Enjoy a Fish Fry Friday

It's Friday, my day off from my legal practice.  I still enjoy putting up a small post, usually related to healthy living practices.  When you discuss illness, death and taxes all week you want to end on a positive note.  And since we are in the height of Friday Fish Fry's, I thought I'd post a link to a useful web site for those seeking healthy and sustainable fish options.  

For a final image I off you this, a photo I took several years ago while traveling in Door County, Wisconsin.  Perch I am familiar with, but what's with lawyers on the menu? Anyone?

Hospice Cards & Hallmark

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When I see an article about Hallmark it grabs my attention.  Why? It was a part-time job at my local Hallmark chain that allowed me to earn money for my undergraduate tuition and living expenses.  As a result, I have a fondness for lovely greeting cards.  On-line cards are nice, inexpensive, and good for the environment.  But finding an actual card in the mailbox has a huge comfort boost.  And I always thought Hallmark has a card for everything: divorce, death of a pet, etc.

And then I see this article about a women lobbying the Greeting Card giant to create specific cards for those entering hospice care.  It asserts that the "get well soon" cards stop the moment hospice comes into the picture.  And apparently it took some time and the power of Twitter for the women to get the company's attention.  Reading the store I wondered why she did not create a line of cards herself, but she has chosen to lobby the company.

Personally I agree that some specific end-of-life card would be welcome.  Get well soon simply misses the mark when a terminal illness is approaching its end.  What do you think? Specific for hospice care, or is that pushing the envelope too far?

Leaving Probate Assets Behind...3 Things Not to Forget About

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Should I ever appear on the game show Family Feud (is it even still on the air) and the question on the big board was "what are 3 things commonly overlooked in a probate?", I'd stand a decent chance of scoring big.  Sure, I love games of all types, but it is my work as an estate planning and probate attorney that gives me insight regular people don't.  When someone dies I see lots of issues develop.  Just ask my husband -- he has been known to encourage me to add a happier area of law to my practice.

But I digress.  What would those 3 things be -- here you go:

1. Storage Lockers.  Thanks to "hit" shows on cable, more people are aware of the fact that storage lockers may contain property of departed loved ones.  And they know if unclaimed, they might be auctioned off.  Still, this knowledge is not at the top of their to-do list when a loved ones dies.  People are grieving, forced to converse with relatives they do not get along with, and in some cases, dealing with final taxes, etc.  But do not over look the storage locker. One, there is likely a monthly bill the estate is responsible for paying.  And two, the items are likely part of the probate estate and should be inventoried;
2. Cemetery Plots.  These small pieces of land are owned by people. Sometimes viewed as "family plots", they are still owned by a person.  And when that loved one dies, steps should be taken with the cemetery to transfer ownership; and
3. Frequent flier miles or other loyalty rewards.  Tucked away in your wallet or stored on your computer may be a frequent consumer number worth thousands of dollars if not more.  When closing the affairs of a loved one, ask yourself if the departed may have had a large account, and if so how can it be located.  Often considered as part of the probate estate, those points may possibly be redeemed according to the terms of the service contract with the company.

Have a story to share about something you overlooked while closing the affairs of a loved one?  Leave a comment and share, it will make me smile.  Thanks for reading, and remember, a blog is not a lawyer.  Seek advice from an attorney in your state for advice specific to your situation.

Update on Wisconsin's Funeral Trust Fund

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One of the top ten questions clients ask me is "should I prepay a funeral....I want to make things easy for my loved ones?".  My response always had some hesitation in it.  Prepay can be inflexible.  What if you change your mind on the type of burial you want?  What if you move far away?  And I'd end with, I personally prefer to hold money myself and pay for things when needed.  Now, if your time is near and you know it, a prepaid fund might be useful.  Never did I imagine that I could add to the list, "well that Fund is insolvent, recent reports indicate that is owes $23 million more than it has available.  Yes, Wisconsin's Funeral  Trust is belly-up!"

Last fall news broke that the fund had been mismanaged.  A court-appointed receiver was put in place.  How the money was lost has been the focus on work up until now.  Litigation may be coming in the future, but it is too early to tell.  Since the scandal broker several hundred people with accounts have died.  While those funerals were covered, the funeral homes only received 60 cents on the dollar.

Puzzled about what to do now?  You are not alone.  Keep in mind that funeral expenses are considered aspects of a probate, and are the first item paid during the administration of a will. Prepayment is not required, all you need is a funeral home willing to bill the estate, and force family members to pay and be reimbursed.

I will share the news as this situation unfolds.  Thanks for reading, and remember a blog does not constitute legal advice.  Please contact a lawyer in your state for advice specific to you situation.

