Law Articles

Parents often want to help an adult child buy a home or share in family property by selling it for less than fair market value. The idea is simple and generous. However, there may be unintended consequences. A below-market sale can trigger gift and income tax issues, complicate estate plans, and spark family disputes. Addressing these risks before transferring property for less than it is worth can prevent surprise tax bills and strained relationships. When a Sale Becomes a Gift Suppose a parent sells real property worth $500,000 to a child for only $300,000. The transaction is generally treated as part sale and part gift: the $300,000 is the sale price, and the $200,000 discount is a gift. A gift of that size typically requires the gifting party to file a federal gift-tax return. For 2026, the federal annual gift-tax exclusion is $19,000 per recipient. Even if no gift tax is owed immediately, the gift reduces the parent’s remaining lifetime gift and estate-tax exemption. Capital Gains Can Still Apply A bargain sale can create income tax for the seller. The parent must allocate tax basis to the sale portion and determine whether the amount received exceeds that basis. If it does, the parent may recognize taxable capital gain. The analysis differs for a principal residence, rental property, farmland, or investment property, and those differences can materially change the tax result. The Child’s Basis—and Future Tax Bill For the child, tax basis matters. Property received by gift generally carries over the parent’s tax basis rather than resetting to current fair market value. If the child later sells, that carryover basis can translate into capital gains tax on appreciation that occurred before the transfer. If the child receives real property at a parent’s death instead, the child’s tax basis typically “steps up” to the property’s fair market value as of the parent’s date of death. This higher basis can significantly reduce, or even eliminate, capital gains tax if the child later sells. Jeopardizing Parents’ Financial Security Transferring substantial equity can affect the parents’ ability to fund retirement, medical needs, and long-term care for the rest of their lives. Parents should assess whether their remaining assets will be sufficient to meet foreseeable expenses. Family Disputes A sizable discount to one child can lead to resentment among the other children. Families should address whether the transfer is intended as an advance on inheritance or a separate gift, and document the intent to avoid disputes later. Medicaid Rules Transfers for less than fair market value can affect Medicaid eligibility in the future and may lead to a period of ineligibility. Timing and documentation can be decisive. Before transferring valuable Ohio real estate to a child for less than fair market value, consider an independent appraisal and a review by an Ohio real estate attorney and a qualified tax professional. A prudent review should cover the property’s fair market value and tax basis, the child’s intended use, the parent’s financial needs, and the family’s estate-planning goals. Careful planning on the front end is the best defense against unexpected taxes, financial strain, and family conflict. Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

Charles signed a durable financial power of attorney (“POA”) more than a decade ago, naming his son, William, as his agent. As Charles' cognitive abilities gradually declined, William began handling his father's banking and financial affairs, including paying bills and managing accounts. Recently, William visited Charles' bank to transfer funds needed to pay ongoing expenses. When he presented the POA, a new bank clerk reviewed the document and informed him that it was "too old" and that the bank would require a more recently executed POA before allowing the bank transaction. This posed a big problem since Charles no longer had the mental capacity to execute a new POA. Is the bank correct? Does a POA expire simply because it was signed many years ago? And what options does an agent have when a financial institution refuses to accept an older, but otherwise valid, POA? In Ohio, a durable power of attorney does not become invalid simply because it was signed many years ago. A properly executed financial POA may remain fully effective for decades, provided: The principal is still living; The principal has not revoked the POA; The document does not contain an expiration date or terminating event; The purpose of the POA has not been completed; and No other statutory termination event has occurred. In other words, a durable financial POA does not expire merely because it is old. Although Ohio law recognizes older powers of attorney, banks frequently request more recent documentation. This is usually a matter of internal risk-management policy rather than a requirement of Ohio law. Financial institutions may have concerns that the principal revoked the POA or executed a newer one naming a different agent. Since banks face potential liability if they allow an unauthorized person access to an account, older documents often receive additional scrutiny. To reduce uncertainty, a bank may request supporting documentation before accepting an older POA. Ohio law specifically provides for an "Agent's Certification as to the Validity of Power of Attorney and Agent's Authority." This certification allows the agent to affirm, under penalty of perjury, that: The principal is alive; The principal has not revoked the power of attorney; The agent's authority has not terminated; Any required triggering event has occurred, if applicable; and The agent is properly serving as a successor agent, if designated as one. An agent's certification is often sufficient to address a bank's concerns. If the bank still refuses to accept the document, legal counsel may be able to assist. In many cases, financial institutions will accept an attorney's opinion letter confirming that the POA remains valid and effective.  When a bank demands a newer POA, it is important to understand the difference between the bank's internal policies and Ohio law. By providing the appropriate certifications, and, when necessary, obtaining legal assistance from a trusted attorney, agents can often secure recognition of a valid existing POA. If those efforts are unsuccessful, the most practical solution may be transferring the accounts to a financial institution with more reasonable POA policies. If you need legal support, Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

