Wednesday, December 31, 2008

Estate Planning Seminars

I have posted my 2009 estate planning seminar schedule on my firm's web site. Topics that will be covered include doing your own will, wills and other important documents, and charitable giving. I am certain to add more presentations as the year passes, so be sure to check back if a day/time does not work with your schedule.

And, if you have an idea of a seminar or your organization is looking for a speaker on estate planning, please let me know.

Happy New Year!

Friday, December 26, 2008

Tax Changes in 2009

January 1st, 2009, brings two important changes to the tax arena surround estate planning:

  • First, the annual gift exclusion will increase from $12,000 to $13,000 per person per year. This means that an individual can give any one person a gift without triggering the gift tax if it is $13,000 or less in 2009. Of course, there are always exceptions to the rules. Ask a tax accountant or lawyer for advice on your specific situation.
  • Second, the applicable exclusion amount will increase from $2 million to $3.5 million per estate. This means that if a person dies and his or her estate's net worth (assets minus liabilities) is BELOW the exemtion no FEDERAL estate tax is owed. It is essential that surviving family and friends seek counsel a probate attorney to determine if the tax is owed; often times families will overlook assets that should be included in the calculation, such as life insurance proceeds.
Best wishes for 2009!

Tuesday, December 23, 2008

Odd News Story - Buried With a Cell Phone

Sometimes it is nice to post a blurb that is on the humorous side, which is not all that easy to do when you write about illness, death, and taxes. But I came across this article on trends with burials.....more people are choosing to be buried with their cell phones. From an anthropological view point it is not odd for people to be buried with mementos. The headline just caught my attention.

As I've blogged about before, if you have specific burial wishes it is recommended that you coordinate with friends and loved ones now. In Wisconsin you can complete an Authorization For Final Disposition form where you nominate someone to be in charge of your funeral and you can leave specific instructions.

Book: Alive and Kicking: Legal Advice for Boomers!

With short, concise chapters on a variety of issues, Alive and Kicking: Legal Advice for Boomers By Kenney F. Hegland & Robert B. Fleming (Durham, NC: Carolina Academic Press, 2007) is worth a read for anyone who works with Baby Boomers or is a Boomer themselves. Chapters address issues ranging from estate planning to identity theft to Social Security to divorce and remarriage. Written for boomers, instead of attorneys, the book offers straightforward insight into the issues faced as people age.

My complete review of the book can be read in The Wisconsin Lawyer, a magazine published by the State Bar of Wisconsin.

Monday, December 22, 2008

Rating Nursing Homes

The WSJ reported last week that the Federal government has designed a system to rate the nation's nursing homes through the Centers for Medicare & Medicaid Services (CMS). The system gives an overall rating as well as on health inspections, staffing, and quality measures. According to the article, the nursing home industry asserts that the system is too simplistic. One thing the nursing home industry and the government do agree on is that it is best for families to make in-person visits and do their homework before selecting a facility.

Friday, December 19, 2008

Being Charitable with an IRA

As the end of the year approaches, many people may be considering charitable donations. If you are 70.5 years old, or manage the finances of someone that age, you may want to read more about donation options. The Financial Rescue Package passed by Congress in October 2008 (known as Public Law 110-343) included a two-year extension of an IRA rollover provision, which means taxpayers may transfer gifts directly from their IRA to a charity – without including it as income and without paying taxes on the total amount of the gifts. A nice summary is posted on this United Way web site.

As always, it is best to consult your tax or legal counsel before taking any action. This post is not intended to serve as legal advice, it is a commentary on news related to estate planning.

Tuesday, December 16, 2008

Keeping the Farm a Farm

If your family owns a piece of land that you hope remains untouched in the future, take some inspiration from Ben Logan's recent decision to place "Seldom Seen Farm" into a conservancy agreement with the Mississippi Valley Conservancy. The farm, which was at the heart of his book "The Land Remembers" is described as a Wisconsin jewel, and now will remain so forever. The Wisconsin State Journal ran a niece story on the agreement in today's paper.

