberg & Kauntz Co., L.P.A. in Beachwood, Ohio.

At Girl Scouts, we believe every girl deserves the confidence to dream big and build a better world. For over 108 years, we have proudly encouraged girls to do anything they set their sights on. And we can’t wait to see how today’s girls will change our world tomorrow. By including Girl Scouts in your legacy planning, you can help us continue building girls of courage, confidence, and character, who make the world a better place.

INVEST IN GIRLS. Change the World. to learn how you can create a legacy for future female leaders, contact Julie Weagraff, CFRE by email at jweagraff@gsneo.org or by phone 330.983.0399 gsneo.org

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estate planning McDONALD HOPKINS

The importance of lifetime directives By Katherine E. Wensink, Esq. When it comes to estate planning, so much time is spent considering what happens upon death – whether for estate tax reasons or how special items will be distributed – people often forget about the importance of having a lifetime plan. If you are incapacitated, financial powers of attorney and health care directives are critical for allowing the person you have designated to step in to make financial or health care decisions. Consider the implications of the scenario below. Miles and Steve, an unmarried couple, have

been together for 30 years. While out hiking in the Metroparks, Miles suffered a stroke and was incapacitated while being transported to the hospital. When Steve arrived at the hospital, he was not allowed to see Miles. Miles is an only child whose parents are deceased and who has no other family, and the hospital would not communicate with Steve. The nightmare Steve lived could have been avoided with a few simple documents: Health Care Directive – Health Care Power of Attorney – A Health Care Power of Attorney avoids the necessity of a court appointed guardianship, which can be expensive and public. In this case, had Miles executed a Health Care Power of Attorney appointing Steve his agent (with their neighbor as an

alternate), Steve could have easily stepped into Miles’ shoes to make necessary health care decisions when Miles was incapacitated These documents can be revoked or amended at any time, assuming competency. Once a person recovers the agent’s duty ceases. Health Care Directive – HIPAA Authorization – This allows named individuals to receive health updates. In the example above, Steve and other close friends Miles named could have called the hospital to receive updates on Miles’ condition, though only Steve (as his Health Care Power of Attorney) could make decisions. Health Care Directive – Living Will – A Living Will expresses whether someone wants life sustaining treatment. Financial Durable Power of Attorney – A

Durable Power of Attorney names someone to transact financial affairs. This includes, but is not limited to, paying bills, filing taxes, and handling business interests. In this case, it was especially important because Miles runs a successful business in which he is the sole proprietor. Had Steve been named Durable Power of Attorney, he could have handled Miles’ assets that are not jointly owned without the cost and publicity of a court appointed guardianship. Kate is an experienced estate planning attorney and a Member in the Tax and Benefits Department at McDonald Hopkins. She focuses on advising business owners, executives, and professionals along with their families in all areas of estate, business succession, charitable and tax planning.

ESTATE PLANNING COUNCIL OF CLEVELAND 11


estate planning GLENMEDE

Achieving financial goals in an age of uncertainty By Linda Olejko Earning a benchmark rate of return or beating a market index may feel good at the time, but how does it impact your life, your future and your ability to sleep well at night? Without a doubt, earning a return of 8 percent, instead of 6 percent, will produce more wealth. But is the additional risk worth the possibility that, in a down market, your assets might not cover your needs or meet your goals? At Glenmede, we believe that achieving a high rate of return or beating a benchmark doesn’t tell you what you need to know. What matters most is meeting your personal financial benchmark — the level of wealth required to live a desired lifestyle and achieve your important goals, including those relating to legacy and philanthropy. This requires a different process — starting with a thorough understanding of your short- and long-term financial goals and then devising a wealth plan and investment strategy to achieve them in a quantifiable way.

Creating a personal financial benchmark — based on your goals Constructing a personal financial benchmark requires knowing your financial goals — how you plan to use your wealth. Goals can be as diverse and varied as any group of families or individuals. Generally, though, they come in three categories: • Lifestyle — having enough money to sustain your spending • Legacy — passing assets to your family and loved ones • Philanthropy — funding your charitable passions For many, setting financial goals can be the hardest part of goals-based planning. But it

Currents

needn’t be overwhelming. Trusted advisors can talk you through the options and share the ideas and experiences of others in similar situations. Another comforting fact: A goals-based process doesn’t mean settling on a single well-defined and final set of objectives. You can make your best guess and, using flexible technology, test and compare any number of different scenarios.

Measuring the probability of success In a goals-based approach to investment and wealth planning, the benchmark becomes the estimated probability of success in achieving your goals. This benchmark requires a different and more integrated approach to wealth advisory. Unlike traditional approaches that treat wealth planning, trust advisory and investment management as separate disciplines, requiring separate discussions with different experts, goals- based planning views them holistically. The actual process typically involves using sophisticated computer technology to simulate thousands of potential market scenarios, spanning the range from earning below- normal, normal and above-normal returns. These simulations can incorporate your specific goals and combine them with your financial data, including spending needs, retirement and deferred compensation plans, charitable accounts, trust mandates, accounts for children and other financial details. The resulting wealth projections make it possible to estimate the likelihood that your investments will earn enough to meet various personal goals —your probability of success. Generally, we recommend that investors adopt a set of investing and wealth planning strategies that provide an 85 percent or greater probability of meeting their goals. If you’re uncertain about your goals — for example, you may or may not decide to buy a second house — we recommend creating alternate plans to determine whether you can still

achieve an 85 percent probability of success.

A measurable margin of safety Another useful benchmark, the fixed-income reserve, estimates the number of years your cash and fixed-income assets would last if they had to cover your personal spending needs. In the event of an extended equity bear market, defined as a 20 percent market drop, the reserve would allow you to spend cash and fixed-income assets without having to sell equity assets at depressed values. Ideally, the reserve should last through a bear market of 15 months, the average length of nine bear markets since 1956. A more cautious approach might be to build a sufficient reserve to withstand a sustained market downturn, like the Great Depression, from which equity markets didn’t recover for 25 years in nominal terms, or about five years when adjusted for inflation, dividends and a broader market comparison. Some might argue that this measure is unnecessary if you are already arriving at an acceptable probability of success. But others may find this to be a particularly comforting and tangible form of benchmarking.

Monitoring your financial benchmark over time Goals-based investment and wealth plan-

ning is not unlike embarking on a long voyage. At each stage along the way, you set your direction by establishing your current goals and benchmarking your probability of success and fixed-income reserve. Your port of destination may indeed change, and no journey is without ups and downs. In any event, when you select an investment and wealth planning strategy that best meets your goals, you can achieve peace of mind. Goals-based investment and wealth planning is not unlike embarking on a long voyage. At each stage along the way, you set your direction by establishing your current goals and benchmarking your probability of success and fixed-income reserve. Your port of destination may indeed change, and no journey is without ups and downs. In any event, when you select an investment and wealth planning strategy that best meets your goals, you can achieve peace of mind. Linda Olejko is a Business Development Director for Glenmede. She is responsible for client development and cultivating and maintaining relationships with endowments, foundations, tax-exempt entities and highnet-worth families. Mrs. Olejko has 30+ of industry experience and was recognized as one of Crain’s Cleveland Business’ Most Influential Women in Finance 2017.

Publishing Nov. 19, 2020

Charitable Giving

With November often serving as the advent of the season of giving, Currents annually presents a special section devoted to nonprofits in need of donations and dollars, as well as various avenues of planned giving (trusts, donor advised funds, charitable gift annuities and IRA rollovers, etc). Nonprofits, financial and tax advisors, estate planners, and more advertise in Currents’ November and December issues when readers are focused on philanthropy and giving throughout the holiday season.

Call 440.247.5335

to secure your advertising space 12 | ESTATE PLANNING COUNCIL OF CLEVELAND

For a no-obligation illustration, contact Jenifer Warren:

216.400.7036 • jwarren@clevelandplayhouse.com


estate planning NORTH COAST EXECUTIVE CONSULTING

How Employee Stock Options Work: Basics of ISOs and NSOs By Philip Moshier and Mark O’Sickey in conjunction with North Coast Executive Consulting Many successful companies know the importance of rewarding and retaining key employees. One tool your employer may use is to offer stock options. Stock options give employees the opportunity to profit directly from their contribution to the success of the company. As a company’s financial strength improves, this is often reflected in the increased price and market value of the company’s stock. Two common types granted to employees

are Incentive Stock Options (ISOs) and NonQualified Stock Options (NSOs).

within three months following employment termination.

stock after exercising the option will be capital gain or loss.

ISOs

NSOs

ISOs are mainly awarded to top executives or other key employees the employer wants to attract, incentivize, and/or retain. For these employees, it can represent a large portion of overall compensation. ISOs are granted by the employer and give the employee the right to purchase shares of the company’s stock at a set time and predetermined purchase price. Depending on the structure of the plan, if when they exercise the options, certain requirements are satisfied, an employee can receive favorable capital gains treatment. The term to exercise an option may be no more than ten years from the adoption of the stock option plan or approval by shareholders, whichever is earlier. Additionally, options must be exercised while employed or

With NSOs, an employer gives the employee the right to purchase a specific number of shares at a predetermined price (both requirements set by the company). These options may be offered to a wider base of employees—including independent contractors—to create an atmosphere of shared rewards. In fact, depending on the value of the option at the time exercised, a substantial amount of income could be added to the employee’s tax return. From a tax standpoint—assuming no election was made under the Section 83(b) tax laws—the excess of the fair market value of the stock over the option exercise price is considered ordinary income. Any appreciation or depreciation of the

Speak with a professional Understanding how options work and deciding when and how to exercise them can be challenging, especially when it comes to the legal and tax requirements. Speak with your financial professional to help ensure you’re getting the most out of your stock option awards. Also ask about the benefits of other popular types of executive compensation you may have received, such as restricted and performance stock options. *The content of this material was provided to you by North Coast Executive Consulting for its representatives and their clients. This article may be picked up by other publications under planner’s bylines.

