Friday, December 21, 2012

Happy Winter Solstice, 2012

Dear Reader,

Today I pause and wish you a happy Winter Solstice.  December 21st marks the longest night, and shortest day of the year.  Starting tomorrow we will begin the journey towards summer, with ever increasing daylight and shortened evenings.

Today also marks the day my husband proposed, asking me to marry him on the Summer Solstice.  It is a warm and tender day in my heart, and marks the beginning of a break from my legal work.  I will be back on January 2nd with more thoughts on illness, death and taxes for the middle class.

And now I am off to enjoy winter bonfires, slow cooked family dinners, warm beverages, nature walks with my kids, and gatherings with friends and family.

I appreciate your interest in my posts, and wish you a relaxing and joyous end to 2012.

Best wishes,

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Thursday, December 20, 2012

FTC Charity Checklist

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Regular readers of my blog will know that charitable giving is a strong interest of mine.  In the coming year watch for my book on how the middle class can be philanthropic, leaving a legacy without having millions.  In the meantime, I offer these tips, borrowed from the Federal Trade Commission, as you consider making charitable contributions.  Crooks do not take the holidays off, so make sure you are making informed donations.

  • Ask who wants your money and how it will be used;
  • Be careful of similarly sounding names of organizations;
  • Do not send cash donations; and
  • Use caution if promised gifts are being offered.

Wednesday, December 19, 2012

He's Making a List, Checking It Twice....

As the winter holidays approach we are bombarded with songs and cheer.  And if you are an estate planning attorney some of those lyrics may jump out at you.  Take Santa Claus Is Coming To Town:

You better watch out
You better not cry
Better not pout
I'm telling you why
Santa Claus is coming to town
He's making a list
And checking it twice; 
Checking it twice....that is what catches my ear!  I cannot believe how many times I see a look of surprise come over someone's face when the learn the true name of who is listed on a beneficiary form.  A relative has died.  The family knows a life insurance or retirement account exists.  They assume the listed beneficiary is so-and-so.  But it turns out to ex-spouse.  This happened last week.  Thankfully the ex-spouse is the parent of those who thought they were inheriting.  And they were able to say "yes" when I asked "are you on good terms with your other parent?"

If you have beneficiary forms, when was the last time you checked to make sure they say what you think they say.  Clean them up now, while you can.  Life is short, and you may be leaving a pleasant or unpleasant surprise for the loved ones you leave behind.

Thanks for reading, and remember - a blog is not a lawyer.  Please consult with an attorney in your State for advice specific to your situation.

Tuesday, December 18, 2012

Myth Buster -- Powers of Attorney Aren't In Charge When you Die

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During the frequent seminars I give on this ins and outs of estate planning and probate, one common myth bust is that of a power of attorney having the ability to "take care of things" after someone dies.

Again and again clients and seminar attendees will say something to the effect of "so, I named my daughter as my power of attorney for finance.  So when I die, she'll handle things.  Right?"  To which I say, "no that is not right.  Remember, a power of attorney gives someone the power to makes decisions while you are alive but too sick to act.  Once you die, that power ends.  Upon death, the person nominated in a will or trust then has the power to administer an estate.  Those can be the same people, but it is up to you to nominate them in your papers."

As an attorney I find that a very high percentage of my work relates to education.  Many times I am translating legal terms into everyday English, and other times I am slaying those cultural myths that hover around the topic of estate planning and probate.

Thanks for reading, and remember, a blog is not an attorney. Please seek counsel from an attorney in your State for advice.

Monday, December 17, 2012

Sluggish EIN Process at IRS

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Until today I have always had positive things to say about my interaction with the Internal Revenue Service from my role as an estate planning attorney.  Unfortunately, its reputation with me was tarnished a bit today when I attempted to kick start a probate and trust administration for a recently deceased client.

The client had nearly all of his assets in a trust, of which a child will serve as trustee.  Now that the grantor has passed, the trust needs an EIN number.  However, the decedent also had numerous savings bonds outside of the trust, which requires us to open a probate and an estate of checking account.  And for that checking account, we need an EIN.

So on-line I went.  I had tried to do this Sunday when I was working at home, but the IRS apparently gives its computers that day off.  No EIN applications allowed on Sunday!  So first thing Monday morning I go on to the web site.  All is going well.  Number for the probate is issued.  I hit print, hear the print whirl and move on to getting one for the trust.  And that is when I hit brick wall number one, and then brick wall number two.

First, the EIN printed but so small it was not legible.  I tried backing up on the system. No use.  So I called the IRS and after a rather long wait was put through to an agent.  As a third party requester I cannot get the EIN, it has to be mailed to the responsible party.  Estimated mail time....2 weeks.

Second wall, a responsible party can request one EIN a day.  That means I have to wait until Tuesday to request the EIN for the trust.  This time I'll know to write the number down before printing.  But the process is delayed one day because of this limitation, new as of May of this year.

And so I start my week with a bit of annoyance from the IRS.  It could be worse I know, but I understand a bit more clearly why some regard the agency as a bureaucratic nightmare.

Friday, December 14, 2012

A Very Sad Day... Reading How to Talk With Children About Violence

December 14th has been a happy day in my life since 1984, the day my oldest nephew was born.  Sadly that joy is clouded today by the horrific news from Connecticut.  My mind had been mulling what to post, prior to hearing this news.  Once heard I forgot about my legal work and focused on my day with my children.  Ages 4 and 2, they are the focal point of my world.  Off we went to the zoo for fresh air, animal friends, and living in the moment.  Once home I saw a post on Facebook that I wanted to share with my readers.  It offers tips on how to speak with children about violence.  Sadly this is required reading for parents these days.

And the discourse about gun control will likely dominate and polarize our society once again.  My wish is that along with it, we hear for a call for increased access to mental health services in our nation.  Behind this unimaginable act was a very sick person, I write that not knowing anything about the shooter, but I have confidence that we will learn about an individual with mental health needs.

My heart and thoughts go to the parents in Connecticut who sent their children off to school this morning, but were not greeted with hugs and stories at days end.  And now I will log off and return to being with my two, very precious children.

Thursday, December 13, 2012

The Downside to Avoiding Probate

Probate, it is something so many people strive to avoid.  Whether it is dumping everything into a trust or placing beneficiary forms on all of their assets, some people become very diligent about making sure nothing passes through the probate court.

The still dies with debts.  And how will those be paid if there is no probate.  A properly drafted and funded trust would take care of this issue, but a do-it-yourself patch work quilt approach may leave gaps.  As it did for the family in my office today.

The recently deceased parent title property jointly with children.  The various life insurance policies had beneficiary forms.  But probate will likely occur to create a neat and clean manner to sell vehicles, pay funeral bills, medical bills, cell phone, bills.

In the end, organization saves more time and money than whether something is probate or not.  We just scratched the surface on the number of phone calls we have to make to track down all of the parents' assets.  This is going to take time, and cost money.

So, if you want to save your children hassle upon your death, organize and leave clear notes.  It will pay off in the end.

Remember, a blog is not an attorney.  Please consult a lawyer in your state for advice specific to your situation.

Wednesday, December 12, 2012

Aspirin the Wonder Drug?