Sunday, December 14, 2008

Possible Changes to Wisconsin's Power of Attorney for Finance

The front page of the Wisconsin State Journal ran a somber story on its front page about elder abuse; reports of elder abuse rose to all-time highs in Wisconsin last year. Cases of both self-neglect and financial abuse have risen steadily. Along with the increase in report abuses comes a movement from elder advocates for improvement to Wisconsin's power of attorney for finance. The article mentions that in the next legislative session advocates hope to protect the elderly from financial exploitation.

What, if any, implications this may have for people with existing powers of attorney is unknown. I'll post updates as the legislation advances.

Tuesday, December 9, 2008

Charitable Giving in 2008

As the end of 2008 approaches people may be considering making charitable contributions. If you are considering making a charitable gift, but are a little uncertain about how to go about it, I recommend reading the 10 Tips at Network For Good's web site.

And it might be wise to take a look at the American Bar Association's web site, which has some nice tax tips to keep in mind. And as the site points out, it is also advisable to contact your tax professional when you have questions or are unclear on IRS rules.

Monday, December 1, 2008

Return of the Wisconsin Estate Tax???

The front page of the WSJ yesterday ran a story about how the State may fill the $5.4 billion deficit. And the return of the Wisconsin estate tax is mentioned, along with a sales tax on funerals. I will post updates as this issue works its way through the Legislature.

Tuesday, November 25, 2008

Holiday Gathering

As the holiday season approaches many people find themselves spending an increased amount of time with their loved ones. Maybe you are spending a week in the home you were raised in or your parents are flying in to spend the holiday with you and your family. During these extended visits you may notice changes in your parents’ health that you had not noticed before. If so, it is likely that you’ll have questions about whether they have completed any estate planning documents. Broaching the topic of money, illness, and death is never an easy one, but is important. One idea I offer to clients of mine who struggle with how to raise this issue is to share a news article or story with them; you can start taking about the general topic and move into specifics if the conversation goes well. For more ideas on talking with your aging parents about estate planning, take a look at AARP’s web site -- they offer five moves to make the conversation a bit easier.

Have a happy, healthy and safe holiday.

Monday, November 24, 2008

Unconventional Use of a Harley Davidson

I read an interesting story about a women who had some of her last husband's ashes painted on to his Harley Davidson motorcycle. Do you have specific wishes about your funeral or burial? If so, remember that Wisconsin now has a legal form that you can complete that allows you to designate a specific person to carry out your funeral wishes. And if they are unconventional (and you live in Wisconsin), you might want to complete the form to make sure other loved ones understand that this is really what you wanted to happen. The Authorization for Final Disposition form is located on the Department of Health Services web site.

Friday, November 21, 2008

A Twist on Holiday Gift Giving

Yesterday a new client called to put herself on my calendar, and then she asked something I had not yet heard in my practice...could she give my legal services to her sister as a holiday gift? Apparently both women had attended a seminar of mine and wanted to work with me. So, for a holiday gift my client is giving her sister a “gift certificate” towards an estate plan. This unique gift has an underlying principle not that uncommon in the legal field – someone else paying for a person’s legal representation. One important fact I had to educate the client on was that even though she was paying the bill, her sister would be my client. That means attorney client privilege would prevent me from disclosing any information to the sister paying the bill. My client understood and was thrilled to have finished her holiday shopping without having to make a trip to the mall.

Wednesday, November 19, 2008

Pet Trusts Continued...

This evening I spoke to the Waunakee Lions club about general estate planning concepts. Afterward the presentation a gentleman asked a great question, one I have not been asked before. “What happens to the assets in a pet trust once the pet dies?” Great question. And the answer is, it depends. The money would be distributed according to how the grantors, the people who created the trust, specified. Most of my clients leave any unused funds to the pet’s caretaker. Another option would be to leave unused funds to an animal rescue organization or similar non-profit.

Friday, November 7, 2008

Paying for the Funeral

Recently, I made a post about a new form in Wisconsin that allows a person to designate someone to act as his or her representative for funeral and burial arrangements. In addition to thinking about who should act for you and what type of funeral or memorial service you may want, it is also a good idea to think about how it will be paid for. Over the past few days there has been a lot of discussion on the Elderlaw listserve about funeral homes requiring a loved one to sign personally for the costs of the funeral instead of waiting an billing the deceased's estate. For people low on cash or with poor credit, this can cause a crisis. Here are a few ideas for making sure your final arrangements are covered:
  • complete a POD (pay on death) card for a checking or savings account, payable to the person making your arrangements;
  • list the person making your arrangements on your life insurance;
  • work with a funeral home that agrees to bill your estate;
  • pre-pay for a funeral.