Presidential Wills

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Presidents are people too!  And that means some had wills, and some did not.  I am not the only estate planning lawyer to think about this issue, and today's post owes a great deal of thanks to Schlender Law Firm in Boulder, Colorado.  They put together an interesting post back in July of 2009.

When a person, or a President dies without a will, it is called intestate.  When this happens any probate property (property without a beneficiary form or other such label) passes according to state statute.  And it appears that the following Presidents all died without a will in place:

• Abraham Lincoln;
• Andrew Johnson;
• Ulysses S. Grant; and
• James A. Garfield.

Other Presidents did have a will in place, and thanks to the wonder of libraries, court records being public, and cyber space, you can read them.  Links are below:

• George Washington's will;
• Thomas Jefferson's will;
• John F. Kennedy's will; and
• Richard Nixon's will.

Reading a will not only tells us about the decedent, but also the times in which they lived.  Reading Jefferson's will is a bit surreal; our sitting President is an African American, yet the will of Jefferson bestows freedom for his loyal servants.

Adios to the Charitable Deduction?

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Recent news reports indicate that Congress is currently considering changes to the charitable deduction aspect of annual income taxes.  The deduction, which has been around for 96 years, is one of several items the Congress and President are considering as the face the challenge of "broadening the tax base".  Bloomberg News reports three possible changes that may occur in regards to the charitable deduction:

1. cap on amount of allowable itemized deductions;
2. limiting the tax rate at which the deductions are allowed; or
3. converting it from a deduction to a credit.

For those who do not itemize, this issue is basically a mute point because the donation and hence deduction is never realized.  This fact escapes many people.  I see it crop up in mortgages too.  People will say "mortgage debt is a good thing because you can deduct the interest".  Well, yes, but only if the interest is more than the standard deduction and you then itemize those deductions.  If you do not itemize, you are not deducting a thing. It sounds great, but has no real world impact.  And as this article points out, only 1/3 of all filers actually itemize their deductions.

Non-profits on the other hand many feel this harshly if the proposal turns to reality.  In 2011, 73% of charitable donations were made by individuals -- not corporations or foundations, actual people.  Would that number decrease if the charitable deduction is limited or removed?  Time will tell. 

How about you?  If you donate to non-profits, would those donations loose appeal if there were no charitable deduction?

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

Lewis Black, The Center for Disease Control, and Valentine's Day

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It's February 14th, and that means it is Valentine's Day.  Reason enough for a shorter, more whimsical post. So I turned to Brainy Quotes.  No, this one is not dripping in sweet sentiments.  It's from Lewis Black.

"What I find most disturbing about Valentine's Day is, look, I get you have a have a holiday of love, but in the height of flu season, it makes no sense." - Lewis Black

And from that I will provide you with a link the the CDC's six recommendations on avoiding the flu:

1. Avoid close contact;
2. Stay home if you are sick;
3. Cover your mouth and nose;
4. Clean your hands;
5. Avoid touching your eyes, nose, mouth; and
6. Practice other healthy behavior (drink water, exercise, etc.)

Enjoy this day devoted to love, in the midst of flu season!  I'll be back tomorrow with more serious thoughts on illness, death and taxes for the middle class. 

How a Modern Day Lawyer Views Charles Dickens' Will

Rarely does a day pass when I do not find an interesting article posted on a favorite blog of mine.  Written by Professor Gerry W. Beyer, Wills, Trusts, and Estates Prof Blog contains a vast amount of technical, light, and whimsical material related to illness, death and taxes.

Today I read an interesting post about the last paragraph of Charles Dickens' will.  Apparently the famous author had no desire for an expensive or over the top funeral -- a simple, private, and discreet burial was desired.

Oh how times have changed.  Today no lawyer would allow a client to write burial instructions into a will.  Why?  Wills are not instruments of speed, and once a final breath is exhaled, the modern day funeral process is speedy.

Here in Wisconsin, once a person has died, the power of attorney for health care ends.  Last breath, no authority exists under the document.  A will may appoint a Personal Representative, but that process can take several days if not weeks to complete.  And in that interim a funeral and burial occur.  My fix for clients is to give them Wisconsin's Authorization for Final Disposition form.  Created by the Department of Health Services, it is a free form that allows someone to nominate a person to be in charge of funeral and or burial as well as two back-ups.  In addition to naming names, directions can be given.  Cremation, burial, religious, non-religious, which cemetery, etc.

Dickens' literary work is timeless, but his will is a relic of the past.

Illinois Resident Leaves Estate to 80s and 90s Actors

Here is a common discussion I have when first sitting down with clients.

Me: If you die, who would you like to inherit your assets?
Client: Well, I'm not married and I have no children, can I leave half to my friend and the other half to my college....is that okay?
Me: Yes, of course you can do whatever you want.  This is about taking control.