November Currents | Charitable Giving | Call 440.247.5335 ESTATE PLANNING COUNCIL OF CLEVELAND 13


estate planning HAHN, LOESER & PARKS LLP

It’s All in the Family: Have Your Cake & Eat it (Too)! By Dana Marie DeCapite For many families, the resounding goal related wealth transfer to future generations is an assurance that the wealth will “stay in the family” regardless of the death, divorce or disability of a trust beneficiary. As such, the use of a dynastic “Bloodline Trust” in estate planning has renewed popularity, due largely to the fact that the modern Bloodline Trust can be drafted in a flexible manner to account for future changes in a beneficiary’s life or circumstance. As a result, what was historically viewed as “controlling from the grave” remains an effective planning technique that is now favored by trust creators and future trust beneficiaries alike.

What is a Bloodline Trust? The key feature in dynastic planning is the duration of the trust. A carefully drafted Bloodline Trust allows for the Trust (and therefore its underlying assets) to remain in existence for the lifetimes of many generations of Trust beneficiaries. The result is the preservation of wealth for successive generations and embedded asset protection. In addition, a Bloodline Trust typically contemplates that the Trustee may discretionarily distribute the Trust assets for a beneficiary’s health, education, maintenance and support (commonly known as the “HEMS standards”). The assets then remain in the Bloodline Trust for the beneficiary’s lifetime, with the Trustee making regular HEMS distributions to the beneficiary. Upon the beneficiary’s death, the Bloodline Trust assets are further distributed to the beneficiary’s children, to be held in a Trust in the same manner.

Flexibility and Bloodline Trusts Historically, the pitfall of dynastic planning has been the rigid Trust structure, which failed to provide for unanticipated life circumstances and financial needs of future generations. However, with the appropriate flexibility tools drafted into the Bloodline Trust —the grantor (creator) of the Trust can have her cake and eat it (too). That is, the creator can implement a Bloodline Trust that will exist for many generations but can also provide for the unforeseen future. First, the grantor may consider naming an independent Trust Advisor with the power to make distributions beyond the HEMS distribution standards. This allows for Trust beneficiaries to seek the use of Trust funds for occasions that are categorically extraordinary, but remain important to the grantor, such as: purchase of a residence, wedding expenses or the start-up or purchase of a business. Second, the grantor may consider naming a Trust Protector with the power to remove and replace the standing Trustee. This power can be as broad or as strict as desired, but generally incentivizes Trustee performance and empowers future generations with some level of control over the party governing distributions. Third, the grantor may consider allowing

14 | ESTATE PLANNING COUNCIL OF CLEVELAND

the beneficiary to have a “limited power of appointment,” wherein the beneficiary retains the ability to control the ultimate disposition of his/her share of the Bloodline Trust among a limited group of predetermined individuals in a predetermined manner. Fourth, the grantor may consider the careful definition of the terms “children,” “grandchildren” and “descendants” within the Bloodline Trust—to include those who are legally adopted. These flexibility planning points allow future generations to (1) seek distributions from the trust for extraordinary purposes, with oversight by an independent party; (2) remove and replace a Trustee when appropriate; and (3) reallocate the trust property among their descendants (broadly defined) when appropriate.

Bloodline Trusts: A Case Study Nadine and Shawn have two adult sons, Connor and Nicholas. Nadine and Shawn create a Bloodline Trust for each of Connor and Nicholas and name National Bank as Trustee. Both Connor and Nicholas survive their parents. Connor is recently married to Maggie, and they have one child named Delaney. Maggie also has a child from a previous marriage, named Lisa. Following the death of Connor’s parents, he and Maggie are in the process of divorcing when Connor dies suddenly without his own personal estate plan. Due to the terms of the Bloodline Trust created for Connor, his Trust is now preserved for Delaney without concern that his inherited wealth will be distributed to Maggie or Lisa. Nicholas is married to Sarah, and together they have two children, Enzo (adopted by both Nicholas and Sarah) and Tyler. Tyler is a newborn when his grandparents, Nadine and Shawn, are both deceased. Tyler is diagnosed with a disability when he is a toddler, the longterm effects of which are unknown. Nicholas engages an estate planning team to assist him in planning for the inherited wealth from his parents, specifically to (1) address his concerns about the proper planning for his disabled son, Tyler; and (2) discuss the fact that Tyler may need more assets to pay living expenses into adulthood. Nicholas is advised to exercise the limited power of appointment granted to him by his parents and to allocate 60% of his inherited wealth to a separate Special Needs Trust for Tyler’s benefit; and 40% of his inherited wealth to Enzo in a typical Bloodline Trust.

Conclusion While a Bloodline Trust is a powerful wealth-preservation planning tool, the trust creator can and should simultaneously consider that future generations may experience unforeseen circumstances which can be accommodated by using certain estate planning tools designed to increase flexibility in an otherwise very rigid trust structure. Dana Marie DeCapite, Esq. is a partner at the law firm of Hahn, Loeser & Parks LLP. Contact her at ddecapite@hahnlaw.com or (216) 274-2465.


ACCOUNTING PROFESSIONALS

Mary Lynne Baranek, CPA Barnes Wendling CPAs, Inc. lb@barneswendling.com

OF

ND

ESTAT E

I N AN

C OUN C I L G N

Heather A. Archdeacon, CPA Stan Bazan & Company hcornellcpa@aol.com

EL A EV CL

PL

DeAnna Alger, CPA Zinner & Co., LLP dalger@zinnerco.com

Alane Boffa, CPA, MT, AEP® Cohen & Company, Ltd. aboffa@cohencpa.com Tami M. Bolder, CPA/ABV, ASA, MBA, DBA CBIZ Valuation Group, LLC tmbolder@cbiz.com Christopher Paul Bray, Atty, CPA Bray Capital Advisors, LLC cpbray@braycapitaladvisors.com Bethany J. Bryant, CPA, CSOP, AEP® The Private Trust Company, N.A. bjb@privatetrustcompanyna.com Lynda Doland, CPA ,MT Corrigan Krause CPAs lynda@corrigankrause.com Charles E. Federanich, CPA, MT, AEP® Pease & Associates, LLC cfederanich@peasecpa.com

DIRECTORY

Melissa S. Gallop, CPA Meaden & Moore, Ltd. mgallop@meadenmoore.com Naomi D. Ganoe, CPA, CFP®, MT, AEP® CBIZ MHM, LLC nganoe@cbiz.com Kimberly Heman, JD Sequoia Financial Group kheman@sequoia-financial.com Toby Kaye, CPA, Mtax Apple Growth Partners tkaye@applegrowth.com Victor G. Kmetich VGK Financial Services, LLC vic.kmetich@vgkfs.com James R. Komos, CPA, CFP® Ciuni & Panichi, Inc. jkomos@cp-advisors.com Thomas W. Krause, CPA Corrigan Krause tom@corrigankrause.com Dennis A. Linden, CPA CBIZ MHM, LLC dlinden@cbiz.com Stanley J. Majkrzak, CPA, CFP® HW Financial Advisors majkrzak@hwfa.com Adam L. Martinson, CPA Grant Thornton LLP adam.martinson@us.gt.com Nancy McCann InMotion nmccann@beinmotion.org Karen M. McCarthy, CPA, AEP® Meaden & Moore, Ltd. kmccarthy@meadenmoore.com Michael J. Monroe, CPA, JD Hawthorn, PNC Family Wealth michael.monroe@hawthorn.pnc.com

ESTATE PLANNING COUNCIL OF CLEVELAND 15


estate planning council directory Robert Nemeth Apple Growth Partners rnemeth@applegrowth.com

Donald F. Zwilling, CPA/ABV Barnes Wendling CPAs Inc. dfz@barneswendling.com

Robert J. O’Neil, CPA Corrigan Krause CPAs robert@corrigankrause.com

ATTORNEYS

Terry Ann Donner, Atty Terry Ann Donner Law Office LLC terrydonner@sbcglobal.net; terry@ terrydonnerlaw.com

Tanzie D. Adams, Atty tanzie.adams@gmail.com

Therese Sweeney Drake, Atty Therese Sweeney Drake LLC tsweeneydrake@gmail.com

Charles F. Adler, III, AEP® Schneider Smeltz Spieth Bell LLP cadler@sssb-law.com

William A. Duncan Frantz Ward LLP wduncan@frantzward.com

Carrie A. Rosko, CPA Cornerstone Family Office, LLC crosko@crnstn.com

Jennifer M. Allen, Esq. Williams Allen Casey LPA jen@lifedesignlaw.com

Stephanie Sandle, CPA, CFP®, AEP® MAI Capital Management ssandle@mai.capital

Kemper D. Arnold, Esq., AEP®, AIF® Vantage Financial Group, Inc. karnold@vanfin.com

Carl J. Dyczek, Atty Buckingham, Doolittle & Burroughs, LLC cdyczek@bdblaw.com

Doris A. Seifert-Day, CPA Rea & Associates, Inc. doris.day@reacpa.com

James S. Aussem, AEP® Cavitch, Familo, Durkin Co., LPA jaussem@cavitch.com

Emily Shacklett, CPA Fairport Wealth Management LLC emily.shacklett@fairportwealth.com

Brian M. Banjac, JD, CFP®, CTFA Key Bank, National Association brian_m_banjac@keybank.com

Kyra Shank, CPA, MT CBIZ kshank@cbiz.com

Kimberly J. Baranovich, Atty The O’Brien Law Firm LLC kimberly.baranovich@obrienlaw.net