Tuesday, October 28, 2008

Inspirational Author - Forrest Church

Sadly, some people take on the task of estate planning following the diagnosis of a terminal illness. For some, reading about another person’s similar journey may bring a sense of comfort during this process. One such book was recently featured on NPR’s Fresh Air. Love & Death: My Journey
through the Valley of the Shadow by the Reverend Forrest Church offers readers a meditation on the end of life. As a member of Madison’s First Unitarian Society, this story caught my attention because Rev. Church is Minister of Public Theology for the Unitarian Church of All Souls in New York City. A link to the radio broadcast is available off of NPR’s web site.

Thursday, October 23, 2008

National Estate Planning Week

October 20 - 26th is National Estate Planning Week. All too often I hear people say, "I'm not a Kennedy, I do not need an estate plan!" Nothing could be farther from the truth. As I've said over and over at estate planning seminars, everyone over age 18 should take the time to complete estate planning documents. The reason, one word, control. If you don't take the time to state your wishes you are leaving decisions open for a government official or court to decide. Take control and complete some basic forms. To me estate planning is 3 things: planning for illness, death and taxes. ...none of which anyone can avoid. Learn more about National Estate Planning Week at

Tuesday, October 14, 2008

House Deeds and Children

In the past week I have had two clients ask me if they should add their child to the deed to their home so that they’ll inherit it when they die. Of course, the answer is it depends. But here are a few points I told them to consider when evaluating the option.

First, if they already have a will or a trust ownership of the home will transfer according to the terms of the will or trust. In both cases the client’s wills gave the property to the children.

Second, adding a child to a home’s deed equates to giving the child(ren) a gift. If the gift is worth $12,000 or more, then the parent will be responsible for a gift tax.

Third, in Wisconsin a transfer fee would be owed to the Department of Revenue at the time the child(ren) was added to the deed.

And forth, gifting property transfers the parent’s cost basis to the child. If the property were inherited by the child the child would receive a step-up in cost basis, most likely minimizing future capital gains taxes the child would own if the property were sold after they took ownership.

After considering these points, neither client opted to add their child to the deed to their home. Curious as to why this question was coming up (after the will had already been done), both indicated that the idea had been posed to them by a title company. My guess is that in the slowing real estate market some companies are looking to drum up business. And if they are trying to push you into something, they are likely selling something you don’t need. As always, seek counsel from a neutral party before taking action.

Sunday, October 5, 2008

How Does a Divorce Impact A Will?

Under Wisconsin law, all provisions in a will that favor a former spouse or a former spouse’s relatives are automatically and fully revoked. However, it is still advisable to seek legal counsel following a divorce because a will only controls distribution of probate property. If you own non-probate property (property that has a completed beneficiary form), the beneficiary form controls distribution of the property, not the will.

Also, following a divorce it would be wise to update your powers of attorney for health care and or finance to reflect who should be making decisions if you are unable to.

Monday, September 22, 2008

Safe Keeping of Documents

Once you’ve taken the time to complete your estate planning documents, it is important to keep the papers safe and secure. In Wisconsin a copy of a will is not considered a will, and is generally not accepted by the Register in Probate. That means that the original must be safely stored and available when needed. Several options are available for storage, each with pros and cons:

Safe-deposit box: While safe from destruction (by a fire) or tampering, safe-deposit boxes do generate a yearly fee (generally $35 or more). Also, the will is not readily available for quick changes. Most banks should allow a family member to access the box to search for a will, however, this may not always go as smoothly as planned.

Register in Probate: Wisconsin law allows a person to deposit a will with the register in probate in the county where he or she lives. Depending on county practice, there may be a service charge for the service. Drawbacks to this method are that the will is not readily available for changes, and the person may forget to take the will with them if he or she moves in the future.

Fiduciary’s safe: A trust company serving or nominated to serve under the will may offer its safe for storage. However, many people do not have a fiduciary entity named in the will, so this is not a common option.

Home Safe or Strongbox: Far more affordable and easy to access, home safes and strongboxes are a good option for most people. However, they do not guarantee safety from fire or tampering.