The order of phone calls sadly seems to go from oncologist to patient, and then patient to me.  Why?  A terminal cancer diagnosis has been given, and the patient realizes that the will they have been thinking about on and off for years really needs to happen.  And happen soon.

As a result I spend a good deal of time working with cancer patients.  And when our meetings are over and the work complete, their stories bounce around in my mind.  Because of my work and their disease I may think about cancer more than your average 39 year old mother of two small children.  Thankfully my thoughts generally fall into the category of "what can I do to prevent this from happening to me anytime soon?"

Lovers of the book The Tao of Pooh by Benjamin Hoff, as I am, know that really there may be very little one can do.  Sometimes life simply happens.  But there are certainly some small steps one can take to decreases the chances of an oncologist visit.  And it appears daily aspirin may offer hope.

This morning I read a piece from the NY Times, without noting the authors name.  For the most part I was nodding my head in agreement; not so much for the call for government regulation of activities, but yes to the idea of spreading the word that the 2,000 year old drug aspirin appears to offset everything from heart disease to cancer.  When I got to the end I saw the writer's name and instantly remembered his book on my bookshelf.  Dr. David B. Agus' book The End of Illness was profiled in an alumni magazine of mine, and I read it earlier this year.  Readers of this blog will remember my review.

According to this op-ed piece, daily aspirin was shown to reduce the risk of lung, colon, and prostate cancer by 46 percent.  Possibly a surprising fact; most people have some awareness of aspirins role in preventing heart attacks, but the cancer link is new.

For those of you wondering why don't cardiac patients don't make up more of my clientele?  They do, on the probate side -- I serve them after they have died.  Cancer is often something one has time to plan for.  Heart attacks remain the number one killer of women in America, but often happen out of the blue, taking with them any chance for planning and organization.

And now I am off to get a bowl of oatmeal and then a short walk before launching into the rest of my day.  If you have a favorite way to promote healthy living in your life, please share.  And thanks for reading.

Tuesday, December 11, 2012

Easing the Burden When You Are Gone

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Creating an estate plan is a step that less than half of adult Americans have taken.  It is estimated that around 55% of Americans do not have a will.  However, even if you are in the minority of people who have created an estate plan, there are always more things you can do to make your departure less difficult for loved ones left behind.   For example:

  • organize your papers in one central folder or binder that is clearly marked Estate Planning Documents;
  • inform your personal representative / executor / trustee about the location of said binder;
  • include copies of all beneficiary forms for your life insurance, retirement accounts, brokerage accounts, and other financial service instruments;
  • provide contact information for those you would like notified of your passing.  I for example include an up-to-date holiday card address list so people could receive a letter or copy of an obituary;
  • list on-line assets, such auto debit for your mortgage;
  • include names and contact information for your tax accountant and the location of your latest tax return; and
  • list phone numbers for guardians of children, pets, or trustees of testamentary trusts.
Having a will in place is a great step towards easing the pain of your passing, but adding a few little items like this can make a huge difference in the time and effort put forth by the person you leave in charge.

Thanks for reading, and remember that a blog is not an attorney.  Please consult a lawyer in your state for advice specific to your situation.

Monday, December 10, 2012

Is A Reverse Mortgage A Good Thing?

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Due to my line of work -- illness,death and taxes for the middle class -- I often am posed the question is a reverse mortgage a good thing for me?  And of course being an attorney, my answer is it depends. Nothing of quality in the world of estate planning and probate is a one-size fits all program.   It might be a good idea, and it might not.  More information is needed before reaching a conclusion.

If you are wondering if a reverse mortgage is right for you, or for your aging parents, the first step is to gather information and learn exactly what a reverse mortgage is.  Second, you need to apply that information to your specific situation and goals.

A great place to get started is the Consumer Financial Protection Bureau's web site.  I learned about it in the financial column in Sunday's paper.  It is full of great basic definitions on all things financial, including reverse mortgages.  It then provides links to "important questions to ask" and a consumer guide.

Do not, I repeat, do not rely on the person selling you a financial service to provide this information.  Get it from a neutral third-party.  You need information from an entity that will not profit off the sale of this device.  During the housing boom around 2006 I could not believe how many people I heard say "my realtor" or "my banker" said this was a good idea.  Yes, and so would the sales person at the Mercedes dealership trying to sell you a car -- hey, you look great in the red one! They are in sales, they make money be convincing you to part with yours, whether that is a good or a bad idea.

Once you understand what the financial instrument is as well as its advantages and disadvantages, you can then layer it over your situation.  For example, a reverse mortgage works for people 62 and older.  If a couple is married and one is 63 and the other 60, this is probably not a wise option.  Even if the older party took out the reverse mortgage in his/her name only, if s/he dies it is payable immediately.  Not a good thing for the younger spouse.

Proceed slowly, gather information, listen to your gut, and recognize when you are talking with someone who will profit for a sale of an item.  From what I've read, it appears that reverse mortgages work well in limited situations.  And as a naturally frugal person, I would be turned off by the fees, interest, etc.  If it were me asking this question about my own situation, I would examine other options to a reverse mortgage, the easiest being selling the home and putting my assets in liquid form.  But that is just me, I like things simple because it is often less expensive that way.

Please remember that a blog is not legal advice.  Please consult an attorney in your state for advice specific to your situation.  Thanks for reading, and have a great week!

Friday, December 7, 2012

A Tough Parenting Question: Who To Name as Guardian?

The news this week has been energized by baby talk, Royal baby talk.  There is the speculation of whether her intense morning sickness is a sign of twins, to whether king or queen to be will arrive in 2013, to maternity fashion.  But me being me wondered, hmmmm, who would they name as a guardian to the child -- Harry, Pippa, someone else?

Yes, as an estate planning and probate attorney as well as the mother of young children (currently 4.5 and 2.5 years old), I know the importance of answering that tough parenting question -- who will raise the child(ren) if both parents die?  Whenever I voice these types of questions to my husband he gives me a puzzled look and says, have you considered a new area of law, something happier?  To which I respond, there is none -- lawyers come into the picture when life happens, the unpleasant aspects of life happening.

And so I find myself writing to you dear reader.  If you have children 18 and younger, have you nominated a guardian?  If so, did you do so legally?  In Wisconsin it must be done via a will, no other means allows you to control the nomination process.  Most likely you have not, mainly because you and your partner cannot come to agreement on this role.  If that is the case, consider the following:
· 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 (if age appropriate)?

No, these are not pleasant questions. But the last thing a child(ren) needs, in my opinion, is a dispute over who will raise them if both parents just died in a car crash.  Agree with me?  Then answer these questions, and do the adult thing and create a will.  Whether you are the Duke and Duchess of Cambridge or ordinary American parents, it is a question you really should answer.

Might one of these members of the Royal Family be a guardian for the Royal baby?

Remember, a blog is not a lawyer.  Always seek advice from an attorney licensed in your state.  Thanks for reading, and I'll be back next week with more thoughts on illness, death and taxes for the middle class.

Thursday, December 6, 2012

Where Should I Keep My Will?

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When working with clients we have a series of three meetings, all covered by a flat-fee.  That means they can pay attention to what I am saying and not worry about my billable hour and the hands on the clock.  It also means they can asks questions, lots of questions, and one that always comes up at the last meeting (the day they sign) is -- where should I keep my will?