Douglas E. Shostek, CPA Tax & Wealth Management, Inc. dshostek@taxandwealth.net

H. William Beseth, III, Atty, AEP® Tucker Ellis LLP bill.beseth@tuckerellis.com

Mark A. Skvoretz, CPA/PFS, CVA Wasacz & Skvoretz Ltd. mskvoretz@yahoo.com

Ashton E. M. Bizzarri, Atty Stark & Knoll, Co., L.P.A. Abizzarri@Stark-Knoll.com

Sondra L. Sofranko, CPA Barnes Wendling CPAs, Inc. sls@barneswendling.com

Herbert L. Braverman, Esq. hlblaw@aol.com

Elton H. Riemer, CPA, CSEP, EA Joyce M. & Herbert W. Stielau Foundation eriemer@riemerblum.com

Jessica Tepus, CPA Bober Markey Fedorovich jtepus@bmfcpa.com Barbara Theofilos, CPA Zinner & Co., LLP btheofilos@zinnerco.com Floyd A. Trouten, III, CPA Barnes Wendling fat@barneswendling.com Stephenie Truong, CPA Cohen & Company, Ltd. struong@cohencpa.com Mary Eileen Vitale, CPA, CFP®, AEP® HW&Co. vitale@hwco.com Robert W. Wasacz, CPA/ABV, CVA Wasacz & Skvoretz Ltd. rwasacz@yahoo.com Geoffrey B.C. Williams, CPA, AEP®, CEPA Hawthorn, PNC Family Wealth gbcwilliams@gmail.com Teresa M. Wisniewski, CPA Rea & Associates, Inc. teresa.wisniewski@reacpa.com Matthew D. Wojtowicz, CPA Cerity Partners mwojtowicz@ceritypartners.com Michael J. Zeleznik, CPA, MT, ABV, AEP® Zeleznik & Associates, LLC mikez@mzbizval.com

Michael E. Ernewein Kolick, Georgeadis & Ernewein Co. mernewein@kgecolpa.com Christina D. Evans, Atty Hahn Loeser & Parks LLP cdevans@hahnlaw.com Susan M. Evans Lustig, Evans & Lucas Co., LPA susan.evans@lellaw.com Joseph M. Ferraro, Atty Tucker Ellis LLP joseph.ferraro@tuckerellis.com William Charles Ferry, Esq. Yourkvitch & Dibo, LLC wferry@goydlaw.com J. Paul Fidler, AEP® Schneider Smeltz Spieth Bell LLP jfidler@sssb-law.com

Christopher M. Greene, Atty Christopher M. Greene, Esq., LLC chris@chrismgreene.com Nancy Hancock Griffith, JD BauerGriffith LLC nancygriffith@bauergriffith.com John D. Gulas Amada Senior Care Cleveland John.g@amadaseniorcare.com Ellen E. Halfon, JD Case Western Reserve University eeh78@case.edu Jennifer R. Hallos, Atty McCarthy, Lebit, Crystal & Liffman Co., LPA jrh@mccarthylebit.com John R. Harrison Ulmer & Berne LLP jharrison@ulmer.com Mark L. Hoffman, Atty hoffman@markhoffmanlaw.com Harold L. Hom Harold L. Hom, Co., L.P.A. harold@homlaw.net Michael J. Horvitz Parkland Management Company mjhorvitz@horvitz.com Barbara Bellin Janovitz, AEP® Reminger Co., L.P.A. bjanovitz@reminger.com Matthew F. Kadish, Esq. Frantz Ward LLP mkadish@frantzward.com

James R. Bright Schneider Smeltz Spieth Bell LLP jbright@sssb-law.com

Julie E. Firestone, Atty, CPA (inactive), AEP® Brouse McDowell jfirestone@brouse.com

Don P. Brown Don P. Brown, Attorney at Law dpbrown@ameritech.net

Amy K. Friedmann, Atty Calfee, Halter & Griswold LLP afriedmann@calfee.com

Joseph W. Kampman Ziegler Metzger LLP jkampman@zieglermetzger.com

C. Richard Brubaker, Esq. C. Richard Brubaker Co., L.L.C dick@brubakerlaw.net

Robert R. Galloway, Atty Baker & Hostetter LLP rgalloway@bakerlaw.com

John J. Kelley, III John J. Kelley Co., LPA jjk@kelleycolpa.com

Samuel V. Butcher, Esq., RPh Butcher Elder Law, LTD. samb@butcherelderlaw.com

Stephen H. Gariepy Hahn Loeser & Parks LLP sgariepy@hahnlaw.com

Paul S. Klug Ziegler Metzger LLP pklug@zieglermetzger.com

Leigh H. Carter, JD Glenmede leigh.carter@glenmede.com

Kyle B. Gee, Atty Baker & Hostetler, LLP kgee@bakerlaw.com

Roy A. Krall, Esq., AEP® Cavitch, Familo, Durkin Co., LPA rkrall@cavitch.com

Raymond J. Casey, Atty Williams Allen Casey LPA ray@lifedesignlaw.com

Arthur E. Gibbs, III, Esq., AEP® Wickens Herzer Panza agibbs@wickenslaw.com; Dmonschein@wickenslaw.com

Frank C. Krasovec, Jr., Atty Hahn Loeser & Parks LLP fkrasovec@hahnlaw.com

James R. Chriszt Nicola, Gudbranson & Cooper, LLC jchriszt@nicola.com Jeffrey P. Consolo McDonald Hopkins, LLC jconsolo@mcdonaldhopkins.com

Ronald J. Gogul Gogul & Associates rgogul@aol.com James A. Goldsmith Ulmer & Berne LLP jgoldsmith@ulmer.com

Stephen L. Kadish, Atty Frantz Ward LLP skadish@frantzward.com

David M. Lenz, Atty Schneider Smeltz Spieth Bell LLP dlenz@sssb-law.com Janet L. Lowder, Esq., CELA, AEP® Hickman & Lowder Co., LPA jlowder@hickman-lowder.com

Susan S. Goldstein supasigo@gmail.com

Chad Makuch, Atty Baker & Hostetter LLP cmakuch@bakerlaw.com

M. Patricia Culler Hahn Loeser & Parks LLP mpculler@hahnlaw.com

Laura Joyce Gorretta, Atty Laura J. Gorretta LLC laura@gorrettalaw.com

Monique W. Marinakos, Atty PNC Bank, Wealth Management mwmarinakos@gmail.com

Dana Marie DeCapite, Atty Hahn Loeser & Parks LLP ddecapite@hahnlaw.com

Karen L. Greco, AEP® CM Wealth Advisors kgreco@cmwealthadvisors.com

Michael W. Matile, JD FNB Wealth Management matilem@fnb-corp.com

Steven Cox, JD Roetzel & Andress scox@ralaw.com

16 | ESTATE PLANNING COUNCIL OF CLEVELAND


estate planning council directory Dawn E. McFadden, Atty McFadden Bushnell LLC dmcfadden@mcfaddenbushnell.com

Maria E. Quinn, AEP® The O’Brien Law Firm LLC maria.quinn@obrienlaw.net

Laurie G. Steiner, Esq. Solomon, Steiner & Peck, Ltd. lsteiner@ssandplaw.com

Nelson J. Wittenmyer, Jr., Esq. The Cleveland Clinic Foundation wittenn@ccf.org

Daniel A. McGowan, Atty Law Offices of Daniel McGowan, LLC dan@mcgowanlawohio.com

Susan L. Racey Tucker Ellis LLP sracey@tuckerellis.com

Brenda L. Wolff, Atty Nicola, Gudbranson & Cooper LLC wolff@nicola.com

Erica E. McGregor Tucker Ellis LLP erica.mcgregor@tuckerellis.com

Melissa A. Register Register Law, LLC info@registerplanninglaw.com

E. Roger Stewart, Esq. McCarthy, Lebit, Crystal & Liffman Co., LPA ers@mccarthylebit.com

Daniel J. McGuire, Esq. Mansour Gavin LPA dmcguire@mggmlpa.com

Linda M. Rich Linda M. Rich, Attorney at Law lindamrich@sbcglobal.net

Jamie E. McHenry, Atty Schneider Smeltz Spieth Bell LLP jmchenry@sssb-law.com

R. Andrew Richner, Atty R. Andrew Richner Co., LPA 330-425-2291

Kevin R. McKinnis, JD BakerHostetler kmckinnis@bakerlaw.com

Michael G. Riley McDonald Hopkins, LLC mriley@mcdonaldhopkins.com

James C. McSherry, Atty McSherry & Co., LPA jmcsherry@mcsherrylaw.com

Lisa Roberts-Mamone, Atty, AEP® BakerHostetler lrobertsmamone@bakerlaw.com

Joseph M. Mentrek, Esq., AEP® Calfee, Halter & Griswold LLP jmentrek@calfee.com

Alan Rosca, Atty Goldman Scarlato & Penny PC rosca@lawgsp.com

Julie A. Taft, Atty Taft Stettinius & Hollister LLP Jtaft@taftlaw.com

Margaret M. Metzinger Frantz Ward LLP mmetzinger@frantzward.com

Lisa J. Roth, Atty Ziegler Metzger LLP lroth@zieglermetzger.com

Mark A. Trubiano Cavitch, Familo & Durkin mtrubiano@cavitch.com

Kenneth J. Sable, MBA, JD Sable Group, LLC ken@SableGroupLLC.com

Thomas M. Turner, Esq., CPA Turner Welo LLC Tom@TurnerWeloLaw.com

Patrick J. Saccogna, JD, LL.M., CPA (inactive), AEP® Thompson Hine, LLP patrick.saccogna@thompsonhine.com