Retention by attorney: While a common practice in the past, the State Bar of Wisconsin does not promote drafting attorneys keeping client documents in the firm safe. Safe keeping by the attorney creates the impression that the attorney is seeking to preserve future representation for either updating the will or conducting the probate.

Wednesday, September 10, 2008

Renting Fact

One question that has come up several times in the past few months is – do we have to keep paying the rent for someone who has passed away? The answer is yes. Under Wisconsin law, the lease remains in effect even though the tenant has died. If rent is not paid, the landlord can seek payment through the probate practice.

If you are presented with this situation because you are helping taking care of a loved one’s final affairs, keep in mind the following:

  • Contact the landlord about the death immediately;
  • Request a copy of the lease;
  • Begin coordinating emptying and cleaning the premises;
  • Discuss ways to find a new tenant for the unit, hopefully ending the lease.

Monday, September 1, 2008

Can I Change My Will?

If you already have a will in place but wish to make changes, it is possible to amend or change the will without having to draft an entirely new document. A codicil is a basically a supplement to an existing will. It states that the underlying will should remain intact except for certain changes.

If the proposed changes are complex or involve removing beneficiaries, a codicil may not be appropriate and a new will should be drafted. A codicil is useful in the following circumstances:

  • Updating the name of a beneficiary, personal representative, guardian, and or trustee;
  • Changing the person named as the personal representative, guardian, and or trustee;
  • Adding a beneficiary; or
  • Making other minor changes within the document.

Since a codicil is a supplement to an existing will, it must be executed in the same manner as the will. This means changes should not be scribbled on the will, but rather drafted, signed, dated, and witnessed in the same fashion as the will.

Monday, August 25, 2008

College Prep!

A recent post discussed the importance of having a power of attorney for finance in place in regards to dementia. On the flip-side, many families overlook the importance of powers of attorney for their college aged children.

Once a child turns 18 he or she can vote, marry, or sign up for the army – and they also become a legal stranger in many ways. No longer may you as the parent be able to access their grades at school, and in some states, you will not be able to make health care and or financial decisions for them without a court order.

As you help your child pack and prepare for college, you should also take some time to learn about the requirements for powers of attorney in the state where your child will be a student. And encourage your child to take the time to complete some basic paperwork nominating who in the family should take charge if an unlikely accident or illness occurs.

Friday, August 15, 2008

Dementia and Investing

The September 2008 edition of Smart Money Magazine offers an article entitled Vanishing Legacy, which discusses the implications dementia may have on a person’s investments. While dementia is commonly associated with mood swings, memory loss, and confusion, another side effect that is not as readily recognized is a sudden inability to make sound financial decisions.

One family profiled ended up with the daughter going to court, fighting for several years to prove her mother’s incapacity and seeking guardianship over her mother’s finances. While eventually granted, the older women lost approximately $1 million of her life savings due to risky investments. The article emphasizes that brokers, unlike financial advisors, are not held to a suitability standard when working with clients.

Never knowing when dementia may or may not strike (one person profiled had early onset Alzheimer’s disease at age 48), it may be wise for people to complete powers of attorney for finance. These forms allow for a loved one or trusted advisor to take over financial responsibility if the person becomes incapacitated. While incapacitation needs to be proved, the process is more efficient than a court room fight for guardianship. Since a power of attorney needs to be completed by a competent individual, it is best to take action while you are healthy….don’t wait until red flags begin to emerge.

Monday, August 11, 2008

What is the "death tax"?

The “death tax” or estate tax as it is more appropriately called, has been apart of American society since 1916, when the federal government began taxing estates in order to prevent the concentration of wealth within families. The tax is levied on estates that exceed a certain value. It is important to note that there is the federal estate tax, and in some instances there is a state estate tax as well (Wisconsin’s estate tax ended on 12-31-07, however, it may return in the future).

Technically, the tax is assessed on an estate upon death if the estate’s value exceeds a certain threshold. As a result, the estate will pay the tax, reducing the amount your heirs inherit. However, not every estate pays the tax. If your estate is below a certain amount, it is considered “exempt”, and no tax is owed. In 2001 Congress passed a law causing the exemption amount to change over time: in 2003 the exemption amount was $1 million, it increased to $1.5 million in 2004 and 2005, and increased again in 2006 through 2008 to $2 million, in 2009 it will be $3.5 million, then in 2010 there will be no tax, and in 2011 the exemption limit will return at $1 million.