My response is to direct them to my letter in their folder, suggesting a fire-proof safe kept in the home.  You know, those small ones you can get at an office supply store for about $45.  Some clients are a bit surprised, why not my safe deposit box at the bank?

The answer is simple.  The document that gives someone the power to get into the box is in the box.  And there you have it - a huge mess.  In my opinion, keep your document safe but accessible.  And that is where the home box comes in to play.

If that is not a comfortable or viable option, put it on file at your county courthouse. Here in Wisconsin a person can file a will, in a sealed envelope, for safekeeping.  The fee is $10.   I blogged about it earlier in the year. This may or may not be an option where you live, but it is worth exploring.

Thanks for reading, and remember a blog is not legal advice.  Please consult an attorney licensed in your state for advice specific to your situation.

Wednesday, December 5, 2012

Pets, Wills and 5 Things to Know

M. Gustafson Gervasi, 2012, one of our 4-legged family members, Willa.

Without a doubt, four-legged family members are dear to peoples' hearts.  Whether you have a Fiddo the Dog, Fluffy the Cat, or Birdie the Bird, keep the following in mind when preparing a will.

  1. Pets that have a high value, let's say over $1,000, should be mentioned in a will because they are technically property.  If you have pure-breed animals worth their weight in gold, they are an asset and should be addressed as so;
  2. Pet trusts, created in a will, are useful for animals with a long life span (i.e. turtles, parrots) or large medical bills.  A trust allows you to place the animal(s) and a sum of money in a trust to care for the animal(s), and then distribute any remaining assets upon the animal(s) passing;
  3. Use a letter of instruction to provide the name of the veterinarian you use as well as information on special food or medicine for your pet.  This does not belong in your will, but needs to be available immediately should something happen to you;
  4. A primary reason animals end up in shelters is due to a sudden death or nursing home stay.  Life happens, what will happen to your pet(s).  Give it some thought now, and save a lot of grief down the road.  Put your wishes in the letter of instruction; and
  5. Make sure someone can get into your home to provide food, water, medicine, etc. should you  have a sudden illness or death. Houseplants can survive a few weeks, but not your beloved animal(s).
Thanks for reading, and remember a blog is not an attorney.  Please seek legal advice from a lawyer in your State.

Tuesday, December 4, 2012

President Obama Offers Estate Tax Proposal -- Return to 2009 Levels

Last week President Obama offered his first go at the federal estate tax, which is tangled up in the whole fiscal cliff scenario playing out in Washington, D.C.  According to news reports, his proposal is to have the federal exemption return to 2009 levels; $3.5 million, with a 45 percent tax.  What does that mean?  Anyone dying with an estate over $3.5 million would have a federal estate tax due, in the amount of 45 percent on the amount above $3.5 million.

If no agreement is met, the federal exemption will fall to $1 million, and I'd have to look up the tax rate.  With no doubt, it would capture a lot more estates than the $3.5 million or the current $5 million.

As December ticks away my eyes will be on D.C., waiting and wondering what resolution, if any, will emerge.  And then I can offer a bit more concrete guidance for my clients.

Thanks for reading, and remember,  a blog is not a lawyer nor does it constitute legal advice.  Please consult with an attorney in your state.

Monday, December 3, 2012

Inaugural #GivingTuesday a Success!

Reports are in, and it appears that the inaugural #GivingTuesday was a success.  On-line giving to charities on the Tuesday after Thanksgiving was up 53% according to sources.  I love this idea.  It completes a trifecta of holiday spending: Black Friday, Cyber Monday and now #GivingTuesday.  Personally, I am happy to skip the first two options and reserve my spending for charities.  No trips to the mall, nothing to wrap, supporting causes that are in need.  What better way to celebrate the winter holiday season?

The former policy analyst in me wonders -- did people concentrate their giving on that one day?  If so, are donations to charities this holiday season up overall, or did they all fall on that one day?  Time will tell.  And the estate planning attorney in me sees this and thinks -- good, those donations were made early enough in the calendar year to appropriately qualify for a 2012 tax deduction (IRS sees them as a donation in the year they clear, not are pledged).

I'll be watching the news and wondering how America's non-profits will far this holiday season.  Thanks for reading, and check in tomorrow for my latest thoughts on illness, death and taxes for the middle class.

Friday, November 30, 2012

What is the Difference Between Medicare and Medicaid?

As an attorney I spend a lot of my time educating clients and seminar attendees on the basics of wills, trusts and estates.  Translating law into plain English is a job requirement, and one I really enjoy.  As the work week comes to an end I offer the following post on the difference between Medicare and Medicaid.  While the words are similar, they are two very distinct programs.  And since Friday is my day out of the office, allowing me to focus on parenting my 4 and 2 year old children, this post was composed one an assistant of mine, Katherine Young, who is in her third and final year of law school at my alma mater, the University of Wisconsin.

I'l be back next week with more thoughts on illness, death and taxes for the middle class.  Thanks for reading, and remember a blog is not an attorney -- always seek counsel from an attorney licensed in your state.

Guest Post by,
Katherine Young,
3L Unv. of Wisconsin

During this past election year, the government programs Medicare and Medicaid have received a lot of attention. While most of the discussion focused on potential changes to the programs, it is important to understand how they function today. As people age, their health care needs and costs will inevitably increase. These two programs are designed to help with such health care costs, but accomplish that goal in very different ways. Both programs also have distinct eligibility requirements and coverage. 
Medicare is a federal health insurance program. It functions basically the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government. Medical bills are paid from trust funds which those covered have paid into. The program primarily serves people over 65 years old, whatever their income; and also serves younger disabled people and dialysis patients. The specific part of the program a person enrolls in when eligible determines what services are covered. Part A covers hospitalization costs, Part B covers additional medical costs, and Part D provides prescription drug coverage. Additionally, people can chose to purchase a private supplemental insurance policy called “Medigap coverage” to help with some costs that would otherwise not be covered. Patients pay part of the costs of health care services through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage. To find out more information about Medicare, you can visit
Medicaid, however, is a joint federal and state assistance program. It varies from state to state and is run by state and local governments within federal guidelines. The program’s purpose is to provide for the health care costs of low-income people of every age. However, each state has strict eligibility requirements. The federal government mandates that certain health care costs, such as hospitalization and doctor services, are covered and each state then has the option of including additional benefits. Additionally, Medicaid is also often used to fund long-term care, which is not covered by Medicare or by most private health insurance policies. Medical bills are paid from federal, state and local tax funds. Patients usually pay no part of costs for covered medical expenses but a small co-payment is sometimes required. To find out more information about Wisconsin's Medicaid program, you can visit

Thursday, November 29, 2012

Intervention, by Richard Russo

It is not uncommon to find out an attorney is also a self-declared book worm.  A love of reading is almost a requirement to get one through three years of law school.  And most of us emerge from those three years with an even stronger desire to read, but to read things that are not about the law.  That was my case, but I have since resigned to the fact that my area of focus, illness, death and taxes creeps into the arts more often than not.