Jaclyn L.M. Vary, Atty Calfee, Halter & Griswold LLP jvary@calfee.com

William M. Mills Singerman, Mills, Desberg & Kauntz Co., LPA wmills@smdklaw.com Ginger F. Mlakar, Esq., CPA, AEP® The Cleveland Foundation gmlakar@clevefdn.org; M. Elizabeth Monihan, AEP® Schneider Smeltz Spieth Bell LLP memonihan@sssb-law.com Joseph L. Motta, Esq. Joseph L. Motta Co., LPA joseph@josephlmotta.com Anthony J. Nuccio Anthony J. Nuccio, Attorney at Law ajnatty@aol.com Michael J. O’Brien The O’Brien Law Firm LLC michael.obrien@obrienlaw.net Bryan C. Palmer, Atty Solomon, Steiner & Peck, Ltd. bpalmer@ssandplaw.com Abbie R. Pappas, Atty Singerman, Mills, Desberg, Kauntz Co., LPA apappas@smdklaw.com Sebastian C. Pascu, JD Walter Haverfield spascu@walterhav.com Jennifer E. Peck, Atty Solomon, Steiner & Peck, Ltd. jpeck@ssandplaw.com Dominic V. Perry, Atty, CPA Perry & Karnatz, LLC dvperry@perrycounsel.com Rebecca Yingst Price, Esq. Law Offices of Rebecca Yingst Price, LLC price@ohiowills.net

Jennifer A. Savage, AEP® Schneider Smeltz Spieth Bell LLP jsavage@sssb-law.com Ronald S. Schickler, CPA, Esq. ron@schicklerlaw.net John S. Seich McCarthy, Lebit, Crystal & Liffman Co., LPA jss@mccarthylebit.com Roger L. Shumaker, Esq. McDonald Hopkins, LLC rshumaker@mcdonaldhopkins.com John M. Slivka Schneider Smeltz Spieth Bell LLP jslivka@sssb-law.com Michael L. Solomon Solomon, Steiner & Peck, Ltd. msolomon@ssandplaw.com

John E. Sullivan, III Sullivan & Sullivan Ltd. jesullivan3@sullivanandsullivan.com Linda DelaCourt Summers, Esq. Ulmer & Berne LLP lsummers@ulmer.com Joseph T. Svete, Atty Svete and McGree Co., LPA svete@smc-law.com Scott E. Swartz, JD, LL.M., AEP® Wellspring Financial Advisors, LLC sswartz@wellspringadvisorsllc.com David A. Szabo Dszabo55@gmail.com

Missia H. Vaselaney, AEP® Taft Stettunius & Hollister LLP mvaselaney@taftlaw.com Ronald F. Wayne, AEP® Buckingham, Doolittle LLC rwayne@bdblaw.com

Gary A. Zwick, JD, LLM, CPA, AEP® Walter & Haverfield, LLP gaz@walterhav.com

FINANCIAL ANALYSTS Stephen Baumgarten, CFA Morgan Stanley stephen.baumgarten@morganstanley.com Martin J. Burke, Jr., CFA Van Cleef Asset Management martyburkejr@vancleefinc.com Theodore T. Jones Triple T Corp TannerTripleT@gmail.com Paul J. Lehman, CFA, CFP® Newgrange Asset Management LLC pauljlehman@gmail.com Robert C. Moore, CFA Sun Trust Investment Services, Inc. robert.c.moore@suntrust.com

FINANCIAL PLANNING PROFESSIONALS Richard A. Ahrens, CFP®, AEP® Independence Wealth Advisors rich@iwadirect.com William Ambrogio Wellspring Financial Advisors, LLC bambrogio@wellspringadvisorsllc.com Ronald S. Ambrogio BNY Mellon Wealth Management ron.ambrogio@bnymellon.com

Michael L. Wear, JD, MBA, AEP® Buckingham, Doolittle & Burroughs, LLC mwear@bdblaw.com

Charles J. Avarello, CPA (inactive), CFP® Fairway Wealth Management LLC cja@fairwaywealth.com

Stephen D. Webster, JD Webster & Webster sdweblaw@aol.com

Michael R. Baker, CFP®, AEP® Sequoia Financial Group mbaker@sequoia-financial.com

David G. Weibel Frantz Ward LLP dweibel@frantzward.com

Molly Balunek, CFP®, AEP® Endeavor Wealth Advisors molly@endeavorwa.com

Jeffry L. Weiler jweiler@roadrunner.com

Lawrence C. Barrett, CLU®, ChFC®, AEP® Sagemark Consulting Private Wealth Service lawrence.barrett@lfg.com

Richard Weinberg, Esq. Winbridge Partners, LLC rweinberg@winbridge.co

James Spallino, Jr., Atty Thompson Hine LLP james.spallino@thompsonhine.com

Katherine E. Wensink, Atty McDonald Hopkins, LLC kwensink@mcdonaldhopkins.com

Richard T. Spotz, Jr. Ziegler Metzger LLP rspotz@zieglermetzger.com

Frederick N. Widen, Atty, CPA Ulmer & Berne LLP fwiden@ulmer.com

Justin L. Stark Schneider Smeltz Spieth Bell LLP jstark@sssb-law.com

Erica K. Williams, Esq., AEP® Wickens Herzer Panza ewilliams@wickenslaw.com

Kimberly Stein Schneider Smeltz Spieth Bell LLP kstein@sssb-law.com

Scott A. Williams Williams Allen Casey LPA scott@lifedesignlaw.com

Ronald E. Bates, CPA, CFP®, PFS St. Clair Advisors LLC reb@saintclairllc.com Edward J. Bell, JD, CPA, CFP® Gries Financial LLC ejb@gries.com Steven Berman, CFP® Wells Fargo Advisors steven.berman@wfadvisors.com Michelle M. Bizily, CPA, PFS, CFP®, AEP® Cornerstone Family Office, LLC mbizily@crnstn.com

ESTATE PLANNING COUNCIL OF CLEVELAND 17


estate planning council directory Daniel L. Bonder, JD, MBA, CFP® Beacon Financial Partners, LLC dbonder@beaconplanners.com

David Flegal, CPA, CFP® Clearstead Advisors dflegal@clearstead.com

Donald Laubacher, CPA, CFP®, AEP® Sequoia Financial Group LLC dlaubacher@sequoia-financial.com

Taylor Edward Papiernik, CFP® Sequoia Financial Group tpapiernik@sequoia-financial.com

David J. Bosak, CFP® Fairport Wealth david.bosak@fairportwealth.com

Frank F. Gagliardi Bernstein Private Wealth Management frank.gagliardi@bernstein.com

Maureen Leneghan, CPA, CFP® Clearstead Advisors mleneghan@clearstead.com

James B. Perrine, CFP® Key Private Bank james_perrine@keybank.com

Jeannine Brzezinski, CTFA The Glenmede Trust Company, NA jeannine.brzezinski@glenmede.com

William Gandert, CFP®, RICP® Sequoia Financial Group wgandert@sequoia-financial.com

Keith M. Lichtcsien, CFP®, AEP® Resource Strategies, Inc. 216-765-0121

Marla K. Petti, CPA/PFS, AEP® HW Financial Advisors pettim@hwfa.com

Eileen M. Burkhart, CFP® Eileen M. Burkhart & Co., LLC eileenb@eburkhart.com

David J. Garten, CFP® The Northern Trust Company djg6@ntrs.com

David C. Ligan, CFP® Fidelity Investments david.ligan@fmr.com

Joseph Radigan, CFP® Johnson Investment Counsel jradigan@johnsoninv.com

Carl Camillo, CLU®, ChFC®, CFP®, REBC®, AEP®, RHU®, AIF®, CPFA Vantage Financial Group carlc@vanfin.com

James E. Gaydosh, LUTCF, CFP®, RICP® Valued Capital Advisors jgaydosh@caioh.com

James Lineweaver, CFP® Lineweaver Wealth Advisors quarterback@lineweaver.net

Timothy L. Ramsier, CRPC Ramsier Financial Services, Inc. tim@ramsier.net

Jennifer Chess, CFP® PNC Wealth Management jennifer.chess@pnc.com

Thomas M. Genco, CFP®, CPA Beacon Financial Partners, LLC tgenco@peasecpa.com

Amanda Lisachenko, CFP® Reed Financial Services, Inc. Amanda@reed-financial.com

Theodore J. Robbins, CPA, CFP Clearstead trobbins@clearstead.com

Trevor R. Chuna, CFP®, AEP®, CTFA, MSFS Sequoia Financial Group LLC tchuna@sequoia-financial.com

David A. Grano, CRPC WealthPlan Partners david.grano@gowealthplan.com

Ted S. Lorenzen, ChFC® Cedar Brook Group TLorenzen@cedarbrookfinancial.com

Kenneth L. Rogat, CLU®, ChFC® Cedar Brook Financial Partners, LLC krogat@cedarbrookfinancial.com

Kathryn E. Madzsar, CFP® Wellspring Financial Advisors, LLC kmadzsar@wellspringadvisorsllc.com

David Rubis Fairport Wealth david.rubis@fairportwealth.com

David S. Maher, CFP® UBS Financial Services, Inc. david.maher@ubs.com

Alexander I. Rupert, CFP® Sequoia Financial Group arupert@sequoia-financial.com

Timothy Patrick Malloy, Atty, CAP®, AEP® Key Private Bank timothy_malloy@keybank.com

Connor James Sawyers PNC connor.sawyers@pnc.com

Mark A. Ciulla Capital Advisors, Ltd. mciulla@capitaladvisorsltd.com Calla Hoyt Cornett, CFP® Fairport Wealth Management callie.cornett@fairportwealth.com Greg S. Cowan, CPA, CFP®, AEP® AB Bernstein greg.cowan@bernstein.com Thomas H. Craft, CPA, AEP® Gateway Financial Advisors, LLC thomas.craft@gatewayadvisors-usa.com Lynnette Crenshaw, CWS Key Private Bank lynnette_crenshaw@keybank.com Kenneth D. Cunningham, CRPC, CPFA Merrill Lynch kenneth_cunningham@ml.com

Marianne Grega, EA, CFP® M+N Advisory Services, LLC m.grega@advsrv.com Elizabeth C. Griffiths, CFP® Gries Financial LLC liz@gries.com Amy M. Gyetko, CFP®, EA Magis, LLC amy@magisllc.com Sarah Hannibal, CPA, CFA Walden Wealth Partners, LLC sarah@Waldenwealth.com Dana G. Hastings, CFP®, ChFC® Fairport Wealth dana.hastings@fairportwealth.com Brent R. Horvath, CFP® Gries Financial Partners brent@gries.com Scott Huff River Wealth Management scott@riverwm.com

