On the Radio - Joy Cardin and WPR

This morning I had the privilege of answering questions on WPR's Joy Cardin show. The topic, illness, death and taxes. We covered a wide range of topics: powers of attorneys, trusts, planning for pets, and the role of a personal representative. As a daily listener of WPR, this was a great way to end the year. You can listen to the segment here.

Morgues See Increase in Number of Unclaimed Bodies

Recently the WSJ ran an article, Area Morgues Face Increase in Unclaimed Bodies, detailing the increase in the number of unclaimed bodies stored at county morgues. Likely a product of the economy, some families choose not to claim a body and thus avoid the cost of a funeral. Also, in many situations the body is identified, but the county cannot find the relatives -- especially for immigrants with family outside of the country. Reading the article underscored a message I routinely tell my clients, being organized is key to a good estate plan.

One document you can complete to make sure your burial wishes are followed (in Wisconsin) is the Authorization for Final Disposition. It is on-line, and is free.

Tax Plan Clears the Senate

Today the US Senate voted in favor of the proposed tax plan. If approved by the House later this week, and then signed into law by the President, we will have some guidance on the estate tax.....at least for the next 2 years. As reported in the New York Times:

And it would set new estate tax parameters, including an exemption of $5 million per person, or $10 million per couple, and a maximum rate of 35 percent. All these provisions would last for two years.

It is important to note that this is the plan for the next TWO years, which does not make long term planning an easy thing to accomplish. This continues to be a developing issue that should be monitored.

Movement on the Federal Estate Tax

Word out of Washington, D.C. tonight points to a deal on the Bush Era tax cuts, and finally resolution on the federal estate tax. If the proposed plan is signed into law, were are looking at a federal exemption of $5 million per person ( of $10 million per couple). Any amount in excess of the exemption would be taxed at 35%. This is a proposal and not yet law...keep monitoring for more information.

Lame Duck Congress and the Estate Tax

With the election behind us, the current "lame duck" Congress has the opportunity to move on unresolved tax issues, specifically, the federal estate tax. As the law currently stands, the tax will return (there is no federal estate tax in 2010) January 1, 2011, and will apply to estates over $1 million. Here is a NY Times article that does a nice job of summarizing the three options Congress could take on the estate tax:

Consider three courses that Congress might take:

1. Do nothing and go back to the 2001 exemption and rates.
2. Make the 2009 rates and exemption permanent, an approach that the Obama administration favors.
3. Make the 2010 rules permanent, thereby eliminating the estate tax, as the Republican leadership would like to do.

Now Offering Office Space

Beginning November 15th, I will now be offering clients meetings in my new office space. Located at 612 W. Main Street, Suite 302 in Madison, the central location will be ideal for those wanting to get a meeting quickly. I will still offer home visits for those clients who request them, however, I will now charge a small travel fee (the federal mileage rate, not to exceed $25 per visit). Watch for more details. I am also hiring an administrative assistant, which will give me more time for business development, including blogging.

Inheriting the Family Gun

As fall settles into Wisconsin, I am reminded that hunting season is not far off. In this State, and across the country, hunting is a family tradition. And, more often than not, inheriting a family gun is an element of estate planning. This article recently came to my attention, and underscores the importance of properly planning an estate; most people would not think that bequeathing a family gun might violated federal or state laws related to firearms!

Grief Workshop

I came across a local workshop that may be of interest to those working through or working with those in grief.

Grief Workshop

Doug Smith will present a workshop entitled "Different Ways of Grieving, Different Ways of Healing" On Saturday, October 2 from 8:30 a.m. until noon. This workshop explores how we all respond differently to losses (our cognitive and emotional differences) and share different types of tools that can be used with those needing care and attention. If you are interested in attending, please contact Jeanne Sears, Coordinator of Member Programs, jeannes@fusmadison.org by Tuesday, September 28.

Fall Seminars

Once again Fall is upon us, and I will be speaking at a variety of venues this season. For more details, visit my web site at www.gustafsonlegal.com.

Unlicensed Hospice Provider in Wisconsin

This past week I read an article stating that St. Jude Hospice (not affiliated with the hospital), a for-profit hospice company based in Iowa, was notified by the Wisconsin Department of Health Services to stop stating on its website that is serves the Madison area. Currently, St. Jude does not have a conditional license to operate in Wisconsin.

The Wisconsin Department of Health Services has notified St. Jude Hospice that it cannot say it has a hospice or is operating a hospice in a particular county until it actually has a probationary Wisconsin license, department spokeswoman Stephanie Smiley said Friday.

Green Cemetery in Verona, WI

Earlier on this blog I wrote about plans to create a green cemetery in Verona, Wisconsin. The plan continues to move forward, and is now working its way through zoning committees, etc. The Capital Times ran a very nice piece on the cemetery and the family behind it. The tag line read "will casket-free, green cemeteries be the next big thing?" -- cathcy!

