Wednesday, January 22, 2020

New Year Resolutions!

It's 2020!  A new year.  A new decade!  A new !?!?!?  Along with signing up for gym memberships, getting an estate plan seems to be one of the top new years resolutions.  Each January we open a fresh new calendar and plan for growth and adventures.  We resolve to be more organized, to be healthier, to be on top of things.  If you are one of the many Americans making the resolution to get your estate in order, here are a few things to consider.

  1. Estate Planning boils down to control.  Who will do what, what will go where?  If you do not make the decision and put into a legal format someone else will, often dictated by state statute.  If you need a source of motivation to roll up your sleeves and take action, focus on "control";
  2. Hire a professional.  We live in a DIY society, and that is a wonderful thing -- if you have the time, patience and skill set to complete the project appropriately.  My husband and I recently updated our kitchen, but not on our own.  We hired experts.  The result was a quality kitchen in a short period of time.  There are plenty of resources about doing an estate plan, but are they the right fit for your situation and skill set?
  3. Accountability.  Who will make sure you actually finish creating an estate plan.  It's easy to order books on Amazon, download forms off the web, or attend a free seminar at the local library.  But until you put ink to paper on final documents, you do not have an estate plan.  Do you need a "workout buddy" to keep you motivated?  Perhaps a friend, a spouse, or an attorney that will check in on you to keep the project moving forward.
  4. Don't Procrastinate.  Life happens, and ends, in a second.  Medical events develop leaving one incapacitated and unable to create a plan.  Sometimes a death is out of the blue and instantaneous, leaving no time to make decisions.  All too often someone falls gravely ill and while processing diagnoses and treatment plans, they attempt to wrap their energy and mind around putting together an estate plan.
Wishing you a wonderful 2020, and if it's on your to-do list, may you update or create an estate plan that gives you peace of mind.   Thanks for reading.  As a reminder, a blog post is not legal advice.  It is simple thoughts from my side of the desk.  Please consult with an attorney in your state, and obtain legal advice specific to your situation.

Wednesday, December 11, 2019

Book Review: A Beginner's Guide to the End: Practical advice for living life and facing death

What I've Been Reading: A Beginner's Guide to the End: Practical advice for living life and facing death by BJ Miller, MD and Shoshana Berger published in 2019.

A Beginner's Guide to the End: Practical advice for living life and facing death is an excellent resource that covers a broad swath of material.  Divided into 5 sections, the authors provide the reader with thoughts, suggestions, sample questions and other tips from the financial aspects of end-of-life care to asking for help to pre-planning a funeral/burial.  The breadth of material covered is wide, perhaps the widest I've seen in any one book.  With that breadth comes a lack of depth.  That is not necessarily a negative -- the breadth shows the reader the wide range of issues to address and dips into each.  A reader would then seek out more thorough information on any one topic of interest.  For example, estate planning is covered in less than 5 pages, yet it is a topic I can speak about for 2 hours or more.

The book is easy to read, the font seems a bit larger, and there are sidebars that speak directly to a caregiver.  The reason I did not give this book 5 stars was the fact I could not get around the fact the book seems highly logical and likely beyond the mental, emotional, and physical condition of someone diagnosed with a terminal illness.  I believe the book would be of most use to family and or caregivers of a very sick person.  Should the patient receive a diagnosis and maintain the emotional and physical strength to read this material, that is wonderful.  Having walked with both of my parents through their final years and passing's as well as nearly 15 years of practicing estate planning, I can attest to the fact this book may be beyond many people who are terminally ill. 

Overall, I highly recommend this book.  There is no need to actually wait for a terminal diagnosis to take control of your life.  From finances to designating people in charge to contemplating your final disposition, this is a book that touches on everyone's life.

For additional information on this book you may want to listen to WPR's Central Time show from 7/25/19 entitled Practical (And Uplifting) Advice For Preparing For The End.  NPR ran a similar show on December 3, 2019 on Fresh Air with the title After A Freak Accident, A Doctor Finds Insight Into 'Living Life And Facing Death'.

Thursday, October 3, 2019

Worst Case Scenario and a Flock of Wild Turkeys

Glancing out my kitchen window early this morning, coffee in hand as I kick-started my day, I noticed "the boys" were in our driveway.  Over the summer months a flock of 5 to 7 wild male turkeys became "the boys" in our household as they made daily visits and precarious crossings of the fast moving artery on which we live.  Out of the corner of my eye I noticed my husband was set to leave for work, it was a great day for his 8-mile commute along Madison's bike paths.  Without thinking I warned "be careful when you take your bike out, when "the boys" get confused they run in circles and the last thing we need this morning is a couple of turkeys dashing into our garage!"  As we move into our 14th year of marriage my husband has grown accustomed to my dire predictions, yet today he raised his eyebrows just enough to convey "really Melinda, what are the chances?"  My standard response "Well, you married a lawyer.  I was trained to predict the worst case scenario and plan backwards!"  His bike commute started without incident, and no turkey dashed into our garage.  But hey, I was ready for them if they did!