Richard S. Milligan The Northpointe Wealth Management Group richard.milligan@ubs.com Wayne D. Minich, CLU®, ChFC® Applied Financial Concepts, Inc. planning@appliedfin.com Kenneth R. Morgan, CFP®, CIMA, CTFA, AEP® Hawthorn kenneth.morgan@hawthorn.pnc.com

Bradley Schlang, CFP® Cedar Brook Financial Partners, LLC bschlang@cedarbrookfinancial.com Michele Schrock, CPA, CFP® Huntington Private Bank michele.schrock@huntington.com Dennis F. Schwartz The WealthCare Group of Raymond James & Associates, Inc. dennis.schwartz@raymondjames.com

Philip G. Moshier, CFP®, CRPC, AEP® North Coast Executive Consulting philip.moshier@lfg.com

Stanley E. Shearer, CLU®, ChFC®, CASL, CLTC, AEP® Northwestern Mutual stanley.shearer@nm.com; patti.l.hunt@ nm.com

Michael J. Moss, CFP® Clearstead mmoss@clearstead.com

Laura F. Sonderman, CFP® Morgan Stanley laura.f.sonderman@morganstanley.com

Sarah M. Dimling, MSBA AB Bernstein sarah.dimling@bernstein.com

Jonathan M. Kesselman, Atty, CFP® UBS Financial Services, Inc. jonathan.kesselman@ubs.com

Christine A. Myers, CFP®, CPA, AEP®, Mtax Key Private Bank tina_a_myers@keybank.com

Laura B. Springer, CRPC®, CFP® Sequoia Financial Group LLC lspringer@sequoia-financial.com

Nicholas P. DiSanto, MBA JP Morgan Chase Bank, N.A. nick.disanto@jpmorgan.com

W. Todd Kiick, CFP®, CRPC®, CPFA® Merrill Lynch w_kiick@ml.com

Michael T. Novak, CPA, PFS, AEP® Wellspring Financial Advisors, LLC mnovak@wellspringadvisorsllc.com

Beverly A. Stiegele, CFP®, CRPC®, APMA Ameriprise Financial Services, Inc. bstiegele@ampf.com

Mary Ann Doherty, CFP® Gries Financial LLC mad@gries.com

Beth M. Korth, CPA, CFP® Key Private Bank beth_m_korth@keybank.com

Linda M. Olejko, CFP® Glenmede linda.olejko@glenmede.com

Karin Maloney Stifler, CFP®, AIF Walden Wealth Partners LLC karin@waldenwealth.com

Emily A. Drake, CFP®, AEP® Fairport Wealth Management emily.drake@fairportwealth.com

Kristen Kuzma, CFP® Fairway Wealth Management LLC kak@fairwaywealth.com

Matthew S. Olver, CFP®, AEP®, CEPA Cerity Partners LLC molver@ceritypartners.com

Thomas B. Strauchon, CFP® Strauchon & Company tom@strauchonandco.com

Frank Fantozzi, CPA, MT, PFS, CDFA, AIF® frank@plannedfinancial.com

Ann-Marie K. La Porta Huntington Private Bank ann-marie.laporta@huntington.com

Richard M. Packer, CLU®, ChFC®, CFP LPL Financial richard.packer@lpl.com

Donna L. Thrane, CPA, PFS, AEP® RSM US Wealth Management LLC donna.thrane@rsmus.com

Tia Marie D’Aveta, FPQP™ Fairport Wealth tia.daveta@fairportwealth.com Elizabeth F. De Nitto, EA, CFP® Paragon Advisors lizdenitto@gmail.com Carina S. Diamond, CFP®, AIF Dakota Wealth Management cdiamond@dakotawm.com

Dean Andrew Hunt, CFP® PNC Bank, N.A. dean.hunt@pnc.com Douglas Ingold, CLU®, ChFC® Ramsier Financial Services, Inc. doug@ramsier.net

18 | ESTATE PLANNING COUNCIL OF CLEVELAND


estate planning council directory Brian M. Tullio, Atty Fairway Wealth Management btullio@fairwaywealth.com

Mario Mastroianni Oswald Companies Mmastroianni@OswaldCompanies.com

Sarah E. McIntosh KIKO - Realtors, Auctioneers, Advisors smcintosh@kikocompany.com

Christopher J. Geiss, TO Western Reserve Trust Company cjgeiss@westernreservetrustcompany.com

Robert A. Valente, CFP®, AEP® Robert Valente Consulting robertvalente@roadrunner.com

Ervis Mellani, CLU® Ownership Advisors, Inc. emellani@ownershipadvisors.com

Katherine E. Collin Moore, Esq. Schneider Smeltz Spieth Bell LLP kmoore@sssb-law.com

Thomas C. Gilchrist PNC Wealth Management thomas.gilchrist@pnc.com

Amy Valentine, CFA® Planned Financial Services amy.valentine@lpl.com

Hoyt C. Murray, CLU®, ChFC® H.C. Murray Corporation hoyt@hcmurray.com

Susan C. Murphy, CSA® The Private Trust Company susanmurphy0925@gmail.com

Caroline Gluek, CFP®, AEP® Northern Trust Company cg36@ntrs.com

Bill Venter, CFP®, CFS®, CIMA®, AIFA® Sequoia Financial Group bventer@sequoia-financial.com

Raymond C. Nash Heirmark rnash@heirmark.com

Eric A. Nye, CFP®, CLU®, ChFC® Nye Financial Group rick@nye.net

Lawrence H. Hatch Glenmede lawrence.hatch@glenmede.com

Larry Rothstein, CLU®, AEP® Heirmark lrothstein@heirmark.com

Katharine O’Connell North Coast Genealogy koc@northcoastgen.com

Janet W. Havener, MBA JWH Wealth Planning, LLC jwhwealthplanning@gmail.com

Richard Tanner, CLU®, AEP® Ownership Advisors, Inc. rtanner@ownershipadvisors.com

William A. Payne, Esq. iGift Fund williampayne@igiftfund.org

Joanne Hindel, AEP® Fifth Third Bank joanne.hindel@53.com

Kurt M. Thomas, CLU®, CFP®, MSFS J.L. Thomas & Co., Inc. kurt@jlthomasco.com

Carrie Pinney Hindman Auctions carriepinney@hindmanauctions.com

Paula Jagelewski The Private Trust Company paula.jagelewski@lpl.com

Uma M. Rajeshwar, CFA, CTFA, CFP®, AEP® Glenmede uma.rajeshwar@glenmede.com

William E. Karnatz, Jr., Esq. Perry & Karnatz, LLC bkarnatz@perrycounsel.com

Catherine Veres, CPA Cornerstone Family Office, LLC cveres@crnstn.com Neil R. Waxman, CFP®, AEP® Capital Advisors, Ltd. nwaxman@capitaladvisorsltd.com Heather L. Welsh, CFP®, MSFS, AEP® Sequoia Financial Group hwelsh@sequoia-financial.com Alan E. Yanowitz, JD Beacon Financial Partners ayanowitz@beaconplanners.com James D. Yurman James D. Yurman & Assoc., Inc. jdy@physiciansfinancialadvisors.com David M. Zolt, CFP®, EA Westlake Advisors david@westlakeadv.com

OTHER PROFESSIONALS Alexandra G. Beach, Esq. University Hospitals alexandra.beach@uhhospitals.org Deborah P. Cugel, CFA Glenmede Trust Company deborah.cugel@glenmede.com

INSURANCE PROFESSIONALS

Todd M. Everson, MBA Buckeye Life Resources, LLC teverson@buckeyelr.com

Peter Balunek, CFP®, CLU®, ChFC® Falls Advisory Group 440-561-0727

Patricia L. Fries, Esq., MBA University Hospitals patricia.fries@uhhospitals.org

Barbara J. Cottrell New York Life Insurance Company bjcottrell@ft.newyorklife.com

William Geraci, CVA, CM&AA Resourceful Consulting Services, LLC wgeraci@rcscle.com

David S. Dickenson, II, CLU®, ChFC® Dickenson & Associates LLC david@dickensoninsurance.com

Marie L. Gustavsson-Monago, JD, LL.M. Cleveland Institute of Art mlmonago@cia.edu

Howard B. Edelstein, CLU®, AEP® Edelstein Financial / Northwestern Mutual hbe@edelsteinfinancial.com

Patrick A. Hammer, MSFS, AEP® HFS Wealth Advisors phammer@hfswa.com

Elaine B. Eisner, Atty Eisner Gohn Group Elaine@eisnergohngroup.com Scott A. Gohn, CLTC Eisner Gohn Group sgohn@eisnergohngroup.com Lawrence I. Gould, CLU® Lawrence I. Gould & Associates ligould@ft.newyorklife.com

Matthew A. Kaliff, JD Jewish Federation of Cleveland mkaliff@jcfcleve.org Karen J. Kannenberg, CFRE Cleveland Metroparks kjk@clevelandmetroparks.com Marta L. Kelleher, Esq., AEP® University Hospitals marta.kelleher@uhhospitals.org

James O. Judd DJudd Consulting Dell@djuddconsulting.com

Lisa K. Lowy L&L Estate Liquidation & Appraisal Services, LLC lisa@llestateliquidation.com

Lori L. Kaplan, CLU®, ChFC®, RICP® Eagle Strategies, LLC llkaplan@ft.newyorklife.com Gary E. Lanzen, CLU®, ChFC®, RHU® The Brooks and Stafford Company glanzen@brooks-stafford.com