The value of your estate is essentially all of your assets minus your liabilities. However, you must remember to include the value of life insurance you owned as a liability. For many young families, carrying significant life insurance can raise the need to plan for estate taxes. If you find yourself in the area where possible estate taxes may apply, it is wise to speak with an estate planning attorney about tax planning strategies, including: A-B spousal trusts, gifting, and charitable giving.

Friday, August 1, 2008

Right to Die

News out of Italy once again aims a spotlight on how a person can express his or her feelings about being kept alive if they fall into a vegetative state. Just like Terry Shivao’s case, this young women appears not have had the appropriate paperwork in place.

In Wisconsin, a person can complete a “living will” otherwise called a “declaration to physician” indicating his or her preferences about feeding tubes and other means of artificially prolonging life. Without such a document, the stage is set for disagreement and court fights.

Estate planning is about making sure your wishes are followed. By completing a “living will”, you can assume control of the situation, speaking through paperwork even when you are not able to verbally communicate. As this story, and too many others illustrate, no one is ever too young to ignore this important issue. Take control, and let your wishes be known.

Tuesday, July 29, 2008

Pay-on-Death Accounts

A recent comment posted to my piece on understanding probate asked if Pay-on-Death cards should be used to avoid probate. The answer, in keeping with legal tradition, is that it depends on the situation.

Pay-on-Death (POD) or Transfer-on-Death (TOD) cards are types of a beneficiary forms, that when complete, make an asset non-probate. A POD is usually associated with banking accounts (savings, checking, money market), and a TOD generally accompanies a brokerage account. Upon the account holder’s death the asset will pass immediately to the person(s) listed on the card, avoiding probate. Advantages of PODs and TODs include an immediate transfer, whereas probate may take 12 to 18 months or longer. Also, by avoiding a probate transfer, the recipient is not responsible for the probate fee.

Two points of caution. First, a POD or TOD card may not provide ample room for contingent beneficiaries. And second, it is wise to have some assets remain under probate because money will be needed to pay final bills, taxes, and administrative fees. Funds left in your probate estate will be accessible by your personal representative to close out final expenses; otherwise your estate may be insolvent.

As always, it is wise to consult with an attorney or other trusted advisor prior to making estate planning decisions – including PODs and TODs.

Monday, July 28, 2008

Understanding Probate

Probate is one of those words that tends to strike a cord of fear in people, however, that does not have to be the case. Through some basic knowledge, the mystery and fear surround the probate process can fall aside, leaving people feeling knowledgeable and empowered.

Blacks Law Dictionary defines probate as the legal process by which the estate of a decedent is administered; generally it involves collecting assets, paying liabilities and taxes, and distributing the remaining property to the heirs. Key points to keep in mind when facing probate are:

  • A will facilitates probate by telling the court how you want your assets and affairs handled upon your death – a will does not avoid probate;
  • Probate applies only to your “probate property” – which is anything you own that does not have a clear designation on it about who should receive it upon your death. Common examples may include your savings account, home, and or car.
  • Probate does not apply to your “non-probate” property – which is anything you own that does have a clear designation on it about who should receive it upon your death – called the beneficiary form or pay on death form or transfer on death form. Common examples include your life insurance and retirement accounts. These assets are passed according to the form, not your will.
  • A fee is assessed by the probate court. In Wisconsin the fee is 0.02 percent of the value of your probate property. Other states fees vary greatly.
  • The person in charge of ushering a decedent’s property through probate is called the Personal Representative.

While probate may take time, and requires a lot of attention to detail and paperwork, it is not unmanageable. And, if you feel it is beyond your comfort level or requires too much of your time, as a persoanl representative you can always hire an attorney to assist you in the process. Generally those fees would be paid with the decedent’s assets, not your own.

Monday, July 21, 2008

Art, Antiques, and Collectibles

Are you a collector? Whether it is contemporary art, 19th century furniture, first edition books, or comics, your collection should be included in your estate plan. To learn more about the issues surrounding planning and maintaining your collection, I’d recommend the book Life is Short, Art is Long: Maximizing Estate Planning Strategies for Collectors of Art, Antiques, and Collectibles by Michael Mendelsohn & Paige Stover Hagu.