At work, worst case scenario thinking is an asset.

Worst-case scenario is a concept in risk management wherein the planner, in planning for potential disasters, considers the most severe possible outcome that can reasonably be projected to occur in a given situation.  

As an estate planning and probate attorney I know that no one is immortal.  Client meetings start with a discussion what will happen upon the client's death.  Then what happens if the client's heir(s) predecease the client.  "Hmmm, I never thought of that!" is a common client comment.  And that's my job, to think of the scenario they have not.  Without a contingency plan (or two) State Statues may be the default distribution method for their estate, and that can be problematic.  Do you really want the brother you haven't spoken to in a decade to inherit if you children do not survive you?  What would it mean if you sister, who survived a horrible motorcycle accident and is now receiving care through Medicaid, might inherit?  It's a way of thinking that clients seek out, and spouses find mildly amusing when a brain envisions a flock of wild turkeys running into our garage.

Thanks for reading.  As a reminder a blog is meant to spur thought and discussion, it is not a source of legal advice.  Please consult an attorney licensed in your state of residence for legal advice specific to your situation.  And beware of urban turkeys!

Written by Melinda Gustafson Gervasi
Oct. 3, 2019

Monday, August 26, 2019

Beneficiary Forms Gone Horribly Wrong

Beneficiary Forms Gone Horribly Wrong.
By Melinda Gustafson Gervasi

Within the legal community there is a decent amount of discussion about whether or not our professional lives will be usurped by on-line and digital platforms.  Days like today reassure me that my professional life has a few good years, decades even, before a software engineer codes me out of business.

Take life insurance and children for instance.  New client call comes in.  Brief biographical information is provided related to: marital status, children, and financial instruments.  In short, caller is single with a minor child and his best friend from college is named as beneficiary of the life insurance because friend is a responsible adult who will do the right thing.  An actual attorney will likely hear this and say, "wait, tell me that again please" as her eyebrows rise higher on her forehead.  In contrast, your standard online will-writer will prompt "check here if you have named a beneficiary on your life insurance.". 

In my humble opinion, when you name a beneficiary who is not the person benefiting from the money you are making a big mistake.  Big.  Huge!  Why?  That money goes to that person, no strings attached.  And sure, most of the time that person is trusted and will do the "right thing".  However, if they give too much money to person the money was really meant for, they make get slapped with the federal gift tax.  Moreover, what if trusted friend goes through a divorce, dies, or gets sued?  That life insurance money, meant for someone else, will be caught up in the friend's mess.

This is the perfect example of why a lawyer still provides greater benefit than an online system.   When something does sound right, we'll raise our ears up and dig into the details making sure a huge mistake has not or will not occur. We can work around that pit of a mess and provide far more uniquely crafted documents.

Thanks for reading, and always, remember a blog is meant to spark discussion and should not be taken as legal advice.  Moreover, we have 50 different states, each with its own set of estate planning and probate laws.  Always seek the advice of a licensed attorney in your home state, not a blog.

Monday, August 12, 2019

Busting Myths & Misconceptions: Reflections on The Grand Budapest Hotel, a Wes Cravin Film.

Busting Myths & Misconceptions: Reflections on The Grand Budapest Hotel, a Wes Cravin Film.
By Melinda Gustafson Gervasi

From Hollywood to Netflix to TV dramas, legal thrillers remain a popular film genre.  Recently I enjoyed watching The Grand Budapest Hotel, a Wes Craven film.  Set in a fictional remote mountain village somewhere near the borders of Germany, Switzerland, and France, it is a quirky film revolving around the owner succession of a grand hotel. There is the requisite scene for a legal drama: " the reading of the will".  From the deceased's children to her cousins thrice-removed, all assemble in a dark cavernous room, dressed in black, with an attorney at the center of attention.  Here the legal misconceptions leap off the screen:

Except in limited circumstances, the attorney who drafts a will is not the Executor (or what Wisconsin law calls the Personal Representative) of the will;
The will in the movie is a massive heap of papers, of which the lawyer verbally summarizes in a sentence.  Here in Wisconsin a copy of the will is delivered to the Interested Parties (those named in the will, the deceased's next of kin even if not named in the will, and any named nonprofits).  Gathering a cast of characters in a large room where the will is read to them is dramatic but not realistic.
A third scene shows the person who inherited a valuable painting under the will dictating to his assistant a will, under which the assistant will be the sole heir.  In my opinion a will written by the assistant, who is inheriting, is not a wise move.
The movie did contain some accurate points.  First, an amendment to a will is called a codicil.  Second, the attorney for the estate represents the estate. The the attorney does not represent the interests of any interested parties.  That would be a conflict of interest.