Wisconsin's New Power of Attorney for Finance

Wisconsin's new power of attorney for finance form offered by DHS is now available on-line. The new form will be effective starting September 1, 2010. As a reminder, it is wise to consult with an attorney about your specific situation.

Palliative Care Found to Extend Life

The NY Times ran an article describing a study that found patients who were given palliative care had a longer life.

In a study that sheds new light on the effects of end-of-life care, doctors have found that patients with terminal lung cancer who began receiving palliative care immediately upon diagnosis not only were happier, more mobile and in less pain as the end neared — but they also lived nearly three months longer.

When Student Loans Outlive the Student

The Wall Street Journal recently ran a story about private student loans -- unlike government loans, money borrowed by a student through a private lender are usually NOT forgiven upon the student's death. The story focuses on Christopher Bryski, who died two years after falling from a tree and entering a coma. His story offers two important lessons:

• private student loans are not forgiven upon death, and a co-signor will likely be held responsible for payment; and
• the fact that anyone over age 18 is a legal stranger in terms of finances -- just trying to cancel his credit cards after his fall was difficult for his parents to accomplish. Having a power of attorney for finance in place, by which he names a parent or sibling to act if he cannot, would have reduced some of the family's red tape and stress.

As students return to campuses it would be wise for everyone involved to know the terms of any private student loan agreement, and to establish powers of attorney for the state in which the student will be residing.

Domestic Partnerships in Wisconsin

Wisconsin Public Radio ran a short story on the number of couples who have actually registered a domestic partnership. The story offered two points that I wanted to share. One, the recent law that was passed was a state law, and does not offer FEDERAL benefits to domestic partners. And two, for the law to give protections, the couples must register. I was surprised by the number of couples that have registered -- to me, it seemed low. To listen to the story, click here.

More than 1,500 same sex couples have registered as domestic partners in Wisconsin since it became law a year ago. Laura Podgornik reports from Superior.

Resmomation

Heard this story on Market Place earlier this week on a new process called resomomation -- an alternative to green burial. Click here for a link to the radio story.

Six U.S. states have approved of a new, low-carbon way to dispose of human remains called resmomation. It involves reducing the body to a mixture of liquid and minerals. A group of funeral directors in a northern Belgian province wants Belgium to take the lead and adopt the new approach.

Maternity Leave

Hello! I wanted to alert my readers to the fact that my maternity leave began a bit earlier than expected. Our daughter was born the evening of July 29th, just 24 hours after I held my last scheduled client meeting ... and 3.5 weeks ahead of her due date. Thankfully, all are healthy and doing well. For the next 6 weeks I will be working less, but will still attempt to post to my blog when time permits. Thanks for reading!

NPR Covers Caregiver Discrimination

Mentioned during a church service yesterday, I became aware of an NPR story that ran earlier this summer about caregiver discrimination. While the focus is on working parents, the concept covers adult children caring for ill parents or spouses. As our nation ages, this will become a growing concern.

Steinbrenner Estate Likely to Avoid Federal Estate Tax

In yet another high profile death of the ultra-rich, the recent passing of George Steinbrenner underscores the current law that there is no federal estate tax on 2010, as reported in the Washington Post.

Members of Congress keep introducing new legislation, but so far, nothing has advanced to become law.

Congress set the estate tax to disappear in 2010 and be, pardon the phrase, brought back to life in 2011. No one expected this throw-Mama-from-the-train scenario to actually play out in 2010, but Congress has been unable to agree on a reasonable level for a new estate tax.

Keep watching, and maybe soon we'll have a resolution to this issue. Until then, 2010 is proving to be a windfall year for heirs of the ultra rich.

Death and Facebook

The New York Times recently ran an article about the difficulty Facebook is having preventing its site from prompting users to get back in touch with an old friend....one who has died. It is possible to convert a page to a tribute page, with sufficient proof of death, but it is not widely known about or used. Yet one more thing for a Personal Representative to think about when handling an estate.

Wisconsin's New Power of Attorney for Finance

The Wisconsin Legislature recently passed legislation that will bring changes to Wisconsin's power of attorney for finance law. A nice summary of the law, and its impact, can be found in the June edition of the Wisconsin Lawyer Magazine.

Don't Forget Your Digital Life When Planning

More and more of my clients are receiving and or paying bills on-line. It is a great way to reduce paper use and be more efficient, however, you want to make sure you leave some sort of paper trail for loved ones in the event of your illness or death. Why? Well, in order for bills to be paid, the person paying them needs to know about them. If you receive a monthly email invoice for the credit card, remember, no one else will know about it if you are in the hospital or deceased. A simple solution is to keep a list of what bills you receive on-line and from what institution. Keep the list with your will and powers of attorney. It will give those in charge a good place to start when they assume responsibility for your financial affairs.