Recently I wrote a review of the book for the Wisconsin Lawyer Magazine. Aimed at the collector instead of the estate planning attorney, the book discusses many issues, including heirs removing items before probate is finished, benefits of donating pieces to a museum, and the importance of appraisal.

As a collector, you obviously have a passion for a certain genre. Through a little planning and effort, you can make sure that passion lives on beyond you.

Thursday, July 17, 2008

A Green Cemetary

Going green, a trend that is sweeping America has arrived in Wisconsin in the form of a land trust and green cemetery. This past year I was invited to serve on the Board of Advisors to the non-profit, Trust For Natural Legacies, which aims to preserve land in Wisconsin and have a small portion set aside for green burials. Not only is the concpet earth friendly, but it also offers a lower-cost alternative to pricey funerals.

Wednesday, July 16, 2008

Organization is Key!

Whether your estate planning documents are simple or run for a hundred pages or more, a key element to both is having them organized. As I always say to my clients and seminar attendees – if people can’t find your documents, then it is as though you never completed them. Here are 5 tips on organizing yourself:

One, purchase a three-ring binder and subject dividers. Mark the dividers “will”, “powers of attorney”, “instructions”, “beneficiary forms”, “important people to contact”, etc. Behind each tab place the appropriate documentation.

Two, if you put your will in a safe deposit box make sure you have a copy in your personal papers (that three-ring binder) that is clearly marked “COPY”, and indicates where the original is kept.

Three, make a list of all the bills you pay on-line. Should something happen to you, your personal representative likely will not have access to your email account, making it harder to track down those accounts, close them, and pay them off.

Four, make a list of your financial holdings. Include institution name, type of account, and a contact number. As your assets change over time make sure you update this list. Again, keep this in the binder listed above or in another obvious spot.

Five, tell people where they can find your documents. They do not need to know what they say, just where they can find them if something unexpected happens.

These simple steps can dramatically assist your friends and loved ones during what would be a very difficult time.

Monday, July 14, 2008

Madison Pride Day – July 20th, 2008

Saturday, July 20, 2008, Madison, Wisconsin will recognize Gay Pride Day. The agenda includes an address from Congresswomen Tammy Baldwin, followed by a picnic at Brittingham Park. Whether you yourself are in a same-sex relationship, or have a loved one who is, I encourage you learn more about how estate planning can enhance the relationship.

Since same-sex couple commitments are not legally recognized in the State of Wisconsin, partners live without basic rights and responsibilities. However, by taking action, you can bestow those rights and responsibilities on your partner. For example, you can name him or her as:

  • Your power of attorney for health care (include a HIPPA waiver);
  • Your power of attorney for finance;
  • Your personal representative or trustee;
  • Recipient of probate assets; and
  • As beneficiary on your non-probate assets (life insurance, retirement, etc.).

Tuesday, July 8, 2008

Honor Those Who Give!

Friday, November 7th, the Madison Chapter of the Association of Fundraising Professionals will honor a variety of people and organizations who "have change the world with a giving heart". Nominations will be accepted through July 31st, 2008.

If you know of a situation where a person died and left a modest gift to a charity, which was put to great use, I'd love to hear about it! Currently I am researching and writing a book about charitable giving. The point I'd like to emphasize is that anyone can be charitable -- one need not be a Kennedy or a Rockefeller to make a difference in the world.

Monday, July 7, 2008

Have You Planned For Your Pet?

Are you one of the millions of Americans who have welcomed a pet into your home? If so, you likely lather your four-legged companion with love and affection, and dutifully visit the veterinarian. But have you considered where Fido or Kitty would go to live if you were unable to take care of him or her? Leona Helmsley’s will, leaving $12 million to a pet trust for her dog, has focused the spotlight on the issue of including pets in your estate plan.

Each year, thousands of pets end up in shelters because their owners died without making arrangements for their care. USA Today has a nice, simple article discussing the ins and outs of including your pet in your estate plan. Sure, a $12 million trust might not be the right fit for you, but leaving a letter with a plan for caring for your pet might. And don’t think a pet trust is just for the rich and famous; they can be funded will a small amount of money and may be appropriate if the person you would like to leave your pet with needs some financial assistance (i.e. grooming costs) or if your pet has a long lifespan (a Macaw parrot can live between 50 and 100 years).