Case in point, while visiting the library recently I spied a slim novella on a shelf written by Richard Russo.  His earlier work, Empire Falls is a favorite of mine, so without thinking I dropped it in our check out bag and headed home.  Intervention is a total of 67 pages, , I thought to myself, wonderful -- a story I can get through in no time!  That turned out to be true (I finished it in two days), but by page 12 or so it was clear that the undercurrent to this story was a cancer diagnosis.  Entertainment?  Kind of, but it also reminded me of the emotional journey many of my clients and or their loved ones are taking.  Sadly it seems people are given a terminal diagnosis of cancer, and one of their immediate next steps is to call an attorney for a will.  While I am honored to serve them in a time of need, it weighs on a person.  So I try and leave office matters at the office, but that does not work all the time.  As it did while reading this story. Thankfully the focus in on personalities, a family feud, the difficult housing market, and not the medical drama.

No matter your reading preference, I highly recommend this book.  In the span of 67  pages Russo gives amazing life and depth to his characters.  And if I am correct, it is over the span of 24 to 36 hours.  Engaging, compelling, entertaining, and insightful.  Take the time and read this novella -- you won't regret it.

Wednesday, November 28, 2012

Wills and Non-Profit Name Changes

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Kudos to you if you have 1) completed a will, and 2) named a charity as either a primary or contingent beneficiary.  Welcome to a minority of Americans who have taken charge of what will happen to assets upon death and who will oversee the process.  However, there is one lingering question I would ask about those named charities -- does the language take into account the fact that non-profits routinely modify and change their name?  If not, it's time for a will update in my humble opinion.

Earlier this week my local newspaper ran a story about how the non-profit Gilda's Club was changing its name to Cancer Support Community.  The reason, younger folks fighting cancer, the groups target audience, were born after Gilda Radner's death and do not know who she is.  Thus they do not make the connection to younger people fighting cancer.  I tested this on my law student working with me today, who was born in 1987, and sure enough she had never heard of Radner.

When non-profits change their name, and are named in a will or beneficiary form, the situation for confusion arises.  Can the personal representative track down the non-profit.  Might be be confused with one of a similar name, etc.  In my mind the gold standard is to list the full legal name of the non-profit (most have a Foundation or Inc. in their name), the federal tax ID number that is unique to that specific organization, and the phrase "or its legal successor organization".

Thanks for reading, and remember a blog is not an attorney nor does it constitute legal advice.  It opens the door to ideas and conversation, but it is essential for you to seek advice from an attorney in your home state.

Tuesday, November 27, 2012

Six Things to Consider When Hiring an Estate Planning Attorney

When it comes time to hire a lawyer to draft a will, opening up the phone book or running a Google search is usually not the best approach for those in need of an attorney's counsel.  Why?  When developing an estate plan to fit your needs you need to be able to share openly the ins and outs of your financial situation, family dynamic and other sensitive concerns.  Here are a few things you may want to consider when seeking out an attorney for your will, etc:

  1. Interview 3 or 4 different attorneys.  Remember you are hiring this person, so hire someone who is not only competent, but whom you like;
  2. Ask friends, family, and neighbors for referrals.  Chances are if they did not like an attorney who helped them they will tell you why, and if they liked the attorney they will give a great endorsement;
  3. Look for an educator.  Estate planning is full of technical terms and concepts.  Seek out an attorney who is willing to explain what they are creating for you and why.  A good attorney will know that a client who understands how to maintain an estate plan when the work is complete will not only be happy, but well served;
  4. Full disclosure.  Before signing on make sure you have in writing the fees and procedures for billing.  This prevents any surprises and or confusion; 
  5. An attorney who is willing to let go.  Current practice recommends that attorneys give clients the final papers when the drafting is done.  That gives the client, aka consumer, full control over who to hire when updates are needed.  A good attorney will trust their work and release the forms, trusting you will return if the client felt it was a good fit; and
  6. An attorney who focuses on illness, death and taxes.  Just as you would probably not want an allergy doctor to perform your c-section, why have a lawyer who dabbles in wills.  This is a complex area, and a specialist should know his or her stuff.
Did I miss something?  If so, please leave a comment.  And thanks for reading!

Monday, November 26, 2012

An Estate Planning Attorney Watches The Descendants

I'll be the firs to admit it, if a movie stars George Clooney I don't need anything else to put it on my must-see list.  Prior to having children, I would have seen the film in a theater.  Since having kids, my cinema days are on hold and it is only every few months that I have the time to settle down and watch a film on DVD with my computer.  And so that was the scenario a few weeks ago.  Snuggled under a blanket, kids tucked into bed, and nothing pressing for the following day, I popped in a George Clooney film.

There was a vague knowledge that The Descendants had something to do with Hawaii, death, and a trust.  Little did I know I was about to spend near two hours immersed in issues I routinely handle at work.  Granted, I do not have clients with 25,000 acres of pristine Hawaiian land in a trust.  But advance directives, the concept of livings wills, accidents out of the blue, family members waiting on an inheritance, and the messiness of relationships all parade through my door.  And my mind.

Curious about the author who wrote the book it film was based upon, I've requested it from the library.  Sure, I could Google his background, but I have client mattes to attend to.  So I'll wait and read the author profile once it arrives.  Attorney?  Journalist?  Therapist?  Talented, that is what I know for certain.

For those curious about terms associated with estate planning, I highly recommend viewing The Descendants.  Beautifully filmed and acted, it also delivers clear concise explanations of the terms that are common to me, but not the general public.

Friday, November 23, 2012

Remember #GivingTuesday

It's here, Black Friday.  Actually, did it start yesterday with the stores that were open on Thanksgiving?  Any way, I am here today to remind you that after Black Friday and Cyber Monday there is a movement....#GivingTuesday.  This year, on November 27th, people are urged to think about how they can give back at this holiday time.

For our family this is a natural fit.  Long ago we abandoned the long holiday lists.  Our small children receive a few simple gifts, and then we write checks to causes that meant a great deal to us in the year ahead.  This year we may add another, such as going to a blood drive or purchasing a meal for a family in need.  What might you be able to do?  Do you want to give back?  Let me know what you think?  I love the topic of middle class philanthropy and want to know what you are thinking.  Please share and let the discussion begin.

Thanks for reading, and I'll be back next week with more thoughts on illness, death and taxes for the middle class.

Thursday, November 22, 2012

Gobble, Gobble

Today our nation pauses to enjoy good food, spend time with loved ones, and celebrate Thanksgiving.  I am taking the day off to be with family and prepare a feast.  But here is a little saying, one our family says before each meal (when we remember, life with a 4 and 2 year old is a little hectic some days).  Enjoy your day everyone!

For trees so tall,
and skies so blue,
For family, friends, and food,
we thank you.

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Wednesday, November 21, 2012

Sustainable Caskets From Wisconsin

This past weekend a blurb in the Sunday Wisconsin State Journal caught my eye -- from honoring his grandfather with a homemade casket, man forms a business.  Oh I told my husband, make sure we hold on to this until I have a chance to read that article!  To which I received a slightly concerned and bewildered look -- my job is rather macabre.

And so I have had a chance to read the article.  It is a lovely profile of a man who has create an eco-friendly business right here in my home state of Wisconsin.  Northwoods Casket Co. creates eco-friendly caskets for affordable prices.  And apparently it is what the public wants, orders are up.