Keeping residential rental properties safe isn’t just good practice for landlords - it is required by Ohio law. Landlords of residential rentals have a statutory duty to maintain properties in a safe and fit condition that is suitable for habitation. They cannot simply collect rent while ignoring serious safety violations. The Ohio Landlord-Tenant Act sets forth the basic obligations related to the condition of rental properties. Landlords must do all of the following: comply with applicable building, housing, health, and safety codes that materially affect health and safety; make all repairs necessary to keep the premises in a fit and habitable condition; keep common areas safe and sanitary; maintain electrical, plumbing, heating, ventilating, and air conditioning systems in good and safe working order (when required to be supplied by the landlord); and supply running water, reasonable amounts of hot water, and reasonable heat (unless the dwelling unit is individually metered and the tenant controls those utilities). When a landlord fails to meet these duties, Ohio law provides tenants with structured remedies. Tenants are not allowed to simply withhold rent from the landlord until repairs are made. Likewise, tenants cannot simply move out of the premises. The tenant must first give written notice to the landlord specifying the acts, omissions, or code violations that constitute the noncompliance. The tenant must deliver the notice to the person or place where rent is normally paid. After receiving written notice, the landlord must remedy the condition within a reasonable time (30 days or sooner depending on the severity of the issue). If the landlord fails to correct the problem within the required time, the tenant may then do one of the following: 1. Deposit rent with the clerk of the municipal or county court instead of paying the landlord directly. 2. Apply to the court for an order directing the landlord to remedy the condition. The court will determine whether the landlord is in violation of the Landlord-Tenant Act, if the condition materially affects health and safety of the tenant, and whether the tenant gave the landlord proper written notice of the condition. Minor repairs, routine maintenance items, and cosmetic conditions do not qualify. If these requirements are met, the court may order repairs, authorize a rent reduction, or permit the tenant to use escrowed rental payments to make the required repairs. Generally, a court will not order complete rent abatement unless the premises is uninhabitable. 3. Terminate the rental agreement. Please note that a landlord may dispute the grounds for termination in court. It is important to note that the tenant’s remedies are only available if the tenant is current with all rental payments under the lease. Also, these remedies are not available if the landlord owns three or fewer rental units and has provided notice of that fact to the tenant. If you believe your landlord has violated the Landlord-Tenant Act, it is wise to consult with a trusted attorney to make sure all tenant remedies are available. Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

Rising real property taxes are increasingly concerning older homeowners. For many retirees, higher tax bills are difficult to manage on fixed incomes. Fortunately, Ohio offers a measure of relief through the Homestead Exemption program. The Homestead Exemption is a property tax reduction available to qualifying homeowners. It applies to primary residences and the surrounding land not exceeding one acre. Primary residences include single-family homes, units in a multi-family dwelling, and manufactured or mobile homes taxed as real property. Essentially, the program reduces the taxable value of your home for tax purposes. If you qualify, the exemption reduces your home’s taxable value by up to $25,000 of the property’s true value. This results in a smaller annual tax bill. To qualify for the Homestead Exemption, an applicant must be 65 years of age or older, or permanently and totally disabled. It is also available to disabled military veterans with a permanent, total service-connected disability and the surviving spouse of a peace officer, firefighter, or emergency responder who died in the line of duty or from a related injury or illness. There is also an income cap for most homeowners to qualify. Currently, a homeowner’s total income must not exceed $30,000. “Total income” refers to the modified adjusted gross income of the owner and the owner’s spouse for the preceding tax year. Homeowners must own and occupy the home as their principal residence as of January 1 of the year they file the application. The application is filed with the county auditor of the county in which the property is located. Typically, applicants need to provide proof of age or disability and income documentation with the application. The county auditor must approve or deny the application within 30 days. If the application is approved, the county auditor will apply the reduction directly to the homeowner’s property tax records. The Homestead Exemption generally continues automatically in future years, provided the homeowner remains eligible. If the application is denied, the county auditor will provide a notice explaining the reason. Applicants then have the right to appeal the decision to the county board of revision within 60 days. It is important to note that the Homestead Exemption does not transfer automatically if the homeowner moves. A new application must be filed for any new qualifying property. Also, homeowners must notify the county auditor if they later become ineligible. Meanwhile, lawmakers in Ohio continue to debate expanding the Homestead Exemption. Recent proposals include increasing the exemption amount and raising income limits to include more homeowners. While no major expansion has been enacted, the discussions reflect a desire to address the financial pressure of property taxes on seniors. As rules and income limits for the Homestead Exemption may change, seniors who believe they may qualify—or who are unsure—should consult their county auditor or trusted attorney for assistance. Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