Monday, June 30, 2008

Divorce and the Estate Plan

Yahoo Finance featured a story today about the importance of reviewing and updating your beneficiary forms following a divorce – you would not want to unintentionally leave an ex-spouse, or ex-partner, named as a beneficiary! Regardless of what your will says the beneficiary form controls property held in retirement accounts and life insurance policies.

Upon divorce, one would hope that the attorney handling the case would either work with you to update your will or refer you to an attorney who specializes in estate planning. Competent attorneys should alert the client about the need to review and update beneficiary forms at the same time a will is created or updated.

And remember, not just your divorce could impact your estate plan. Have the people you named as guardian for your minor children gone through a divorce or is the marriage experiencing stress, creating a less than ideal home for your child to move to if needed? If so, then amending your will to select another person or family would be a good idea.

Sunday, June 29, 2008

The Emotional Side of Estate Planning

Crafting one’s will commonly tends to be a dispassionate exercise in assigning someone’s name to an asset. Clients focus on the big items: the house, the mutual funds, the bank accounts. While obviously essential to crafting an estate plan, this limited scope is insufficient.

Have you thought about who should have your wedding band, family photo albums, your grandfather's hunting rifle? People often overlook the importance of family momentos, which can mean a lot to younger generations as well as cause disagreements after a loved one is gone. There is also the question of who should have certain responsibilities, such as the personal representative (a.k.a. executor) or guardian of your minor children. Is a family member the right choice? If so, which one? Again, who you select for these roles is important, and can ignite family tensions.

Delving into the emotional side of estate planning is not an easy task, which probably lies at the heart of why so many people avoid it. There is a wonderful book written for the general population that walks a person through the emotional aspects of doing a will.

I routinely recommend Creating the Good Will: The Most Comprehensive Guide to Both the Financial and Emotional Sides of Passing on Your Legacy to clients and seminar attendees.

Thursday, June 26, 2008

Is A Trust Right For You?

Despite being around since 12th Century England, trusts are still very much talked about subjects. Yet, despite their popularity, trusts are not necessarily for everyone. Trust creation is not an easy undertaking. So why are trusts still so popular? A reason I commonly hear from seminar participants and clients is that it helps avoid estate taxes. However, that is not true – most trusts do not help you avoid estate taxes!

The following are key advantages of trusts:
-Avoid probate. A properly funded trust is a non-probate asset, meaning that property held in the trust does not fall under the jurisdiction of the probate court. This means that the assets can be transferred upon death to the beneficiaries, avoiding probate. This saves time and probate fees. When deciding if a trust is for you, always compare what it would cost to transfer your assets through probate versus the cost of creating and funding a trust. Probate is sometimes less expensive.
-Keep matters private. Matters filed with the probate court are public record, open to inspection. Trusts however, are private transactions.
-Control. A trust allows the grantor to write instructions on the use of funds – often limiting them for health, education, and maintenance. Also the role of trustee allows the grantor to assure that the management and spending of the trust is overseen by someone other than the beneficiaries, who often are too young or inexperienced to manage the assets.

Trusts can be time consuming and expensive, but they can also accomplish significant goals. Certain circumstances call for a trust, either Living (created and funded during life) or Testamentary (created upon death via instructions in a will). Those include people who:
-own property in multiple states,
-own substantial real estate,
-would like assets controlled if both parents die; and
-those who have family members with special needs.

If you feel a trust is right for you, seek advice from legal counsel who can advise based on your specific life situation.

Wednesday, June 25, 2008

Electing Cremation in Wisconsin

In March 2008, Wisconsin Governor Jim Doyle signed into law 2007 Wisconsin Act 58 (Assembly Bill 305). Codified in Section 154.30 of the Wisconsin Statutes, the law allows an individual, during life, to appoint a representative to carry-out funeral and disposition arrangements. One important new right under the law is that it allows a person, during life, to indicate his or her desire to be cremated. Until this law passed, this was not an option, often opening the door for a person's loved ones to disregard the deceased's wishes.

Form DPH 0086, Authorization for Disposition, is available on the Department’s web site. The document allows an individual to express special directions concerning religious observances and, making suggestions about arrangements for viewing, memorial services, graveside service, or other last rite rituals.

