Tuesday, September 19, 2017

What's The Best Age to Release the Inheritance?

A significant part of my practice involves drafting testamentary trusts for parents with young children, usually aged 18 or younger.  A testamentary trust is a will that says I leave my probate assets to my spouse, but if my spouse has predeceased, then to a trust for my children.  This type of trust does not exist until both parents are deceased, and is created as part of the probate process.  It is not the same as a living revocable trust, which is created during life to hold assets while you are alive.
When creating a testamentary trust parents need to name a primary and secondary trustee. This is the person (or institution) that will invest the funds in the trust, file tax returns, and decide on how the monies are spent until the trust ends.  Which leads to the next question, when does the trust end?  "Most clients write until my youngest living child reaches age 25 or 28" is what I share with my clients.  "Personally, my wills says until my youngest living child reaches age 30 -- I adore my children, but I am aware of studies indicating the brain is still growing and forming into the mid-20s."

Often times clients are stunned when they hear the number 30, and question my decision.  Then I go on with more stories from my personal experience.  At the age of 40 I had lost both of my parents and received a small inheritance.  And I could not believe how many friends and family were encouraging me to "spend a little" on myself.  Day in and out for nearly as year people would say "come on, you've been through hell, treat yourself".  For a brief time I thought they were right. -- "a simple pair of diamond stud earrings would be practical, something I could wear for work, and one day pass on to my daughter" -- was a pattern of thought I had daily.  Then I looked at the prices, and there were more zeros than my frugal heart could handle.  In the end I bought piece of mind and put the inheritance in a brokerage account.

My fake diamond earrings are a standard piece of my work attire, and so now is this nugget to think about.....your child may be lovely, stable, and frugal.....but when they get an inheritance all the "shoppers" in their life will be more than eager to help them spend the money.  In the end a client sets the age they feel is right for their family.  But when making that decision, factor in the influence of others, both those who mean well and those who may want to take advantage of someone grieving.

Winter Break 2016 we took a road trip to Arkansas and went to Crater of Diamonds State Park, the only pubic park in the US where someone can dig for diamonds.  If you find one, you keep it.

The perfect way for the kids, then 8 and 6, to spend an afternoon.  Digging in the mud.  No diamonds were found.  And that is the closets I'll ever get to acquiring real diamonds.

Friday, July 21, 2017

Probate Completed, Where Are the Balloons?

For the past 12 to 18 months, possibly longer, you the Personal Representative in a Wisconsin probate have gathered papers, filed taxes, written checks, emptied the fridge, sold the car, distributed the family photographs, written more checks, and have your signature notarized more times than you can recall.  And now the day is here, the day you file the FINAL papers to close the estate.  The last bill to the lawyer is paid, you have free time in your calendar once again.  Things settle down into a new routine, the routine after the loss of a loved one, the routine after the work of the probate, and it feels like something is missing. You did it -- yet those filed court papers just slide off into an abyss.  Will you get a mailing from the court, some sort of official notice that you completed this marathon of a task?

If you are a Personal Representative in a Wisconsin probate the answer is simple, no.  There is no fan fare, no balloon drop, no confetti falling from the sky, not even a ribbon saying you crossed the finish line.  All there is is an entry in the CCAP system stating:
"Probate  -- Closed - File Retained Electronic"
That's it.  A one line entry closing out a challenging job completed during emotionally draining times.  Government has limited resources, and likely does not have the capacity to send out a form let alone a congratulations.  But I'll leave one here for you via You Tube -- enjoy, and pat yourself on the back for a job well done.

Thursday, June 1, 2017

Thoughts on The Nest: A Novel

Recently I had a chance to sit down with a book that had been on my "to-read" list for some time, The Nest by Cynthia D'Aprix Sweeney.  A work of fiction, the author weaves a complex story line surrounding four adult siblings and the ripple effect of one siblings reckless actions. The book opens with a scathing accident caused by the eldest Plumb child, unleashing a family drama when the mother uses the family trust, lovingly called The Nest by the family, to pay for medical bills of a victim of the accident.  With promises to repay The Nest by the eldest, the book takes the readers into the world of adult children who have spent and counted on these funds prior to the monies scheduled release, the pending 40th birthday of the youngest Plumb child.

From a story point of view, the book is excellent. Complex and vivid characters, unexpected development, and a very nice pace.  However, do not read this book if you want to learn the correct names and functions of powers of attorney and trustee.  Time and time again the author uses incorrect legal terms or glosses over issues that would normally materialize in such a fact pattern.  As an estate planner, this was a difficult book to read.  There is already enough myth and misconception related to estate planning.  But if you are looking for an engaging beach read, pick this up and realize it's fiction!

Monday, August 1, 2016

What I've Been Reading: Being Mortal by Atul Gawande

What I've been reading.....

My decision to read Being Mortal: Medicine and What Matters in the End by Atul Gawande was driven by recommendations from both friends and clients. For the past few weeks I've been reading at a sluggish pace, unable to be swept away by a compelling narrative. My reading drought ended with Being Mortal, a nonfiction look at the end-of-life questions we should all be contemplating no matter our age or stage in life. As Gwande writes, "we only die once" -- let's get it right.

Gwande writes from the perspective of a physician, educator, and son helping his aging relatives on their final journey. Stories from his life and his patient's lives blend expertly with anthropological views on dying to modern statistics to an examination of what independence means to Americans. 

Only one element was missing from this book in my opinion; the book was missing a nice neat list of questions a patient could pose to his or her doctor when faced with a possible terminal illness. Gwande's book illustrates how important the role of physician can be in making the most of one's final days, and sadly that physician is not common place. Those questions might help with deciding which medical expert to work with. Having read Being Mortal I know that the questions "what do you fear the most?" and "what are your goals, what matters to you?" are key. Answers to these questions are vital to navigating the plethora of options laid out by physicians. 