Radd L. Riebe, AEP®, JD, ASA Stout rriebe@stout.com Bridget M. Ritossa Careplan Geriatric Care Managers bridget@careplangcm.com Jennifer B. Schwarz, Atty Jewish Federation of Cleveland jschwarz@jcfcleve.org Jeffrey Shoykhet, MAI, CCIM Alpha Appraisal Group, LLC jeff@alphaappraisalgroup.com Saul Stephens Meaden & Moore sstephens@meadenmoore.com David J. Stokley, JD The Cleveland Foundation dstokley@clevefdn.org Diane M. Strachan, CFRE Cleveland Museum of Art dstrachan@clevelandart.org Julie A. Weagraff, MNO, CFRE Girl Scouts of North East Ohio jweagraff@gsneo.org Elizabeth Wettach-Ganocy Leave A Legacy, Summit, Portage, Medina ehganocy@windstream.net Carol F. Wolf, CFRE Jewish Federation of Cleveland cwolf@jcfcleve.org

Lindsay J. Keith, CTFA Johnson Trust Company lkeith@johnsoninv.com Amy R. Lorius, CFP® CM Wealth Advisors alorius@roadrunner.com Karen T. Manning, JD, CTFA BNY Mellon Wealth Management karen.manning@bnymellon.com Catherine A. Mekker, CTFA Glenmede catherine.mekker@glenmede.com Jodi Marie Nead, TO Key Private Bank jodi_m_nead@keybank.com Michael H. Novak Northern Trust Company mhn4@ntrs.com Leslie A. O’Malley, CTFA Oxford Harriman & Company leslie@oxfordharriman.com Trent Schulz The Northern Trust Company ts304@ntrs.com June A. Seech, CTFA, AEP® trustjune@earthlink.net Thomas E. Stuckart, JD Fifth Third Private Bank thomas.stuckart@53.com

TRUST OFFICERS

Diann Vajskop Fifth Third Private Bank diann.vajskop@53.com

Sandra C. Lucas The Cleveland Foundation slucas@clevefdn.org

William G. Caster Fifth Third Private Bank william.caster@53.com

Amy Vegh BNY Mellon Wealth Management amy.vegh@bnymellon.com

Michelle Mancini American Cancer Society michelle.mancini@cancer.org

William Davis, JD Key Family Wealth william_t_davis@keybank.com

Aileen P. Werklund CM Wealth Advisors LLC awerklund@cmwealthadvisors.com

ESTATE PLANNING COUNCIL OF CLEVELAND 19


retirement and business succession planning BUCKINGHAM, DOOLITTLE & BURROUGHS, LLC

Are You Ready to Transition Your Business? By Michael L. Wear Are you ready to transition your business? Have you considered whether you want to sell it to your employees? To a strategic buyer in your industry? Or do you have a family member who is ready to take the reins and lead the business into the future? Assemble your team of advisors. You will want an attorney with mergers and acquisition experience and an estate planning attorney. Add an accountant familiar with your industry and experienced in business and personal taxes, and a business valuation ex-

pert. You will also need a financial advisor who will take a holistic view of your situation, before and after the transition. Consider adding an insurance specialist. This team will help determine the value of your business, deal structure, potential tax consequences, and how to manage your assets after completing the transition. Another advisor to consider adding to the team is a business psychologist to help you and your family deal with the important intrafamily emotional issues relating to the transition of the business, regardless of whether you sell the business or transition it to a family member. The psychologist can guide the family through these issues and make it possible for your

family to enjoy Thanksgiving dinners in the future. Define your goals and objectives. What do you want from the business? Do you want the option to continue working after the transition to a new owner? Do you need cashflow for your retirement? Do you have charitable goals? It is important to determine what matters most to you based on your unique situation. Use your team of advisors to refine your desires into concrete goals and objectives that will help focus your options for transitioning your business. Weigh your options. In this step, your team of advisors will provide alternatives to meet your specific goals and objectives.

Your team will give you the pros and cons of each option, including potential tax consequences, relative to your specific goals and objectives. Your team can give you the alternatives, but you will decide the fate of your business. Move forward with confidence. Once you have decided on how you want to transition the business, move forward with confidence that you and your team have laid out a successful strategy to make it happen. Are you ready? Michael L. Wear, AEP®, is a Trusts & Estates partner at Buckingham, Doolittle & Burroughs, LLC. Contact Mike at 330.258.6424 or mwear@bdblaw.com

estate and trust administration HINDMAN AUCTIONS

HW&CO.

Evaluation and disposition of tangible personal property

Considerations in trust funding

By Carrie Pinney A vital part of any estate plan is arranging for the distribution of personal property; the items we surround ourselves with that tell the story of our lives. While many of these items hold sentimental value, others hold monetary value. But how do you differentiate between the two? There are two main avenues to consider when determining the value of your property. If a value is needed for estate tax, insurance or donation tax purposes, a formal appraisal is required. A qualified appraiser will prepare IRS and Uniform Standards of Professional Appraisal Practice (USPAP) compliant reports. If you are merely curious about what something is worth were you to sell it today, a formal appraisal is not necessary. To obtain this fair market value, you should consult someone who specializes in the sale of the type of item, such as a dealer, auction house or knowledgeable collector. Seeking out multiple opinions on the value of your property can help you to understand a realistic market value. When handling the disposition of personal property from an estate, the appropriate

outlet will depend on the type of property. General household goods and contemporary furnishings may be best served by selling through an estate sale. Consigning property to a consignment shop will allow you to remove items from the premises, and you will realize a profit upon the sale of the property. Auction is a popular outlet, particularly when the property involved is collectible. Auction houses work with collectors, fiduciaries, and families to discuss the appraisal of estates, collections or single items and subsequent sale to an international client base. Any reputable auction house will be able to provide you with a complimentary evaluation and suggest the best avenue for disposition of your property. When researching auction houses, consider the firm’s reputation for customer service and the material they frequently handle. What collecting categories does that firm handle? How do the sold prices compare to the auction estimates? How many items do not sell? How are items described and illustrated? There’s nothing better than having a direct conversation with a representative from the firm to make sure that their goals align with yours. Carrie Pinney is a Business Development Manager, Cleveland. cleveland@hindmanauctions.com.

If you are merely curious about what something is worth were you to sell it today, a formal appraisal is not necessary.

20 | ESTATE PLANNING COUNCIL OF CLEVELAND

By Mary Eileen Vitale, CPA, CFP®, AEP®, Principal, HW&Co. A trust is a common estate-planning tool, used to manage and control the distribution of your assets in the event of your death or incapacity. However, a trust can be completely ineffective if not properly funded. Many people incorrectly assume that trust funding is complete once they have signed the trust document; however, executing the trust document is only the beginning. For a trust to function, the trustee must hold title to the assets owned by and, therefore, subject to trust provisions; consequently, each asset to be owned by the trust must be retitled to reflect trust ownership. Failure to transfer assets to the trust defeats its management purpose and, in the future, could expose trust assets to the unnecessary time and expenses associated with probate. What Types of Assets Can Be Owned by a Trust? A trust can own several different types of property, including: • Cash and liquid securities: checking accounts, savings accounts, certificates of deposit, and money market accounts • Non-retirement brokerage and mutual fund accounts • Physical stock and bond certificates Personal property, such as jewelry, furniture, art, etc. • Nonqualified annuities • Life insurance contracts • Real estate • Business interests

• Notes and other debt instruments How Do You Transfer Ownership of Property to a Trust? For most assets, transferring ownership is relatively simple: • Bank and brokerage accounts typically require completion of new account paperwork in the name of the trust, along with signed authorization to transfer assets from the current account to the trust. • Physical stock and bond certificates require a change of ownership to be completed with the stock transfer agent or bond issuer. • Life insurance and annuity contracts also typically require submission of a change of ownership form to the contract issuer. Some assets require more effort to properly change title: • Personal property without a legal certificate of title is commonly listed on a schedule accompanying the trust to reflect that the trust owns those assets. • Assets with certificates of legal title require the owner to quitclaim ownership interest in the asset to the trust. Other Considerations: To avoid unintended consequences, it is very important to fund the trust in a timely manner. It’s also important to work with your advisor when determining which property the trust should own. There are several variations of trusts, and each trust may have a specific role in the estate plan and require specific assets to fund it. Mary Eileen Vitale, CPA, CFP®, AEP® is a principal in HW&Co.’s Tax Services Group and is a frequent speaker on estate planning, financial planning and other various tax topics.


insurance/risk management OSWALD COMPANIES

Long-Term Care: Know Your Options By Mario Mastroianni Given current tax laws, we find that fewer families are concerned about paying a large estate tax upon death. Because of this, the planning focus has shifted from estate tax planning to estate preservation. The cost of long-term care is skyrocketing, and with people living longer, the cost of care can be a drain on family wealth and a burden on adult children. A private room in a nursing home facility is projected to cost more than $160,000 per year in 20 years, which has many individuals in their 50s and 60s very concerned. The traditional Long-Term Care (LTC) In-

surance policies that were available in the 1990s and 2000s did not have guaranteed premiums. Most people who bought these policies have seen premium increases of over 100%, which is why most insurance carriers have exited the long-term care market all together. For those who are considering the purchase of LTC Insurance there are a few things to know. First, if you are considering a traditional LTC policy, be aware, premiums are not guaranteed and like their predecessor’s premiums can increase. Also, there is no return of premium or death benefit option. So, if you do not use the LTC benefit premiums spent will be lost. The second thing to know is that there are alternatives to traditional Long-Term Care

Insurance that offer rates guaranteed to never increase. One is Life Insurance with an LTC Rider. These are permanent Life Insurance policies that allow the insured to take an advance of the death benefit to pay for qualified Long-Term Care expenses. If the LTC benefit is not used the death benefit remains intact and is paid to the insured’s heirs. Another alternative acts more like an annuity in that a lump sum is placed with an insurance carrier, in return the insured has a cash balance, a long-term care benefit and a death benefit that pays if the long-term care benefit is never used. Many individuals who currently own cash value life insurance have found that by reposi-

tioning their cash value into one of these hybrid products better fits their current planning objectives. They offer the flexibility to be used during life and efficiently transfer an asset to the insured’s heirs in the event LTC is never needed. Mario Mastroianni is a Sales Executive with Oswald Companies. He specializes in building and managing significant Life Insurance and High Limit Disability Income Insurance Portfolios for his clients. His other areas of expertise include Policy Audit Services, Charitable Giving/Planning Services, Key Executive Retention Plans, Buy/Sell Funding Policies (Life and Disability), Business Overhead Expense Protection Insurance, Long Term Care Insurance and Life Settlements.