This was a fun movie. Just do not take screen plays to be legal advice or education.  If you have any legal thriller books or films with estate planning or probate issues you would like me to comment on in future newsletters, please send me a message!

Monday, August 5, 2019

50 States, 50 Different Sets of Estate Planning & Probate Laws

As Summer 2019 begins its slide towards September our family strives to complete our annual License Plate Game.   It's a great way to reinforce the fact the United States is made up of 50 different states (for our elementary aged kids), all with different plates.....and sets of laws about estate planning & probate.

Unlike federal law, such as immigration, which is the same from Maine to California, estate planning and probate laws are written at the State level.  Leaving us with 50 different sets of laws about who is in charge and where things go upon your death, as well as next of kin's ability (or lack of) to make medical and financial decisions if you are alive, but too ill to act.

Keep this in mind when you are reading materials for a national audience.  For example, mass produced materials about estate planning claim the fee for a court to oversee the transfer of probate assets (those assets that do not have a designation or label on them about where it goes when you die) is 6, 8 even 10%.  While that may be true in some states, it is not true in all states.  Wisconsin has a fee of 0.2%, no where near the fees in other states in the country.

It is also helpful to keep the concept of 50 different states in mind when talking with family and friends who live outside of your home state.  Terms and powers can very, especially in the are of powers of attorney.  You'll find "executor" in one state, and "personal representative" in another.  Both perform the same basic job function.

Please remember that a blog stimulates thoughts and ideas, but is not legal advice.  Please seek counsel from an attorney licensed in your home state.  And may you all experience the trill of finding a Hawaiian plate outside a Wal-Mart in Dodgeville, Wisconsin when you stopped to pick up a fishing license before enjoying Gov. Dodge State Park's summer activities. Thank you for reading.

Monday, July 29, 2019

You Pay For What You Get: Beware Free Legal Advice

Be Alert! Image by M. Gustafson Gervasi 2019
Once upon a time an elderly women, Agnes, went into her bank to review her accounts.  Behind the desk sat an eager and chipper 23 year old "banker".  With good intentions of providing the best banking services possible, the young banker encouraged the older women to add her daughter to her bank accounts in order to "make things easier."  Relying on her long relationship and established trust with the bank, Agnes took the advice.  When the door closed upon Agnes' exit, her daughter, Anne, had been made a joint owner of the bank account.

Time passed and Agnes' health took a turn, with her earthly life ending six months after the bank visit.  Grieving, yet still functioning, Anne set about taking care of Agnes' affairs.  One day she went into the bank to settle her mother's accounts, death certificate in hand.  To her surprise, the 23 year old banker informed Anne about the joint ownership of the accounts, indicating they would all pass into Anne's name, a nice sum of $200,000.

Anne's next stop was her attorney's office, where the pleasant surprise of the ease of money transferring from Agnes to Anne came to a screeching halt.  As the attorney talked a sense of dread built up in Anne's stomach.  You see, Anne has a sister, Amanda.  As the meeting progressed, Anne learned that the joint ownership allowed the balance in the bank account to become Anne's, but Anne's alone.  She certainly could share with Amanda, but it was not required.  Being a loving sister, Anne had planned to simply write her sister a check, and then heard the term "gift tax". 

Under current law, set by the IRS, any one person can give another person up to $15,000 per year (exceptions to apply this being the IRS tax code).  Anne could give her sister up to that amount, but the balance in excess of the $15,000 threshold would be subject to the gift tax.  Anne owned the money and was gifting $100,000 to her sister.  Long story short, CPA and attorney billable hours were used to develop a transfer plan to Amanda that was legally acceptable, and a pinch of wishful thinking was added so that none of the family would die before the transfer was complete.  It all worked out in the end, however, the complexity and associated cost was the direct result of the free legal advice handed out by a young banker.  A banker, not an attorney.  A banker, not a CPA.  Remember, you get what you pay for, and in this case the free legal advice turned into some hefty bills and stress. 

Thank you for reading, and please remember that a blog is not legal advice.  A blog encourages thought and reflection.  Always seek legal counsel from a licensed attorney in your home state before taking any action on this subject matter.