From caretaker to medical professionals to loved ones to patient, anyone would benefit from reading Being Mortal.

Wednesday, June 1, 2016

When An Estate Is Too Small For Probate

It was a Tuesday evening.  Talk radio voices floated through the kitchen air while I prepared dinner.

Host: Welcome Randy from New York, what's your question?

Caller:  Hey, glad I got through.  I've got a question for you.  My aunt died and I'm taking care of her affairs.  She had a retirement account, and a car with a loan on it.  How do I sell the car and pay the loan?

Host: Well, looks like you'll be doing a probate.  Not much there, one retirement account, one car, and a loan you gotta pay before you distribute anything.  Now I'm no lawyer, but seems like you'll have to open a probate.....geesh, unless there is someway around it, but how are you gonna sell the car and sign the title.  Maybe you need a lawyer....

Caller:  Thanks, I'll see what I can do.

Why I thought they'd hear me, I do not know. One, this was radio, and two, it was an archived show. But that didn't stop me: YOU NEED A SMALL ESTATE AFFIDAVIT. STATES HAVE THEM! Not only did my thoughts float into thin air, our family cat who was calming waiting for my dinner preparation to turn toward the cabinet where I keep the moist food, cocked her head in disbelief wondering what her crazy human was doing.

Here in Wisconsin the form is called a Transfer by Affidavit, and can be used when a person dies owning $50,000 or less in probate assets.  Probate assets are assets that have no label or beneficiary form on them indicating who gets them at the owner's death.  Probate assets are distributed via will, or if no will, via state statute.  All states are different, but Wisconsin is not alone in having a simple procedure to oversee the distribution of a small estate without the formality (and length and cost) of a probate proceeding.

I love my financial talk radio, especially shows focused on smart frugal living.  But wow, they get a lot of calls about how to handle wills and probates.  This was not the first, nor will it be the last time I holler into the air of my kitchen with my thoughts on the callers question.  No one really likes a lawyer, but maybe these shows should have one on to answer questions occasionally.

Friday, November 27, 2015

A Grateful Lawyer: Reflection on 10 years of practice

Sitting in seat 15A of a jumbo jet's dimmed cabin, hovering somewhere above the Pacific Ocean doubt struck for a brief moment.  It was 1998 and I heard "Attention passengers, if there is a doctor on board would you please identify yourself."  With that 10 second announcement doubtful thoughts burrowed into my brain.  Heading from Honolulu to Madison via Seattle to begin a 3 year journey through law school, a process best described as going through boot camp while on Jeopardy, I realized I would never be on a plane and hear "Attention passengers, if there is a lawyer on board would you please identify yourself."

At the core of my decision to submit myself to the law school process and subsequent career path through the legal field was a firmly rooted desire to help others.  Would I be able to do that if I opted to be an attorney? I did the best I could at the moment, transferring my doubtful thoughts to an entry in my journal and then closed my eyes and continued down the path I had opted for the previous Spring.  I was headed to law school, time would tell if my wish would be fulfilled.

This past October marked 10 years of solo private practice for me in a practice where I a focus on estate planning and probate.  In more simple terms, I spend my days sorting through matters of illness, death and taxes.  During the past decade I have been summoned to the hospital bed of former clients in need of update documents as well as new clients desperately attempting to put their affairs in order.  Tethered to a hospital bed, a lawyer who answers the call for help is their only answer -- mobility is severely limited.  And a lesson I learned over the years; the lawyer needs to be able to furnish witnesses as well, something hospital shy away from more and more out of fear an employee of theirs will witness something and later end up in a court drama over contested documents.

Beyond offering on-site meetings in homes and hospitals for those who cannot make it to my office, I have also been the eyes, ears, and hands on the ground in Wisconsin for frail and elderly relatives living far away, unable to visit the area to attend to the home a recently departed loved one has left behind.  Part translator, part guide, part educator, I've been told I've eased their journey through the painful path of tending to a loved one's final affairs.

No, I never have and likely never will be startled awake on a flight to administer legal counsel, but after 10 years I can say I have been able to help others. And for that, I am thankful.  I look forward to another decade (or two) of helping others!

Image by M. Gustafson Gervasi, 2015

Wednesday, October 21, 2015

When To Update a Will & Estate Planning Documents

Final meetings with my clients end with me offering them water from the fridge in the waiting room and a Frango Mint (or two) that I keep in the waiting area.  Final meetings also end with a discussion of various housekeeping items, such as safekeeping of a will and the ever important question -- when should I update my will and estate planning documents?

Most clients assume I will answer with a specific number of years; seven to ten years is the most anticipated answer.  But what I actually say is the most dreaded answer I lawyer can offer, it depends.

When to update a will is fact dependent more than time dependent.  Take my life for example:

  • In 2006 I got married, and my name went from a long name to a very long name and my middle name fell away;
  • In 2008 our son was born;
  • In 2009 my father died;
  • In 2010 our daughter was born; and 
  • In 2014 my mother died.
All of those events mark a time when estate plans should have been reviewed and updated to reflect name changes, additions to the family, as well as exits from the family.  And it was not just my husband and I who should have reviewed our papers, it was our parents as well.   Spouses passed on, grandchildren were born, names changed, etc.

If you are wondering if it is time to update your will, ask yourself:
  • Have I moved states?
  • Did anyone key to my plan get married, die or have a child?
  • Are the people named in my will still apart of my life, or have we become estranged for some reason?
  • Has someone new entered my life who was not there the last time I considered my will.
Remember, a blog is educational rather than legal advice. Please consult with an attorney licensed in your state for assistance specific to your need.  And thank you for reading!