One fact that jumped out at me was in the introduction.  After his grandfather's death his family stood around, in grief, unable to decide what to do -- burial, cremation, ?  In the end the grandmother said yes to the grandson's offer to build a casket, similar to one from the movie Unforegiven (his Grandfather's favorite film).  As I read this my mind was screaming -- you need Wisconsin's Authorization for Final Disposition Form!!!!!  If you have wishes, put them in writing. Why?

First, it will save time and energy from your loved ones debating what you would want.  They'll know, and they'll know who is in charge.  And second, it requires those loved ones to do what you want.  If you have wishes, but them in writing.  If you don't, you are leaving it up to chance.

Tuesday, November 20, 2012

5 Things About Your Estate Plan You Should Share

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The holidays are upon us, and with them come gatherings of relatives and family.  Often a time of joy, it is always an opportunity to make sure your loved ones have essential information.  As I type I can hear my husband now -- seriously Melinda, what a downer topic for a holiday meal.  Okay, yes, maybe not at the table, but during the course of a visit ask yourself, do these folks know what they need to know?  Here would be my top five:

  1. Location of my powers of attorney and will (assuming my husband cannot act);
  2. Name and number of someone willing to care for our cat's in the event of an accident or death;
  3. Location of a list of our assets (retirement accounts, life insurance, business bank accounts);
  4. Where to find information on what bills are on auto-pay with our credit card and or checking account; and
  5. How to find contact information for the people we've named as guardian of the children and their trust.
The people you share a holiday meal with are often the people you will turn to in crisis.  Life will be just a bit easier if this information is shared.  May it dampen the mood?  Yes, but follow-it up with a good comedy or nature walk.  That is how this estate planning lawyer would view the opportunity.

Monday, November 19, 2012

What If You Do Not Have A Will?

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Show of hands, who does not have a will?  This is a routine question I ask during the many seminars I offer on the basics of wills, trusts and probate.  Sheepishly hands are raised.  To which I offer -- Guess what, you actual DO have a will.  If you have not taken control of the situation and written one yourself, the State of Wisconsin has done one for you.  And it is located in State Statues.

Called intestacy, when a person dies without a will the distribution of his or her probate property (meaning assets that do not have a beneficiary form or other label), is governed by state law.  In many situations this distribution may be the sames as the person would have said if they had done a will.  And in many situations it is not the same.  For example, property may pass to your nearest living relative instead of the person you are spending your life with but are not legally married for some reason.  Or, if you and your spouse are killed in a car accident, your assets may go to your parents (assuming you have no living children) even though they don't need the money.

Doing a will is not a fun event.  Last week a during an initial meeting a client got up, grabbed the candy jar from the waiting area and brought it to the table saying "I need some brought me down".  Yes, I did, and that is my job.  These are hard questions, but important ones.  If you die, where do you want your property to go?  And if that person has died?  If you don't put it into a will, state statute controls.

Do you agree with the State's assumption.  Here is Wisconsin's intestacy distribution.

Thanks for reading, and remember a blog is not an attorney.   Please consult with a licensed attorney in your state for advice specific to your situation.

Friday, November 16, 2012

What's Going on With the Federal Estate Tax?

The good news is that those pesky political commercials are behind us now.  However, the focus has now been redirected to the "fiscal cliff".  Buried in there is a discussion on what to do with the federal estate tax.  If no action is taken, the federal exemption limit will fall to $1 million in 2013.  And it will resurrect the Wisconsin estate tax.  So, while we may want to look away from the ways of Washington, D.C., I cannot.

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I will be following the discussion (is that a generous choice of words) and wait, listen, and read.  What oh what will happen?  Time will tell, and sadly I think Congress and President will simply "kick the ball".  Meaning they'll come up with a short-term fix, good for a year or two.  Which means long-term planning is not really an option for folks flirting with the $1 million level.

Enjoy your weekend everyone, and I'll be back Monday with more on illness, death and taxes for the middle class.

Thursday, November 15, 2012

Codicil, Issue, T.P.P -- Defined Here!

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All professions have a lingo all their own, and that is especially true in the practice of law.  Latin, German and French all contribute to an amazing list of terms that roll of the tongues of estate planning attorneys, but cause blank stares and confusion among everyday folks.  That is why my firm web site has a glossary of estate planning and probate terms; one role of lawyer is to educate.  The three that jump out at me are:

  1. Codicil -- a fancy word for amendment to a will.  Someone creates one of these when s/he already has a will, but wants to make a minor change.  For example, change the guardian named for children or the name of a charity.  Just like a will, a codicil must be executed to meet State law requirements;
  2. Issue -- as the mother of two young children, I feel this word has a double meaning.  Technically it refers to your offspring a.k.a. children, grandchildren, great-grandchildren, etc.  You can fill in the side I refer to as a double and the word issue!; and 
  3. T.P.P. -- these three letters refer to the phrase Tangible Personal Property.  Things like wedding rings, the family Bible, hunting rifles, Grandma's rocking chair, etc.  Instead of listing all that stuff, probate attorneys call it TPP.
I'm certain there are many more words out there that cause confusion, did I miss one for you?  If so, please leave a comment and I'll address it in a future post.  Thanks for reading, and remember, a blog is not a lawyer.  It is wise to consult an attorney for advice specific to your state and your situation.

Wednesday, November 14, 2012

Four Things To Consider When Selecting An Agent for Your Power of Attorney for Health Care

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Starting at a blank power of attorney for health care form and confused about who to name as your agent?  If this is you, pat yourself on the back for taking control of your life and addressing this issue.  As for who to name, consider the following, which I come to from personal experience.  I was my father's power of attorney for health care in 2009 while he was dying.

First -- who do you know and trust that is good speaking with doctors and nurses;

Second -- who in your circle of family and friends is comfortable with medical terminology;

Third -- who in your life has the emotional strength to keep it together if this document comes into play -- we are not facing a sprained ankle here, but a very severe condition; and

Fourth -- who has the time to be there?  My father spent the final month of his life in a hospital, that last week in palliative care.  At the time I had a 13 month old child and my own legal practice.  Being there was not always easy, but I made it work.

No one may fit every element perfectly.  But use these points to evaluate who is best suited for the job.  Remember, don't select your first born because of birth order or your sister because she'll nag you until the day you die if you don't name here.  Select the person who is right for the job.  Trust me, I write from experience.

Thanks for reading, and remember a blog is not an attorney.  I recommend you seek the advice of a licensed attorney in your state for information specific to your situation.

Tuesday, November 13, 2012

Educate Yourself about Wills, Powers of Attorney, Probate and more in 2013

Somehow or other 2012 has nearly passed us by.  And once again I am looking forward to starting the new year with a variety of seminars on issues related to illness, death and taxes for the middle class.  From talks at a local church, to a small segment of a retirement workshop, to Money Week, you'll find me all around the Madison area educating folks on the basics of estate planning.  Check out my web site for specifics on dates and locations.  And if your organization is interested in setting up its own presentation, just let me know.

Monday, November 12, 2012

Three Ways to Avoid Probate Without a Living Trust

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If you are over a certain age you probably receive routine cards in the mail inviting you to the local hotel for a free chicken dinner and a seminar on how to avoid probate via a living trust.  These instruments are pushed, often by sales people who are not attorneys, mainly because they are lucrative.  Proceed with caution.

