Michael J. Bergmann, LLC, a Cincinnati Law Firm -- Estate Planning

Mr. Bergmann has been helping clients with their estate planning needs for nearly 25 years.

What Is Estate Planning?
"Estate planning can have many meanings, however, as used by the legal profession, it means “making arrangements for the handling of [a client's] personal and financial affairs."

In the not-too-distant past, estate planning focused solely on the administration and distribution of the client's financial estate, through the preparation of Will or simple Trust. During the last decade, however, the client's personal affairs--primarily his/her health care during disability, his/her manner of dying, and even the use and/or disposition of his/her body on or after death--have become an important part of the estate planning process.

Also, the scope of estate planning has expanded from dealing primarily with the administration and disposition of the client's affairs at his/her death to addressing the client's expected financial needs during a lifetime disability, and the needs of his/her family during the years or generations after his/her death.

Furthermore, limited Medicare nursing home coverage and Medicaid transfer prohibitions have made long-term nursing care planning a subject which many older clients must consider. With proper planning, it is often possible to save a substantial part of the client's estate. That planning may include doing estate planning before long-term care is necessary; obtaining long-term nursing care insurance; and/or making full use of the exemptions and exclusions which are available under the Medicaid laws and regulations.

Failing to Plan.
The saying "failing to plan is planning to fail" (attributed to Ben Franklin) is particularly relevant as it applies to the subject of estate planning. With appropriate estate planning, most people can avoid probate administration, eliminate or minimize the estate tax liability of their estates, and accomplish other lifetime, testamentary, and/or post mortem ("after death") objectives. Despite that fact, many people "fail to plan" and their estates do not achieve otherwise attainable objectives.

How Can Mr. Bergmann Help?
Mr. Bergmann has the knowledge, training, and experience to help his clients identify their estate planning objectives and the means of attaining them, to prepare any document(s) which they need in order to accomplish those objectives, and to assist his clients in successfully implementing their estate plans.

In all cases, Mr. Bergmann tries to educate his clients regarding (1) the simple ways to avoid probate administration (unless probate is desirable under the client's circumstances) and eliminate or minimize the estate tax liability of their estates; (2) alternative ways to accomplish their estate planning objectives (so the client can make informed decisions about their estate planning); and (3) the importance of following through on the implementation of their estate plans.

Examples of Estate Plans.
Estate plans which Mr. Bergmann has done for his clients have included the following:

Example No. 1: The Average
Family

Estate Planning Circumstances
The clients had non-taxable estates and no special estate planning needs.

Estate Planning Documents Used
Mr. Bergmann prepared Last Wills and Testaments ("Wills"), Durable Powers of Attorney for Financial Matters and for Health Care Decisions, and Living Will Declarations.

Example No. 2: Too Much
Too Soon

Estate Planning Circumstances
The clients had minor children and estates which were larger than they wanted to their children to inherit at 18 years of age.

Estate Planning Documents Used
Mr. Bergmann prepared revocable Trust Agreements and all of the documents mentioned above in xample No. 1 for each client. The Trust Agreements provided that, if both parents were deceased, their children would receive lump sum distributions at ages when they would likely be mature adults (e.g., 25 and 30 years of age).

Example No. 3: Parents With
Taxable Estates

Estate Planning Circumstances
The clients had potentially taxable estates which they wanted to enjoy, make available to their surviving spouse after their death, and, then, have transferred to their children under tax-advantages circumstance, at specified future times.

Estate Planning Documents Used
Mr. Bergmann prepared revocable Trust Agreements (called A-B Trusts upon the death of the first-to-die of his clients). to meet these objectives.

Example No. 4: The Jumbo Life
Insurance Policy

Estate Planning Circumstances
The client wanted to buy a life insurance policy which would pay significant benefits on his death, however, if he did so, his estate would be subject to considerable federal estate tax.

Estate Planning Documents Used
Mr. Bergmann prepared a Trust Agreement creating an Irrevocable Life Insurance Trust ("ILIT") to acquire the life insurance policy, pay the premiums owed there under, and receive the benefits from there on the client's death. By having the Trust receive the death benefits, they will not be considered to be a part of the client's estate for federal estate tax purposes, although they are payable under the ILIT to the client's beneficiaries.

Example No. 5: Transfering the
Family Business

Estate Planning Circumstances
The clients owned a business and want to transfer it over time to their children under potentially tax-advantaged circumstances.

Estate Planning Documents Used
Mr. Bergmann prepared a Family Limited Liability Company ("FLLC") to own the clients' business and to give the clients a means by which to distribute partial interests therein to their children, from time to time, as the children move towards adulthood and become more mature, on a tax-advantaged basis.

Example No. 6: Providing for the
Disabled Child

Estate Planning Circumstances
The clients had a disabled adult child for whom they were caring and wanted to provide for his comfort without jeopardizing the child's entitlement to receive government-subsidized benefits.

Estate Planning Documents Used
Mr. Bergmann prepared an "Absolute Discretion" Trust Agreement whereunder the clients had the absolute discretion to make distributions for the disabled child or any number of other specified beneficiaries. Because the disabled child was not the sole beneficiary of the Trust and the Trustee had no obligation to pay anything or anyone on his behalf, the government could not lay claim to any Trust assets or assert that they jeopardized the child's entitlement to receive government-subsidized benefits.

Example No. 7: Providing for Future Generations

Estate Planning Circumstances
The clients wanted to provide for their grandchildren while preserving their estates for later generations.

Estate Planning Documents Used
Mr. Bergmann prepared a "Dynasty" Trust to provide for the clients' grandchildren and for later generations.

Example No. 8: Giving to Charity on a Tax-Advantaged Basis

Estate Planning Circumstances
The client had a charitable inclination and was willing to donate property to/for a charity provided that he can get some benefit out of the transaction.

Estate Planning Documents Used
Mr. Bergmann prepared an irrevocable Trust Agreement creating a Charitable Remainder Interest Trust ("CRIT") for the client. It specified that the client was entitled to a specified rate of return each year and that, on his death, the remainder of the Trust assets would be distributed to his designated charity. The client contributed highly-appreciated stock to the CRIT which was sold and the gross proceeds there from reinvested by the Trustee in a high-yielding bond fund. The client took a charitable deduction for giving his selected charity an interest in the Trust, and used the tax dollars saved as a result thereof to buy a life insurance policy. On his death, the life insurace death benifit proceeds will replace the value of the contributed stock in his estate.

READERS OF THIS PAGE SHOULD BE CAUTIONED THAT, JUST BECAUSE MR. BERGMANN PREPARED CERTAIN DOCUMENTS FOR CLIENTS HAVING CIRCUMSTANCES SEEMINGLY THE SAME OR SIMILAR TO THEIR OWN, DOES NOT MEAN THAT THOSE DOCUMENTS ARE THE ONES WHICH THEY NEED TO ACCOMPLISH THEIR PARTICULAR ESTATE PLANNING OBJECTIVES. IN EACH OF THE ABOVE-STATED EXAMPLES, THE FACTS GIVEN ARE A GREAT SIMPLIFICATION OF THE INFORMATION WHICH MR. BERGMANN AND HIS CLIENTS CONSIDERED BEFORE ANY ESTATE PLANNING DOCUMENTS WERE PREPARED.

The firm would be pleased to assist any new or existing clients with their estate planning.