Wisconsin Supreme Court Says "Estates are Responsible for Taxes"

The Wisconsin State Supreme court has just ruled that estates, not heirs, are responsible for paying state and federal estate taxes. Channel 3000 offers I nice summary of the case.

Quite often I have clients who are surprised to learn that life insurance is included in a determination of whether the estate tax is owed. A common response is "my agent told me this money would be tax free". That is true, partially. Life insurance is not taxable from the income tax perspective of the beneficiary. However, IT IS included in the determination of whether an estate is subject to the federal estate tax.

In Lieu of Flowers

Often I have clients who want to have family members, upon his or her death, select a charity for donation. While this is difficult to capture in a will, a simple solution I offer to clients is to have the family select a charity "in lieu of flowers". And, if you have one or two in mind, you could share that with your family, but always reserve the right to change your mind. Sadly, this is an important thing to think about in advance, as I learned with the death of my father last fall.

We covered lots of decisions, but we failed to give consideration to selecting a charity to receive donations in lieu of flowers. Only after the obituary ran did I think, oh, we should have named the Dane County Humane Society. We did donate monies received to the organization, but I wish we would have thought of this earlier.

Book Recommendation: New Times, New Challenges

I received an updated copy of a book I reviewed for the Wisconsin Lawyer Magazine, now titled, New Times, New Challenges: Law and Advice for Savy Seniors and Their Families. In my book review, I recommended the book for all lawyers who serve the boomer population, but I'd also say it would be a useful reference for other professions serving seniors or for families assisting older relatives. Short chapters, concise writing, and humor sprinkled in make for an easy and enlightening read. Enjoy.

National Health Care Decision Day

April 16th has been declared National Health Care Decision Day, and the Wisconsin State Bar is aiming to help citizens complete these vital documents. Visit the Wisconsin State Bar website to learn more, and access downloadable forms in English and Spanish.

NPR Coverage of Obama Order: Same-sex Couple Vistitation

For those wanting to hear more about President Obama's Executive Order, by which all hospitals that accept Medicaid and Medicare, have to allow same-sex couples visitation rights, here is the NPR news story.

Enhancement of Right for Non-Relatives Visiting the Sick

Yesterday the Obama Administration issued an executive order, directing his Secretary of Health to develop administrative rules granting same-sex couples visitation rights in the hospital. The order would also extend this right to widows/widowers who have no children and rely on friends and religious organizations for care and support. There is no immediate effect of the order, as it will take time for the agency to develop and write rules. The NY Times reported that White House spokesman, Shin Inouye, said Thursday night:

“By taking these steps, we can better protect the interests and needs of patients that are gay or lesbian, widows and widowers with no children, members of religious orders, or others for whom their loved ones are not always immediate relatives. Because all Americans should be able to have loved ones there for them in their time of need.”

While this is being promoted as a LGBT victory, as an attorney, I see may heterosexual couples who are together, but not married. Based on news reports, it appears that they would benefit from this order as well.

However, I would still advise any client over the age of 18 to complete a power of attorney for health care, a living will, and a power of attorney for finance, whereby they nominate which people they want making health and financial decisions in the event of their incapacitation. Even married couples need to take these measures. The more paperwork you have completed, the easier the access should be in a time of need.

Profile: Palliative Care Doctor Struggles with Death

The NY Times ran a very touching article, profiling the work, life and death of Dr. Desiree Pardi. The article helps one understand the role of palliative care in our Nation's health system, and pays tribute to a wonderful doctor.

On-line Registration for Organ Donation in Wisconsin

Wisconsin residents have a new way to consent to organ donation -- on-line registration. Sign up consists of entering your name and drivers license number. Channel300's web site states:

Offering online registration instead of just when receiving a driver's license is expected to increase the number of donors. Already more than half of Wisconsin's population has signed up to donate organs.

The new web site, www.yesiwillwisconsin.com, will be promoted next week by First Lady, Jessica Doyle.

Do You Need A Living Trust?

A few weeks ago I came across a full page ad in our local paper promoting a seminar on living trusts. Reading it, I started shaking my head in disagreement. Many of my clients and seminar attendees think that a trust is what they need. When I probe and ask why, they can't really give a good answer, it is "just something I've heard". Why have they heard this -- the skeptic in me says "because living trusts are lucrative for the people who draft them". In my practice, very few clients need a living revocable trust.

The ad criticizes wills because

• attorneys are needed, well attorneys are needed in the creation an often the administration of trusts;
• expensive probate fees. In Wisconsin, the probate fee is .02 percent, or $2 for every $1,000 in probate assets. Often times the probate fee is less than the cost of creating and funding a trust;
• totally public and court controlled. In some cases, this is advantageous. When a trust is involved, there is no court oversight to ensure that beneficiaries receive the proper distribution -- what if the named trustee opts to not send a check to the non-profit listed -- I've heard of this happening.