ESTATE PLANNING COUNCIL OF CLEVELAND 21


insurance/risk management UNIVERSITY HOSPITALS

Life insurance as a creative gift option By Alexandra Beach Philanthropy is personal. Each donor is motivated by individual reasons for supporting a charitable organization. We work with each donor or advisor to understand individual circumstances and find the best way to structure each gift. Life insurance may be used to creatively achieve a donor’s philanthropic and financial goals. Depending on the donor’s age and health, life insurance can be an excellent and cost-effective way to provide future support for a charity. Current support may be provided through other means. Popular ways to make life insurance gifts: • Name a charity as the beneficiary of the

Gift Options

Immediate Tax Deduction

Ongoing Tax Deductions

Estate Tax Deduction

Name charity as beneficiary of the policy

Donor remains owner of policy. Income tax deduction is not applicable.

No ongoing income tax deductions since Donor remains owner of policy and pays insurance premiums to insurance company.

Life insurance is included as part of estate assets. Estate tax deduction for amount transferred to charity.

Transfer ownership of existing policy to charity

Income tax deduction equal to: lesser of net premiums paid or policy’s fair market value.

Paid-up Policy: No premium payments required.

Life insurance is not included as part of estate assets.

Partially Paid-up Policy: If additional premiums are required, Donor receives income tax deductions for contributions to charity.

Deductions during life (estate tax deduction not applicable).

Buy a new policy and transfer ownership to charity

Income tax deduction equal to: lesser of net premiums paid or policy’s fair market value.

Donor receives ongoing income tax deductions for contributions to charity covering premium payments.

Life insurance is not included as part of estate assets. Deductions during life (estate tax deduction not applicable).

policy. Simply submit a change of beneficiary form to the insurance company. • Transfer ownership of existing policy to charity. May be partially or fully paid-up. Simply submit change of ownership and beneficiary forms to the insurance company.

• Buy a new policy and transfer ownership to charity. This method would require you to make annual gifts to charity to pay the premiums. These annual gifts are, of course, tax deductible. The above chart summarizes life insurance

gift options and tax advantages. Alexandra Beach is Senior Gift Planning Officer at University Hospitals. Contact her at 216-844-0432.

November Currents | Charitable Giving | Call 440.247.5335 22 | ESTATE PLANNING COUNCIL OF CLEVELAND


ESTATE PLANNING COUNCIL OF CLEVELAND 23


charitable planning GIRL SCOUTS OF NORTH EAST OHIO

Creating and Implementing Charitable Giving Plans By Julie Weagraff What is a Charitable Giving Plan? It’s a plan that ensures that you can provide the kind of charitable support that meets your philanthropic goals. To start, you need to answer the following questions to determine your motive for giving: who do I want to support, why am I supporting them, and how can I best achieve my goals? Thinking through these questions will help you to create a plan enabling you to make the kind of impact you would like to see.

Who: Take an inventory of the causes and organizations that you currently support. Make a list and prioritize each worthy cause based on your relationship with them. Are you a board member, do you serve on a committee, or volunteer in some other capacity? What is your connection to and relationship with each charitable organization? Now dig a little deeper, are there any other organizations that have special meaning to you or your family? Where do you want to make a difference – what is your passion and how can you help fulfill that passion with your giving? Once you have your list made, it’s time to move on to the next step, identifying why

those organizations are important to you. Why: What about these charitable organizations is most meaningful to you? Has your whole family been impacted by the organization? Was the experience long lasting? Did the organization help you or a family member in a time of crisis? What is the impact you would like to have on the organization? Would you like to make smaller commitments to a larger list of organizations or make larger commitments to a smaller group? Answering these questions will help you assess and prioritize your giving. Talk with your loved ones about the causes you care about and the impact you would like to make. Ask-

ing their feedback can help you with the decision-making process. How: Before you decide how much you want to give to each organization, you will want to take a look at the possible vehicles or ways of giving to determine which ones are best for you. Be sure to meet with your advisors to determine the best vehicles for realizing your philanthropic goals and ensuring that your legacy will have the impact you want to achieve. Julie Weagraff, MNO, CFRE, is the Vice President of Fund Development for Girl Scouts of North East Ohio.

JEWISH FEDERATION OF CLEVELAND

Donor Advised Funds: Simplify your giving By Matthew A. Kaliff, JD Donor Advised Funds (DAF) are an increasingly popular option for individuals and families to support their favorite charities; there are more than 700,000 active DAF accounts in the U.S., sponsored by hundreds of local and national charitable organizations. In our rapidly changing economic environment, a DAF can simplify your charitable giving and may lead to tax savings. A DAF is easy to set up and use. You can create an account with a contribution of cash,

Currents

securities, or other assets. You retain the privilege to recommend charitable grants from the DAF over time. The institution hosting the DAF verifies the eligibility of grant recipients, processes grant checks, tracks distributions, and provides you with statements for the DAF account. Many sponsor institutions have online access so you can recommend grants and review account activity 24/7. A DAF offers potential tax savings and convenience regardless of whether you itemize deductions. A donation to a DAF qualifies as a charitable contribution for the year in which it is made. You receive a single receipt for tax purposes for each contribution to the DAF. This makes it unnecessary to

Publishing Nov. 19, 2020

Charitable Giving With November often serving as the advent of the season of giving, Currents annually presents a special section devoted to nonprofits in need of donations and dollars, as well as various avenues of planned giving (trusts, donor advised funds, charitable gift annuities and IRA rollovers, etc). Nonprofits, financial and tax advisors, estate planners, and more advertise in Currents’ November and December issues when readers are focused on philanthropy and giving throughout the holiday season.

Call 440.247.5335

to secure your advertising space 24 | ESTATE PLANNING COUNCIL OF CLEVELAND

chase down receipts from multiple charities. Also, by donating appreciated stock owned for more than one year, you pay no tax on the accumulated capital gains. The assets of the DAF are invested by the sponsor and any income they earn is not taxable. Finally, with standard deductions at high levels, a DAF enables a donor to “bundle” two or more years of giving in order to exceed the standard deduction in that tax year. For the next year or more, the donor may choose to take the standard deduction until he or she “bundles” donations again. Additionally, a DAF can facilitate testamentary planning. With most DAF programs the donor may provide instructions for dis-

tributing DAF assets upon death. Some DAF programs offer the option to name successors for the fund, allowing your family’s next generation to continue your legacy of philanthropy. Donor Advised Funds offer a simple, efficient, and tax-wise mechanism to fulfill your charitable goals. Discuss your options with your own financial advisors. Matthew A. Kaliff is Assistant Managing Director, Endowment Development, at the Jewish Federation of Cleveland. The foregoing is for educational purposes and is not tax or legal advice. Consult a tax, financial, or legal advisor about your situation.


charitable planning PEASE & ASSOCIATES, LLC

Retirement Accounts: The ideal charitable gift By Charles E. Federanich, CPA, MT, AEP® Pease & Associates, LLC For as hard as we work to save for our retirement, those fortunate enough to accumulate more assets than they need often find that their retirement accounts are not very tax-efficient. Workers diligently defer wages into their 401(k) plans and IRA’s, thinking they are saving taxes at their highest marginal rates, enjoying tax-deferred growth, and expecting they will be in a lower tax bracket in retirement. Once they reach a certain age (now 72), they have to begin required minimum distributions (RMD’s) from their taxable retirement accounts. They might discover that in conjunction with Social Security and other income, the RMD’s are taxed at just as high of a tax rate as they paid in their working years. The prospect of potential income tax rate increases may also lead them to wonder if this form of savings was worth it. Another concern is that retirement assets in an estate are income in respect of a decedent (IRD). IRD can be subject to both income tax and estate tax upon death of the

account holder. This treatment differs from capital gain assets, such as stocks and real property, that have their cost basis adjusted to fair market value upon the owner’s death. Such assets can pass free of income tax to their heirs. Until recently, those leaving retirement assets to their heirs knew that the beneficiaries could stretch the RMD’s over their own life expectancies, which could be several decades. The passage of the SECURE Act last December changed that for the worse. Most beneficiaries other than surviving spouses now have to withdraw the full balance from the inherited account within ten years. Beneficiaries, while grateful, may have a much larger income tax burden than the decedent would have wanted. Charitably inclined people have even more reason today to consider including their favorite nonprofits among the beneficiaries of their retirement accounts. Retirement assets left to charity pass income tax-free to the estate and its beneficiaries. Charities also are not taxed upon receipt of retirement assets. Parents can leave more tax-efficient assets to their children. The benefits of donating retirement assets to charity are not limited to those who will have taxable estates or that name a charity as an account beneficiary. Care-

ful planners and savers who believe in the concept of “enough” are often frustrated at having to take RMD’s and pay tax on them when they have other assets to cover their needs. In addition, after the tax law changes in late 2017, only about 10% of taxpayers can itemize their deductions. Donations by non-itemizers generally do not reduce their taxes. The ability to make qualified charitable distributions (QCD’s) directly to charities from their retirement accounts is doubly appealing. Individuals 70 ½ or older may use QCD’s to donate up to $100,000 per year to charities without the distributions being reportable as income. This gives them a tax benefit from contributions they would not have received otherwise. The income exclusion allowed when making QCD’s may reduce the taxable amount of their Social Security benefits. They also get the satisfaction of seeing how their efforts help their best-loved organizations, instead of making their most significant donations out of their estate. Charitable donors often wisely gift appreciated long-term investments to charity. The unrealized appreciation goes to the charity without being taxed to the donor. While this is an excellent planning strategy, long-term capital gains are often taxed at much lower rates than ordinary income, such as retire-

ment distributions. These capital gains can even be tax-free in limited circumstances. Use of QCD’s can provide larger income tax savings than donations of appreciated assets, whether the taxpayer itemizes deductions or not. When long-term appreciated assets are given to charity, the donor does not receive a tax benefit from the cost basis of the investment. If a stock is worth $50,000, the tax deduction is $50,000, whether their cost basis was $40,000 or $10. Advisors will encourage donors to gift investments with the largest amount of appreciation, to minimize the cost basis that goes to waste. For taxpayers eligible to make QCD’s, even those that want the cash flow from the RMD may be better off to sell capital gain assets with lower appreciation and instead use the QCD to fund their charitable contributions. We in Northeast Ohio are very blessed to have many outstanding charitable institutions that enrich our lives and support our communities. Careful planning allows us to utilize retirement assets to assist those organizations in their charitable missions while preserving other assets for our loved ones. Chuck Federanich, CPA, MT, AEP serves as a Partner in the Tax Advisory Services practice at Pease, CPAs.