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Living wills allow competent adults to state preferences for life-sustaining treatment (e.g., ventilators, feeding tubes) under specific conditions. In Ohio, a living will becomes operative when two physicians certify that the patient is either terminally ill or permanently unconscious and unable to make informed medical decisions. If, in light of the patient’s condition, the attending physician determines that life sustaining treatment should be withheld or withdrawn, they must document this in the patient’s medical record and make a good-faith effort to notify those individuals named in the living will as contacts. But what happens if the patient’s family or loved ones disagree with the physicians’ medical opinion? Ohio law provides a formal objection process to challenge the physicians’ findings. The challenger must notify the attending physician of the objection within 48 hours and file a complaint in probate court within two business days. The complaint must identify the patient, state the relationship, and specify which determination is contested. Typical grounds include: • Incorrect medical findings (e.g., diagnosis of terminal or permanent unconscious status); • Wrong assessment of the patient’s decision-making capacity; • Reasonable possibility that patient will regain capacity to make decisions; • Proposed action not permitted by the living will; • Living will executed under duress, fraud, or undue influence; or • Living will does not comply with Ohio statutory requirements. The probate court must serve all interested parties with a copy of the complaint within three days after its filing and must conduct a hearing at the earliest possible time, but no later than the third business day after service has been completed. Immediately following the hearing, the court must issue a written order, which may: • Uphold the living will and physicians’ findings; • Direct reevaluation of the patient’s condition or capacity; or, • Declare the living will invalid and prevent its implementation. Disputes involving end-of-life care are legally complex and deadlines to challenge doctors’ findings under a living will are quite short. If you are presented with such a case, it is wise to consult with a trusted probate attorney to assist you. Laribee Law, LLP is here to assist you. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.

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A living will is an important part of an estate plan that allows a competent adult (the “declarant”) to state his or her preferences for medical treatment in certain situations. Unlike a last will and testament that directs how property and assets should be distributed after death, a living will allows the declarant to decide in advance whether they want life-sustaining treatments, like a ventilator, CPR, or a feeding tube, in the event they become terminally ill or permanently unconscious and when can no longer communicate their wishes. To be clear, a living will is only effective when the declarant is unable to speak for themselves and direct their healthcare. For purposes of a living will, a terminal condition is defined as an irreversible, incurable and untreatable condition caused by disease, illness or injury from which there can be no recovery and death is likely to occur within a relatively short time if life-sustaining treatment is not administered. A permanently unconscious state is defined as an irreversible condition in which the declarant is permanently unaware of himself or herself and surroundings and is unable to suffer or feel pain. At least two physicians must examine the declarant and confirm the declarant’s condition. The physicians must also determine that there is no reasonable possibility that the declarant will regain the capacity to make informed decisions and that the life-sustaining treatment would mainly prolong the process of dying. If the declarant is either in a terminal condition or in a permanently unconscious state, the living will directs the declarant’s physician to issue a DNR (do not resuscitate) order and to allow the declarant to die naturally. The declarant’s physician would administer no life-sustaining treatment, including CPR, however the declarant would receive comfort care necessary to make the declarant comfortable and to relieve their pain. The living will must be signed by the declarant at the end of the document and witnessed by two witnesses or notarized by a notary public. The witnesses must be adults who are not related to the declarant by blood, marriage, or adoption, who are not the attending physician of the declarant, and who are not the administrator of any nursing home in which the declarant is receiving care. If a declarant has both a living will and a valid durable power of attorney for health care, the living will supersedes the durable power of attorney for health care to the extent that the provisions of the documents would conflict. In other words, a health care agent cannot override the declarant’s wishes in a living will. A living will has no expiration date. However, a declarant can revoke the living will by notifying their physician and physically destroying the original and all copies. Hospitals and physicians are permitted to rely on a copy of the living will instead of the original. Further, the living will often includes a statement that the declarant intends that the living will be honored in another state to the extent allowed by law. Ultimately, a living will allows a declarant to control their healthcare. It reduces stress for loved ones and prevents disagreements among family members during emotional situations. By clearly stating healthcare wishes in advance, you ensure that your voice is heard when you are unable to communicate your wishes. It is important to seek the assistance of an attorney to make sure that the living will is properly prepared and executed. Laribee Law, LLP is here to assist you with preparation of a living will and your other estate planning documents. Michael Laribee is a partner in the Medina law firm of Laribee Law, LLP. This article is intended to provide general information about the law. It is not intended to give legal advice. Readers are urged to seek advice from an attorney regarding their specific issues and rights.