When I work with clients I use trusts only when the fit the situation and I feel the client has the sophistication to manage the inevitable tax issues that will develop.  Most people do not want the hassles associated with trusts, but want to avoid probate.  If so, our conversation centers around the use of:

  1. Transfer on Death Deed for real estate.  Not all states have this option, but we do in Wisconsin.  It is a label placed on a deed that states who should inherit the property upon the owners death.  Probate is avoided, and a small filing fee is paid to the register of deeds.  It does not fit all situations, but it appealing for many clients;
  2. Pay on Death Cards.  Available for bank or credit union accounts, it is a label you can put on bank accounts that gives the remaining funds to the person(s) upon your death.  Transfer can happen with a few deaths, and usually requires submission of a death certificate.  Again, because the asset had a label, it avoids probate.
  3. Beneficiary forms.  Associated with retirement accounts and life insurance, these forms direct the distribution of assets upon the death of the owner.  No probate is required.  Transfers happen very quickly, usually within a few weeks.
While these are appealing because they avoid probate, it is important that the owner make sure the labels they've put on property (as those discussed above) are always up to date.  Why?  If an ex-spouse, former boyfriend/girlfriend, etc. is listed, but a will directs property to another person, the label controls.  Not the will.  When there is a label, the label trumps the will.

Remember, a blog is not legal advice.  It is essential that you consult with an attorney in your state for advice on your specific situation.  Thanks for reading, and I hope this post has given you some good things to investigate.

Friday, November 9, 2012

Fiduciary Tax Returns and the Personal Representative in Wisconsin

There is nothing certain about life except death and taxes.  And often the two go together.  Loosing a loved one is never easy, no matter how much time a family may have had to prepare.  Emotions run high, caregivers suffer exhaustion, paperwork swirls, life marches on, and some matters need to be addressed even though they are unpleasant.  I see this every day in my legal practice.  To the extent you can, do not overlook income tax matters for the loved one you have lost.

If a loved one has died and you are picking up the pieces and moving the paper work forward, there is one important thing many overlook -- income tax forms.  When empowered by a probate court in Wisconsin, the  Personal Representative has a duty to make sure a last income tax form is filed for the decedent.  And, of the decedent's estate earned more than $600 (current level, which may change in the future), then a fiduciary income tax return is likely due as well.  And that is why a CPA is a good friend to have.  When in doubt, seek advice from a licensed tax professional.  As I always say, it is less expensive to seek advice beforehand rather than pay an attorney to clean up a mess.

If you are struggling to get your mind around this issue, an example may help.

  • my father died on 9/18/2009;
  • in 2010 we had a responsibility to file a final individual income tax form for 1/1/09 - 9/18/09; and
  • had his estate generated more than $600 from 9/19/09 - 12/31/-09 OR in calendar year 2010, then a fiduciary income tax form for the estate would have been required.
Tax issues may linger, unnoticed for years.  But more likely than not, they will surface....along with penalties. To learn more about Wisconsin's requirements, try the Department of Revenue's web site.

Thanks for reading, and remember a blog post is not legal advice.  Please consult with an attorney in your state for information specific to your situation.

Thursday, November 8, 2012

Moving Words by NPR's Aaron Freeman

Two weekends ago our church (Prairire UU in Madison, Wisconsin) took a service to recognize the Day of the Dead.  A traditional Latin American holiday, it is a moving tribute to loved ones who have left their earthly life.  Afterward, a staff member sent a link to a moving statement created by NPR's Aaron Freeman. I found a link on YouTube (the photos are bit off).  It is titled - Why You Want a Physicist to Speak at Your Funeral.  The words are moving, and I find it comforting to be reminded that one's energy never really leaves this Earth.

The work I do is rewarding, but also emotionally draining at times.  I am thankful for the insight of Aaron Freeman and others like him.  A positive outlook can be such a spirit lifter, especially on those days you learned of a client's passing.

Take care, be healthy, and enjoy every minute you can!

Wednesday, November 7, 2012

Certified Mail vs. Regular Mail?

Ever wonder if you should bother using certified mail instead of regular mail?  As an attorney I prefer to err on the side of caution, and would likely opt for certified.  While attending a recent tax law seminar update one update related to mailings to the Wisconsin Department of Revenue. general, a petition is considered timely filed only if it is actually received by the Commission (Tax Appeals Commission) on or before the due date, with one exception.  The exception....Wis. Stat. section 73.01(5)(a), a petition is considered timely filed when it is mailed by certified mail in a properly addressed envelope, with postage duly prepaid, with the envelope postmarked before midnight of the last day for filing.  The use of regular mail is untimely.  Priority mail is untimely.  Sliding it under the door of the office after it is closed is untimely.  Details matter in the area of law.
While this is a narrow section of Wisconsin law, the principal is a good one.  If timing is key -- use certified mail, and check the statutes or administrative rules for these types of requirements.

Thanks for reading, and please remember that a blog post is not a legal opinion nor a substitute for legal advice.  Please consult an attorney for advice specific to your situation.

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Tuesday, November 6, 2012

Salute Democracy

Every four years our country allows its adult citizens to come forward and have a say who which person shall lead our nation.  Whether you love or despise government, I encourage you to exercise your right to vote.

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Four years ago my husband and I walked to our polling place, pushing our infant son in his stroller.  Today he is four years old and has a two year old sister.  As a child I remember accompanying my mother to the voting booth.  It is simply something we do, just like brushing our teeth.  And I look forward to many more elections, especially the ones where my children will be old enough to case a vote themselves.

Enjoy democracy today, it is a precious gift.

Monday, November 5, 2012

Where to Mail A Gift Tax Return

If you are "do-it-yourself" type person, there is a chance you'll be processing a 2012 gift tax return for yourself or a loved one who died in 2012.  If so, I recently came across a nice nugget of information...the mailing address for the form.  Unlike other IRS forms, there is one mailing address for all gift tax forms.  Whether you live in Maine or California, the address you should use is:
Department of Treasury
Internal Revenue Service Center
Cincinnati, OH  45999
Forms are due by April 15, 2013.  Disclaimer -- life is change, so please note this blog post was written in November 2012.  Please double check with the IRS to make sure the agency has not made any changes after this posted.  And as I always say, a blog is not a lawyer.  Please call one for advice specific to your situation.

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Friday, November 2, 2012

Proposal May End the Use of ILITs

Legal lingo is full of acronyms, including ILIT which stands for irrevocable life insurance trust. It is a fairly advanced estate planning tool used by higher net worth families to minimize the possible impact of federal estate taxes upon death; especially attractive to business owners who have a lot of wealth on paper, but not so much in the liquid sense.  ILITs allow someone to set up a trust, and gift money to that trust.  The trust purchases a life insurance policy on the person.  Upon his or her death, the insurance pays into the trust and now there is liquid cash available to pay an estate tax, but it is outside of his or her estate.  It is a way to prevent dipping into a business or farm's equity.  And it may become a thing of the past.

The President's FY2013 Green Book, or fiscal proposals, calls for ending ILITs.  No longer would the assets be excluded from the decedent's estate nor would distributions during the grantor's life not be subject to the gift tax.  The proposal does not makes this change retroactive, but rather applies to trusts created on or after the date of enactment.