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charitable planning HOSPICE OF THE WESTERN RESERVE

Pass down a legacy of giving One of the greatest gifts we can pass down to the next generation is to instill the value of giving back. Showing loved ones that we are part of a larger world—and that what we put into it is what we get out—ensures the next generation understands the importance of philanthropy. By talking with family members now about your philanthropic goals and engaging in acts of service, you inspire others to follow your lead.

Start the Conversation

Take the Next Step

• Set aside time or use everyday moments to talk about what it means to be charitable. • Share your vision and goals for organizations you are passionate about and request that your family consider their role in your giving plans. • Ask family members which causes are important to them and how they can show support.

• Discuss taking your commitment to the next level. • Consider volunteer opportunities with organizations, like Hospice of the Western Reserve, that your family would like to support. • Start charitable family traditions.

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Solidify Your Plans • Discuss and plan out your philanthropic

aspirations. • Leverage your estate plan to carry out your charitable wishes beyond your lifetime.

We Can Help Whether you make a current gift, a gift through your estate, or other planned gift, your support will ensure that others receive the best possible end-of-life care. To make a gift online go to hospicewr.org/eva or contact Holly Selvaggi at 216.255.9066.


Lawyers with one mission: to advance yours. Trusted family advisors deliver confidential counsel and peace of mind. Taftlaw.com

ESTATE PLANNING COUNCIL OF CLEVELAND 27


charitable planning KEY BANK

“HEETing” Up Your Estate Plan By Timothy Malloy, Director, Key Family Wealth Consulting Beth Miller, Director, Key Family Wealth Fiduciary Advisors While many high-networth individuals and their advisors have at least a passing familiarity with charitable remainder trusts and charitable lead trusts, the health and educational expense trust (HEET) is a hidden treasure. This type of estate planning vehicle masterfully combines philanthropy with income and transfer tax efficiency while aligning heirs with the values that are behind their inheritances. Many affluent families are familiar with the annual gift tax exclusion of $15,000 per recipient. A few paragraphs below the definition of the annual exclusion limit of IRC Section 2503 in the tax code is another gift tax exception — albeit an underutilized one — for qualified transfers for educational or medical expenses. These qualified educational and medical expenses are at the core of HEETs. And since another section of the tax code exempts these transfers from the generation-skipping transfer (GST) tax as well, HEETs double down on their tax advantages.

First, it’s important to appreciate the wide variety of HEET expenses that are exempt from hefty transfer taxes. Tuition paid directly to an educational organization that maintains a regular faculty and curriculum with a regularly enrolled student body qualifies. That could mean pre-K through post-graduate schooling along with many non-traditional educational institutions. Additionally, direct payments to the providers of medical care qualify as transfers exempt from gift tax. Payments for prescription drugs, physician and hospital visits, medical insurance premiums, and even long-term care insurance qualify for income tax deductions and do not count as either taxable gifts or taxable generation-skipping transfers. It’s important to note that these payments must be made directly to the educational or medical care provider; they cannot be made as reimbursements to the beneficiary. The first advantage of a HEET, therefore, is the ability to leverage the annual gift tax exclusion. HEETs can also be used to curb a beneficiary’s potentially frivolous and/or imprudent expenditures and ensure trust distributions are for essential needs. The trust’s commitment to paying for health care and education is tantamount to a solid investment in the earning power of its beneficiaries. Where do charities come into play in a HEET? Why does a settlor need a trust like this? Can’t the settlor simply pay these expenses directly to the medical/educational

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provider and forgo a trust? The HEET’s charitable features help answer the last two questions. Heads of households pass away, and trusts like HEETs can carry on their intentions beyond the grave. Trust beneficiaries also pass away: Uncle Sam likes to impose another transfer tax — the GST tax — on trusts when the last of the settlor’s children pass away. Grandchildren (skip persons) become the only trust beneficiaries. Now introduce HEETs. The presence of a charity as a trust beneficiary with a substantial present economic interest inoculates the trust against this second transfer tax — the GST tax — from occurring at every subsequent generational turn. Charities are nonskip parties: They have a perpetual life and don’t belong to one generation or the next. Although a “substantial present economic interest” is not clearly defined, most attorneys and practitioners seem to agree that a 5% or greater annual unitrust payout to charity is sufficient to satisfy this requirement. A HEET can be used to enhance the income tax efficiency of the trust and the benefits for its charitable beneficiaries. For gifts to their family private foundations, individuals may face annual charitable income tax deduction limitations of either 20% or 30% of their adjusted gross income. If drafted properly, a HEET can deduct 100% of its charitable contributions against trust income. It certainly behooves a family to conduct its philanthropy

through the 5%+ HEET unitrust payment to a family-controlled charitable vehicle such as a donor-advised fund or a family foundation. Who can benefit most from HEETs? With the large gift, estate, and GST exemptions poised to sunset in 2025 (perhaps sooner if there is a political change in DC), the number of highnet-worth families seeking to leverage their gift tax exclusions and GST exemptions may soon increase significantly. Also, affluent households that establish zeroed-out GRATs (grantor retained annuity trusts) and CLATs (charitable lead annuity trusts) to remove asset appreciation from their taxable estates are familiar with the difficulties and GST tax hurdles present in passing wealth to third-generation family members. Think about the attractiveness of these GRATs and CLATs that upon termination, pour over to HEET to resolve its GST conundrum. The HEET, in turn, pays a healthy percentage of trust income to a family-controlled charitable vehicle, provides for long-term care insurance premiums for settlor’s children, and is wellpositioned from a (transfer) tax perspective to pay the (wide variety of) qualified medical and educational expenses for every generations to follow. Don’t miss the HEET wave. Key Private Bank is part of KeyBank National Association. This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice.


ideas ideals impact For results that resonate, change the equation. Partner with Glenmede, an independent, privately owned trust company offering investment and wealth management services. Founded in 1956 by the Pew family to manage their charitable assets, we provide customized solutions for individuals, families, endowments and foundations. To learn how our culture of innovation and experienced thinking can help you make your unique imprint on the future, contact Linda M. Olejko at 216-514-7876 or Linda.Olejko@glenmede.com.

@glenmede /company/glenmede Glenmede’s services are best suited to those with $5 million or more to invest.

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legislative updates ENDEAVOR WEALTH ADVISORS

Tax Planning for Inherited IRA Accounts By Molly Balunek The passage of the SECURE Act in late 2019 affects the ability of nonspouse beneficiaries to stretch out distributions from Inherited IRAs and Inherited Roth IRAs over their lifetimes. Beginning with decedents who die in 2020, nonspouse beneficiaries must withdraw the entire balance of these IRAs within ten years and annual minimum distributions are no longer required. While rules for spouses and those decedents who died on or before 12/31/2019 remain unchanged, the CARES Act waives RMDs for 2020. Beneficiaries should consider how the timing of their

withdrawals impacts their taxes before taking distributions to optimize their inheritance. Distributions from an Inherited IRA are subject to income tax in the year(s) of distribution, whereas Inherited Roth distributions are tax-free. Beneficiaries with long-term goals may consider investing their inheritance in the Roth IRA until the tenth year, then withdrawing the full amount in a tax-free lump sum and reinvesting it in a taxable investment account. If the entire balance of the Inherited IRA is distributed in any one year, the beneficiary may be pushed into a higher tax bracket for that year, causing income over the threshold amount to be taxed at a higher rate. If the entire portfolio is distributed at the end of ten years,

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they may be faced with a similar tax situation to taking it all out in the first year. During the ten-year period, the account can be invested in a diversified portfolio of equities and fixed income, with a reasonable probability of taxdeferred appreciation. Waiting can expose the beneficiary to a variety of risks, including changes in tax policy, changes in income, and systematic investment risk. A beneficiary may consider spacing out distributions over the ten-year period to benefit from tax-deferred appreciation while also managing taxes. If the beneficiary retires during those years, waiting to take distributions until then may lower the overall tax bill. Another method is to use taxable distributions to “fill up” the

marginal tax bracket each year, but avoid moving into the next, higher bracket. These methods can also address changes in tax policy, income, or investment conditions as they occur. Under the SECURE Act, the timing of when a beneficiary takes taxable distributions from an IRA is an important consideration. Developing a tax projection with their financial planner and/or accountant can assess future income and deductions year by year as well as estimate related tax costs over the ten-year period to determine the best withdrawal approach. Molly Balunek, Kara Downing and Matt Stepanek are independent, fee-only advisors at Endeavor Wealth Advisors. Contact them at (216) 373-0808 or hello@endeavorwa.com.


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