Living Trusts do have there place. Here are a few situations when I feel a client should consider a living trust:

• a desire to keep finances private; ideal for blended families or business owners;
• when property is owned in multiple states AND no other non-probate options are available, such as Transfer on Death Deeds; and
  
• when there is a desire for an asset to be held in trust, managed by a trustee, for a long-term basis (i.e. 5 years or more).

Remember, living revocable trusts will not minimize your estate taxes or preserve assets if you need long-term care.

Transforming a probate asset into a non-probate asset can be achieved by multiple instruments, most of which are less expensive than a living revocable trust. Be certain to consider all of your options -- and ask for a cost benefit analysis to ensure that you are in fact saving money if that is your primary goal.

Scattering of Ashes

My father, upon is death, was part of a new American trend....opting for cremation over burial.

Before about 1980, just 4% of families were choosing cremation over burial. Now, 39% select cremation, and in the next 15 years, the percentage is expected to approach 60%, according to the Cremation Association of North America. The increase is being driven in part by cremation's cheaper cost, and in part by the fact that fewer extended families are rooted in one specific place anymore—which means they don't live close enough to visit a loved one's

My father did not opt for "wild cat scattering" a term used to describe the scattering of ashes in nature / society, instead, his rest in a plot in a family cemetery. However, routinely clients inquire about the ability to scatter a loved ones ashes. Here is a nice article, summarizing the concept and offering creative inspiration.

Transfer on Death Deeds and Avoiding Probate

For whatever reason, many clients wish to minimize or avoid probate. In the past a living revocable trust was utilized to accomplish this goal. However, this dated, and often expensive device can be replaced if the bulk of an estate is held in a home. Several years ago Wisconsin adopted the Transfer of Death Deed. And I recently came across a wonderfully concise description:

A TOD Deed allows the owner of real property to execute a deed that names a beneficiary who will succeed to ownership at the owner's death. Because the TOD Deed creates no rights in the beneficiary until the owner dies, the owner can change his or her mind during life, and the beneficiary's creditors cannot attach the beneficiary's interest in the property during the owner's life. The recordation of the TOD Deed also does not create a completed gift for gift tax purposes because no transfer of ownership takes place until the owner dies.

From, Death Without Probate: TOD Deeds--The Latest Tool in the Toolbox, Prob. & Prop., March-April 2010, at 13.

One limitation of the TOD Deed -- it cannot be used with a class of people, i.e. "I leave my property to my children". Instead, actual names must be listed. Practically, this works best when only one person stands to inherit. Which leads to a second limitation, there is no room for contingency planning. While not perfect, it is a simple, and cost-effect alternative to the living revocable trust.

As always, it is best to consult with a lawyer specializing in estate planning and probate before acting.

Tax Time, Probates, and Personal Representatives

It's that time of year again, tax season. This year I am lending a hand to my mother, who is still grieving from my father's death last fall. Having a daughter who is also and estate planning attorney has been a great source of comfort for her. And a learning opportunity for me. And today I received an important reminder about death and taxes.

Going through her tax forms, I came across a 1099-INT for a bank and account that we did not know my father had an account with. Since his estate was completely non-probate, no probate was open. That is nice, because now we don't have to make any changes to an inventory. Lesson learned -- personal representatives should carefully review all 1099's coming in the name of the decedent. They just may uncover an asset that you did not find initially.

Interest Grows in Green Burials

Here is a quick USA Today article on green burials, which are growing in popularity.

A growing number of funeral directors are looking to add green services, says James Olson, spokesman for the National Funeral Directors Association. The Green Burial Council lists nearly 300 funeral homes that provide eco-friendly options, up from a dozen at the beginning of 2008, Sehee says.

Using a Disclaimer to Fund Spousal Trust

Routinely I have used a disclaimer to fund spousal trusts, and here is a great NY Times article on that very topic. Saying 'no thanks' to an Inheritance" does a very nice job of explaining the state of the estate tax and how a disclaimer trust works as well as its obstacles.

Story Highlights Probate Traits

This news story -- which is a tragic account of a 13 year-old boy who shot and killed his father, and now stands to inherit under his father's will -- illustrates two important aspects of the probate process.

• a will, once filed with the probate court, becomes a public record for anyone to read. This fact is one reason why a person may choose to create a trust instead of a will; a trust creates non-probate assets, avoiding probate.
• probate estates under $50K avoid probate. However, it does not take much to reach $50k....often owning a home will meet the threshold.
  

Gift Taxes in 2010

It seems that the gift tax exclusion for 2010 will remain the same, $13,000 per person, per year. For more details, check out the IRS publication.