And now I have a great example to offer as an illustration.  Recently an elderly Illinois man died.  He had no spouse, no children, but he left a will in which gave the bulk of his estate (approximately $1 million) to two actors from the 1980s and 1990s -- Kevin Brophy and Peter Barton.  The will refers to them as friends, but personal papers show that the deceased was more of a fan than a friend.

So there you have it, with a will you can pretty much leave your estate to the person(s) of your choice.  Exceptions may sprout up if you are married, but for the most part, a will is taking control and telling the court what you want to happen.

As I finish typing I wonder if I'll ever have the good fortune to handle a probate in which a star is named, if so, I'd be giddy if it were George Clooney!

Identity Theft and Tax Time

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Waiting in my email in-box this morning was a message from the United Way of Dane County.  A weekly newsletter, it often contains usual information to my legal practice.  The top story shared news that the IRS is cracking down on identity theft this year, in conjunction with tax season.

Apparently, identity thieves steal a Social Security number and then file the 1040 before the tax payer does. The hope is that they'll collect the refund before the well meaning citizen.  The article includes tips on keeping the number safe, etc.  Reading it, two additional thoughts came to my mind, based on my experience with estate planning.

First, never create estate planning documents that contain your Social Security number.  Historically the number was included on powers of attorney as well as wills.  Occasionally I will see one of these filter through my office, created long before I entered practice.  Immediately I advise the client to create new documents.  Why?  Upon illness or death the forms are shared, and with a will, it is filed with the court.  It can become a public document, and that makes it oh so easy for a thief to steal a number.

And second, don't forget to protect EINs assigned to an estate.  Like a Social Security number, and EIN is distributed by the IRS as a unique number for tax purposes to estates, business, and other entitites.  Estates can actually generate income (sale of stock, home, interest earned on investments, etc), and must file a tax return if over a certain amount (usually $600 per year).  Just this morning my jaw dropped when reviewing an estate inventory filed by a personal representative prior to the family hiring me.  Smack dab at the top of the page is the estate's EIN number.  Yet another opportunity for a thief to steal the number, file a return, and walk off with a refund rightly owed to the estate.

Lessons to take from my post -- review documents previously created to make sure sensitive information is not included, and treat an EIN just as you would a SSN.  Thanks for reading, and remember, a blog is not a lawyer.  Please consult with an attorney in your state for advice specific to you situation.

Issues With the Word Issue in a Will

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The question "what does issue mean in a will" is the number one query that brings people to my blog.  A fact I know thanks to analytics.  As you can see from earlier posts, within the context of a will or other estate planning documents, "issue" refers to your lineal descendants.  That means your children, grandchildren, etc.

Lawyers may use the word issue to capture any future born offspring, but one needs to use the word with caution. Consider this example:

• A single women who has 3 children and 1 grandchild writes a will;
• If she wrote "I leave my estate in equal shares to my children" then each child would inherit 1/3 of the estate at her death (assuming the children are all still alive); 
•  If she wrote "I leave my estate in equal shares to my issue" then the estate would be split in 1/4, with a forth going to each child and a fourth going to her grandchild.  There is a difference depending on which word is used.

As an attorney I use the word issue more in the context of developing contingency plans.  It comes in handy when planning for grandchildren that have yet to be born.  

And when planning for issue, one should consider if they have issue with their issue inheriting outright.  Factors to consider are:

• age -- are the heirs minors?
• impulsive behavior -- even if issue are adults, will they blow an inheritance in a weekend?
• special needs -- does one of your lineal descendants have a special need, such as down syndrome, for which they receive government health care?  If so, a direct inheritance may be problematic

Those are three issues that often arises when I speak with clients about their issue.  And they are worth a few moments of thought.  Creating a will or trust boils down to control, and through this process you can take control of what, when and how issue inherit.

Thanks for reading, and as always, please remember a blog is designed for educational purposes.  A blog post is not legal advice.  Please consult with an attorney in your state for advice 

Madison Event: Women's Heart Health - Wine, Foods, and Friends

Heart disease is the leading killer of women in America.  I know this fact, and have focused on it for over 20 years.  Knowing that my mother suffered a heart attack at age 47, which she survived, but followed with decades of cardiac medications, treatments, procedures, and more.  I do not want to follow in that path, and make heart healthy steps a part of my daily life.  And oh how I wish I could attend an upcoming event, but a conflict with a client meeting will keep me away.  However, if you are free, the evening of February 26th and are in the Madison area, you may want to sign up:

• Tuesday, Feb. 26th, 6pm
• Meriter Women's HeartCare presents Ladies Night Out
• Olbrich Botantical Gardens
• Catering by Bunky's Cafe
• Presentations over dinner on keep women's hearts strong and healthy.