My legal practice focuses on issues of illness, death and taxes for the middle class.  With a federal tax exemption level of $5 million (currently), nearly none of my clients are concerned with the tax of ILITs.  However, some touch on the fringes of this number, especially those building businesses.  As changes to the federal exemption level develop, and a possible extinction of the ILIT, it is an issue I will monitor and post as needed.

Thanks for reading, and remember a blog post is not your lawyer.  Please consult with an attorney for advice on the specifics of your situation.  And a special thanks to my law clerk, Sarah Wood, for her research on this topic.

Thursday, November 1, 2012

Day of the Dead - Remembering Departed Loved Ones

The 1st of November is the Day of the Dead, a traditional Mexican holiday that has spread across the globe.    Grief from the loss of a loved one can be crippling, however, November 1st gives one a great reason focus on the greatness that once was and less on what was lost.

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Personally I find this to be a great way to share the life of my father, who died in 2009 when my son was a year old and before my daughter was born.  My children will only know their maternal grandfather through me, and today is a day I can:

  • cook one of his favorite meals;
  • watch a favorite TV show or movie;
  • look at photo albums from my youth;
  • tell one of his favorite jokes; or
  • scatter some bird seed on his grave (he so loved feeding the birds).
How about you?  What things do you do to celebrate a loved one who has parted?  Thanks for reading, and I'll be back tomorrow with more thoughts on the topic of illness, death and taxes for the middle class.

Wednesday, October 31, 2012

Trick or Treat?

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October 31st has arrived -- Happy Halloween.  As you prepare to take your little goblins and witches (in my case a pirate and an owl) for an evening stroll to collect candies, or you prepare a bowl to keep near your door for the little ones posing the question trick or treat, don't forget the coins.  Yes, Halloween is most prominently associated with candy corn and other sweet treats, but it is also a day when children can make a difference in the lives of children with less advantages through the UNICEF program.  Created over 60 years ago it is a long-standing charitable program.  Enjoy the fun, and consider what you might be able to do to put more treat and less trick into the lives of children around the globe.  One not need be a billionaire to make a difference in the world.

Tuesday, October 30, 2012

Will Wisconsin Have an Estate Tax in 2013?

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Ask a lawyer a question, and you'll likely get an answer along the lines of "it depends".  And that is the case for the question of whether Wisconsin's state estate tax will return in 2013.  As I write this post, we can only guess about what will happen, and here is why.

First, an estate tax is a tax levied upon an estate when a person dies with a net worth in excess of an amount set by a legislative body.  There is a Federal estate tax, with an exemption level set by Congress.  And then each of the 50 states can elect to implement their own state estate tax.

Second, Wisconsin used to have an estate tax, but it ended as of January 1, 2008.  Its end was based on state legislation linking its tax to the credit allowed on the federal estate tax return for taxes paid to a state.  Current federal estate tax exemption levels are $5 million per individual; if a person has a net worth lower than $5 million, no federal estate tax is owed, no return is filed, and no credit is owed to the state.  However, the current law is set to expire, and unless Congress and the President act before January 1, 2013, prior lax law will be resurrected.  And with its return, a limit of $1 million will be established.

Third, if neither the Congress and President nor Wisconsin's legislature act, it appears that the Wisconsin State estate tax will return January 1, 2013.

So, we cannot predict what theses various governmental entities will do.  My personal guess is that the federal government will not let the federal exemption fall to the $1 million because it will capture far more small business and family farms than any politician would want to see happen.  But, only time will tell.  Keep reading, and I'll post as soon as we have a definitive answer.

Monday, October 29, 2012

Transfers Not Subject to the Gift Tax

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When speaking to groups on issues related to illness, death and taxes for the middle class, I spend more time on matters related to gift taxes than I do the federal estate tax.  The reason is simple -- the gift tax applies to more middle class homes than the estate tax does.

The gift tax is a tax owed by the person making the gift if the amount exceeds the annual exclusion for the year (in 2012 it is $13,000 per person per year).  However, there are transfers that may give the appearance of a gift, but are not taxable according to the IRS.  Three of them are:

  1. Transfers to political organizations (as defined in Section 527(e)1(1) of IRS code);
  2. Transfers for education, excluding costs for books, supplies, dorm fees or board, as well as contributions to 529 plans; and
  3. Transfers for medical expenses (care must meet the same requirements as the income tax deduction).
Now remember, a blog is not a lawyer so this is not legal advice.  It is not tax advice.  Rather it is a forum for discussion.  As the calendar year winds down, rhetoric out of Washington, DC flares with talk of the federal estate tax.  Again, this is unlikely to impact most middle income homes.  The gift tax does.  It is important to know what it is, when it applies, and what the exceptions are.  Blog posts are stagnant once posted, so it is vital to consult with an attorney or tax professional to ascertain the current laws.  Ask questions, gather information, be informed.  You'll be thankful in the end.

Friday, October 26, 2012

Frequent Fliers Miles, Loyalty Points, and the Great Beyond

If you are like most people, in your wallet or brief case you likely carry a frequent flier card or some sort of loyalty program.  And given the kind of work I do, a natural question is what happens to those "points" when you die?

 Of course, being an attorney my answer is "it depends".  As recently covered at a recent continuing legal education update it was shared that the distribution of these assets vary, and depend on the terms of the contract created by each company.  But, there is an article available on the web (dated 2011) that covers some of the big ones.  Do you use a beneficiary form?  Does your will control?  What if you die without a will?  If this seems trivial, pause and reflect on the fact that it is estimated that members are estimated to be holding approximately 3.5 trillion unused miles.  That is a lot of miles to pass without a little though and reflection.

Even if you do know what will happen (they pass via will) in your situation, make sure the fact you hold those miles/points/awards is known to your personal representative.  If they don't know about an asset -- does it exist?

Thanks for reading, and I'll be back next week.  Also, keep in mind that a blog post is no substitute for speaking with an attorney about the specifics of your situation.

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Thursday, October 25, 2012

Pearls of Wisdom: Estate Planning and Probate

Yesterday and today I have been attending the annual CLEW Tax Law update in Madison.  A day and a half packed with tax concepts, code citations, and esoteric terms.  For the registration fee I walk away with the following three pearls of wisdom, which anyone can benefit from in the world of estate planning and probate:

  1. File things on time, and avoid creating a questionable issue the court will have to decided (i.e. is priority mail the same as certified mail; the answer in the eyes of Wisconsin's Department of Revenue is no);
  2. Read the entire trust (or insert the name of any legal document; will, contract, form, etc.); and
  3. Keep it simple -- the most elegant solution to problems does not require brilliance, but rather appreciation by the government employees reading the legal forms created.
Nothing profound.  Concepts available to all, not just those with a multitude of letters after their name.  Common sense, but often overlooked.  I am thankful for the wisdom conveyed, and will be back next year for the 47th annual update in 2013.

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Wednesday, October 24, 2012

Following Wisconsin Tax Law

I am only five minutes in to the annual CLEW Tax Law workshop, and I've already received a great bit of information.  Wisconsin's Department of Revenue offers the option of receiving email updates on various areas of tax law.  From "tax professional" to "sales tax", you can plug in your email and get updates as they are published.  I've signed up, and so can you by clicking on the DOR's web site.  Stay informed, it is powerful.  And thanks for reading.  Feel free to share links to other useful tax law update sources if you have one.