In a time of increased interest in all things green, and frugal, this law is a wonderful addition to Wisconsin statutes. A person can now secure his or her desire to be burried, or have other funeral wishes followed, in an easy and affordable manner.

Thursday, April 3, 2008

Death and the Gift of Giving

In his most recent book Giving, former President Bill Clinton emphasizes the good that can be done through charitable actions. He ends by saying “there’s a whole world out there that needs you…give”. One way to meet this challenge is to consider creating a planned gift. Contrary to popular opinion, one need not be a Kennedy or Rockefeller to make a planned gift – anyone, even those of modest means, can designate money or property to a cause that is important to them. A planned gift can either be a percentage of your net worth, a specific piece of property, or a specific dollar amount. Additionally, planned giving allows a person to make a gift either during life or at death, creating flexibility if your financial situation is uncertain.

Some types of planned gifts reduce the size of your taxable estate or generate a charitable deduction if made during your lifetime. Beyond possible tax breaks, a planned gift is a way to leave a legacy by supporting and nurturing a cause that you value. There are numerous tools by which a planned gift can be made. Before taking any action, it is advisable for you to consult with your attorney, tax advisor, and/or accountant. Here are a few of the most common instruments:
A Bequest in a Will -- Allows you to name a charitable organization or cause in your will. Please note that it is possible to amend an existing will to include a charitable organization. Here are three examples of possible bequests:
· I leave $1,000 to Charity X.
· I leave 10% of the residue of my estate to Charity Y.
· I leave any automobile I own at the time of my death to Charity Z.

Life Insurance Policy -- You could name a charitable organization as either a primary, secondary, or final beneficiary of a current policy. Or, you could purchase a new policy naming a charity as the beneficiary.

Charitable Remainder Trusts – Allows you to transfer ownership of property you have to the trust. You can be a beneficiary now, and upon your death the remaining balance is paid to the charitable organization. These are commonly used by people who have held mutual funds, stocks, or real estate for a long period of time because of tax planning advantages.

Charitable Gift Annuity – Is a contract between you and a charitable organization. You agree to make a gift to the charity and in return, the charity agrees to make income payments to you for the rest of your life or a set period of time.

Beneficiary of a Retirement Plan – Gives you the option of listing a charitable organization as a beneficiary, either primary, secondary, or tertiary. For example, you may wish to leave 10% to Charity Y.

Many of us have a non-profit, educational institution, or religious community that is dear to our hearts. With a little thought and planning, you have the potential to leave a gift, promoting that organization even after you are gone. Ask yourself, “Can I amend my will to leave ten percent of your assets to your college? Would the library like to receive your books for its book sale fundraisers? Is there a family member whom you would like to create a scholarship in memory of?” Whatever it may be, you’ll discover that planned giving is for everyone, and that it is a gift that keeps on giving.

Saturday, March 22, 2008

The Importance of Nominating a Guardian for Minor Children

Whether you are a new parent or a seasoned professional with teenagers, there is an important question you need to ask yourself – have I nominated a guardian for my child? Having a godparent is not sufficient; the only way to legally nominate a guardian is to complete a will.

A guardian is the person who would be the substitute parent if both you and the other parent die before the child reaches age 18. If you do not nominate a guardian, then the potential exists for various family and friends to seek guardianship over your child, a costly financial and emotional process decided by a judge.

Thinking of someone who will step into your shoes is almost an unbearable thought; many of my clients tear-up when discussing the issue with me. I find that it helps to have some concrete questions to answer:
· Who has a close bond with your child;
· Who is in good health to raise your child;
· Who shares your family’s values in terms of religion and education;
· Who could realistically take on the financial responsibility of raising your child;
· Who lives in an area where you would want your child raised; and
· Who does your child want to live with?

Before nominating a guardian in your will, first you should ask them if they would like to serve as a guardian. Second, I advise all of my clients to leave a letter to the guardian expressing his or her wishes for the child’s upbringing. For example, how much should be spent on holiday and birthday gifts.

Completing or updating your will is the only way to nominate a guardian in Wisconsin. To do this you can either work with an attorney or complete a basic Wisconsin will on your own; forms are available from the Wisconsin Law Library.