Death and Taxes

January has now passed, and like many households around the country we have a stack of "tax papers" on the dinning room table at my home.  We all know that April 15th is approaching, and that means a flurry of numbers, forms, envelopes, and addresses to the IRS.

But the "living" are not the only ones with tax matters to attend to this time of year, even those recently departed have papers the IRS is eager to see.  And that translates into a responsibility for the deceased's personal representative, trustee, and or trusted family or friend.  Yes, even death does not release you from the income tax deadline.

Examples usually help drive home an issue.  Here is one from my own life.  My father died on September 18, 2009.  So, we had to make sure a final Income Tax Return was filed for him for January 1, 2009 through September 18, 2009, AND, if his estate had earned more than $600 from September 19, 2009 through December 31, 2009, the estate would also be required to file a return.

I presented this scenario at a seminar last night and saw a few puzzled faces.  How on earth does an estate earn money....the person is dead!  Ah, but an estate can make money.  Interest on CDs, stock dividends, sale of property, stock sales, royalties, etc.

No matter how small an estate is, I always advise the personal representative to consult with a CPA to make sure no income tax or other tax issues need to be addressed.  The IRS may be slow at times, but they are not forgiving.  Due your homework and tie up loose ends.  Happy tax season everyone!

Caution: Don't Nullify an Estate Plan by Doing a Beneficiary Form

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Would you take tax advice from your dentist?  How about allow your allergist to perform your c-section?  My guess is no.  Then why take estate planning advice from anyone other than an attorney who focuses on estate planning?  Doing so can come at great risk.

The following seems to happen far too often.  Client works with an attorney to create a will and other estate planning documents.  The papers make sure that specific desires are met.  For example, creating a trust for minor children, a special needs trust, or including a partner that is not legally recognized.  All is signed, dated, and complete.

And then the client goes to see his or her banker, financial planner or insurance agent.  Giving them the benefit of the doubt, they are likely attempting to help this client.  But in the end they give legal advice, and that advice is usually inconsistent with the estate plan.  In the end the client will complete beneficiary forms that run contrary to the terms of a will.  And in America, a beneficiary designation trumps the bequest in a will.  In the end the client's wishes go unfulfilled.  Imagine the following:

• In a second marriage the client designates a brokerage account to her children from her first marriage, however, her broker has her fill out a TOD card naming her second husband, stating "it will cut down on probate costs".  True, but now her second husband inherits, not her kids, and he can do as he pleases with those funds; or
• A will creates a trust for minor children, to be managed and held until the youngest is 35.  When completing the beneficiary form for life insurance, the second beneficiary listed are the children, not the trust.  If the parents dies, the money will pass to the children, and not have the protection and control of the trust.

Yes, lawyers cost money.  They use lots of legal terminology.  But they should have the big picture in mind.  When I work with clients I provided a letter of instruction on how beneficiary forms should be completed to work with the estate plan, not against it.  Still, when a client walks out of my door I cannot monitor every paper they fill out for insurance, retirement, etc.

Complicated Questions, Simple Answers, and Dr. Seuss

Recently I had the pleasure of admiring the book Dr. Seuss: The Cat Behind the Hat - The Art of Dr. Seuss by Caroline Smith.  As the parent of young children, Dr. Seuss is a frequent author I select for bed-time stories.  This book is more for adults, with interesting information about the man behind the legend as well as an amazing display of his art work.  Already I want to purchase several pieces to hang at home and at work!

The one thing I did not expect to find when looking at the book was a quote relevant to my work world - illness, death and taxes for the middle class.  Yet I did.

"Sometimes the questions are complicated and the answers are simple." - Dr. Seuss

Commonly I am asked by clients "I want certain things to happen when I am gone, and I probably need a trust, right?"  Many times they are surprised to learn that I think trusts are over used, creating far more complication than needed.  I actually prefer a simple will if it meets the needs of the client.  Yes, the questions raised in estate planning can be complicated, but a simple will is often the answer.

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

Wear Red, Eat Healthy Today

M. Gustafson Gervasi and family at the 2012 Annual Heart Walk, Madison, Wis.

February first is Go Red Day thanks to the American Heart Associations efforts to increase awareness about the seriousness of heart disease for all Americans, and women especially.  In addition to sporting red gear today, feed yourself a heart healthy meal.  When not practicing law I can often be found in the kitchen, preparing meals that I write about on another blog, Frugal Upside.  Here is a link to a weekly favorite in our home, Split Pea Soup.  Full of fiber and protein, plus it costs a few dollars to make a huge pot.  Perfect for Go Red Day, and a cold February evening in Wisconsin.

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