Tuesday, October 23, 2012

Back to the Classroom

The forecast for Madison tomorrow predicts partly sunny and 76 degrees....on October 24th!  Of course I am scheduled to be in a day-long seminar on tax laws.  There will be no Ferris Bueller day for me, as there apparently will be for a fellow probate attorney living down in Chicago (according to her Facebook post).  No, I will be in class....all day.

Yes, even attorneys return to the classroom.  Once we are handed a diploma and admitted to the bar, we are still required to attend 30 hours of continuing legal education (CLEs) every two years.  And every fall you will find me enrolled in the CLEW Tax Workshop, presented by the Wisconsin Law School.  A day and a half of jammed packed tax fun, and for a great value.

And if you feel bad for me being stuck inside all day, there is no need.  It could be husband has to take continuing education for his professional engineer stamp (electrical).  And his classes have quizzes.  Ours do not!

Have a great afternoon, enjoy the mild weather if it is hovering over your piece of the world.  And watch for blog posts related to all things tax in the weeks ahead.

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Monday, October 22, 2012

Farms, Estate Tax, and an Election Year

NPR ran a short, but well-done story on the rhetoric surrounding the federal estate tax.  As the campaigns race towards a finish line, I am not surprised to see discussion of the estate tax emerge.  Feared by many, but paid by very few, it is yet another example of people playing off of other's lack of knowledge ("I will save you from this tax....even though you are not likely to have to pay it").

In the unlikely event the exemption falls to $1 million, then yes, it will hit a lot more people.  However, I urge people to pay more attention to issues related to gift taxes than to estate taxes, paid by less than 2 percent of estates.

Friday, October 19, 2012

Wisconsin's 529 Plan Changes

Previously I have blogged about the upcoming changes to Wisconsin's 529 Plan, called EdVest.  The plan allows parents (and others) to save money for college in a tax efficient manner.  Deposits result in an income tax deduction, growth is not taxed, and withdraws are not taxed if used for higher education.  All of these make 529s quite attractive for parents thinking ahead to college.

When Wills Fargo was the plan administrator when we opened our accounts, and for both we opted for an index fund because the expense ratio was low.  This means more money goes into our investment and less to the company's pockets.  As Wells Fargo is moved out and TIA-CREFF is moved in as the plan administrator we are disappointed to read in the materials that only ranges of expense ratios and not ratios for each fund now available.  Without this data it is challenging for us to compare the funds under Wells Fargo to the new options.

In the end what matters most is putting money into the 529s, and not how much went to administration fees.  But the frugal lawyer in me cannot help but be a bit annoyed.  Ranges do not offer the level of specifics I desire.  Details matter, especially when we'll be making deposits for the next 18+ years (our kids are 4 and 2).

One comment my husband offered made me laugh about the situation -- later this month we'll learn more about whether this change is a trick or a treat.  Enjoy the Halloween season, and I'll be back with more thoughts on illness, death and taxes for the middle class next week.

Image Credit :  M. Gustafson Gervasi -- front steps, Oct. 2012

Thursday, October 18, 2012

What is an Ancillary Probate?

When I saw the envelope in my in-box I knew -- damn, the register of deeds rejected our filing.  A thick envelope is never a good thing; it means everything you sent them is coming back, a thin envelope means it was accepted an a confirmation slip awaits.  Just the opposite of college acceptance letters, or at least back in the day when college admission was conveyed via the US Mail and not the internet.

Because the man who had died was listed as one of three people on the deed, with no statement of what interest he owned (join tenant, life estate, etc.) the presumption is tenants-in-common.  As such, his share needs to be transferred via probate, and not the much more simple HT-110 form.  To complicate matters, the decedent was a resident of Illinois, not Wisconsin where the property at issue is located.  And when that happens, an ancillary probate is needed.

Ancillary is an adjective which means to provide necessary support to a primary activity or operation.  Since the decedent lived in Illinois, the Illinois probate is primary (remember, probates are matters of State law).  However, and Illinois proceeding cannot transfer real property owned in Wisconsin.  A probate proceeding here in Wisconsin, in the county where the property is located, will be required to change the deed.

Had the deed stated joint tenants, an ancillary probate would have been avoided.  The moral of this story is -- when you own property in a state where you do not have residency (residency is easily determined by where you vote), be aware that an ancillary probate may pop up unless to take action.

Please note, a blog is not a legal opinion.  Consulting with an attorney in your state about the specifics of your situation is essential.  And thanks for reading.

Wednesday, October 17, 2012

Removing An Old Will From the Probate File!

Image credit: - free image

Routinely, people ask me what they can do to minimize the burden of probate on loved ones once they are gone.  Common convention always seems to move towards trusts, which I feel are more complexity than most people want or need.  My answer is simple, be organized!  The more organized you are, the easier it will be on your loved ones once your earthly days have come to an end.

And keeping with that mantra, I recently asked a law clerk of mine to research the exact steps involved for a client to remove his old will from the file at Dane County's Probate Court, where it had been placed for safekeeping.  After working with me this past summer, he had a new will that revoked his former one on file. However, upon his death there is a chance that the newer will would not be located in his personal possessions and the old will on file would be found.  Later is the newer one was recovered....well you get the picture, a lot of hassle would occur.

Thanks to Sarah Wood, one of my current law clerks, my client and I now have the exact steps needed for that original will to be removed.  Here are her thoughts:

Have you changed your will but still have an old copy on file at the courthouse? If so, probate court  may rely on your old will and fail to realize that a new will is in place. It is common to change your will throughout your lifetime, so what can you do to reduce confusion? All you need to do is remove your will on file at the probate court. The process for removing an old will in Dane County, Wisconsin, is easy. Just follow these simple steps:
·         Go to  Room 1005 of the Dane County Courthouse, located at 215 S. Hamilton Street in Madison, Wisconsin. The Dane County Probate Court is open from 7:45 – 3:00 Monday through Friday.
·         Bring a form of identification with you to the courthouse. Let them know you are there to have your old will removed from their file.
·         A courthouse employee will then provide the necessary forms for you to fill out and sign.
·         After completion of these steps, your old will will then be removed from the courthouse file.
 Removing old wills from the file at probate court is just another easy step that you can take in reducing confusion and staying organizing when it comes to your estate plan. By following this simple process, you can ensure that your most recent and correct will is followed during probate. 
Thanks for reading, and please remember that a blog is no substitute for an attorney.  Please consult a professional in your state for advice specific to your situation.

Tuesday, October 16, 2012

2013 Gift Tax Limits

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Recent news reports show that the amount any one person can gift to another in a calendar year will increase from $13,000 in 2012 to $14,000 in 2013.  The increase is a result of cumulative indexing.  Married couples can each give a gift, meaning a total of $28,000 could be gifted to a child in the calendar year.  One reminder, the gift is considered to have been made when the check is cashed.  So, if a check is written on December 23rd, but not cashed until January 2nd, the IRS will consider the gift to have been made in the year corresponding with January, not December.  This could become an issue if the practice were repeated, but the check cashed on December 30th.  Both would be viewed as occurring in one calendar year, and then gift tax issues arise.

Please remember, a blog post is no substitute for an attorney of CPA.  Please consult with a professional in your area for the latest information and advice specific to your situation.  And thanks for reading!