Thursday, December 19, 2013

Heirs In Dispute - Sweating Over the Small Stuff

Sibling closeness I, as a mother and estate planning attorney, seek to preserve.  Take control and let them know your wishes.  If not, unpleasant disputes tend to arise.

As the mother of two young children and as an estate planning and probate attorney, I can tell you that the "stuff" in your life is most likely to ignite sibling rivalry when you die.  From jewelry to collectibles to hunting gear -- the items that hold little to no monetary value often ignite the most intense disputes when a loved one dies.

And apparently leaving tangible personal property, what we in the legal practice call your TPP, is the number one thing Baby Boomers care about leaving at death, not money.  Who gets what, that is the essential question.  When I work with my clients documents generally say "I may create an inventory form the disposes of my tangible personal property", if so, the personal representative is obligated to distribute accordingly.  And then I add to the conversation, be specific as possible, envision having to give a stranger directions to find said object.  Glossed over in the Wall Street Journal article, this is key.  When you say "I leave my ring" the attorney in me wonders: which ring, and where is it kept?

Facing your death is not easy for anyone.  But if you are a parent and or grandparent, and you want to preserve the relationship between your children, considering making these decisions and doing the necessary work.  I have seen two brothers who will never speak to one another again because of a chest of drawers, and another client told me "I have cousins who don't speak because of Hummels".

Take control, say what happens, be specific, and work with an attorney to make it legal in your state. Remember, a blog is not a lawyer or legal advice, and should not be relied upon.  It is educational and designed to spur the thinking process.

Tuesday, December 17, 2013

Staying Out of Probate in Wisconsin

The Badger State (aka Wisconsin) is known for many things: die hard Packer fans; cheese; cows, just to name a few.  Low taxes are not something Wisconsinites associate with this verdant state in the heart of our country -- especially at the moment when property tax bills arrive in mail boxes.  But in the area of probate, we rank towards the bottom.

Here in Wisconsin the fee (or tax) assessed on a probate is 0.2 percent. That is zero point two!  In other states it is as high as 8 or 10 percent.  The fee is assessed on the total inventory of a probate estate, things outside of probate are not subject to the fee.  Even though it is quite low when compared with other venues, routinely I receive calls on "how to avoid probate".  There are options:

  • Give it away during life.  If you do not own it at death, the tax does not apply.  This can be tricky on several levels.  One, you do not know how long you will live and cannot be certain how much you can afford to give away.  Two, the giftor is responsible for paying the gift tax if the gift exceeds the limit set by the IRS (currently $14,000 per person per year, some exceptions allowed).  And third, if you give it, you cannot control what someone else does with it.  This last one is hard for people to accpet, once it is gone, it is gone;
  • Fill out Direct Transfer forms. If the asset has a label that says "it goes to my daughter upon my death" it goes to her, outside of probate, no matter what a will might say.  The transfer is direct, avoids the probate fee, and is usually faster than probate (which can take up to a year or more to be complete). These labels can be placed on: life insurance, retirement accounts, bank accounts, real estate (via a transfer on death deed); and brokerage accounts.
  • Create a Trust.  The granddaddy of avoiding probate is the living revocable trust.  Essentially a wicker basket designed to hold assets during your life, and then distribute them to beneficiaries sometime after you have died.  This direction avoids the probate process, but requires the creation of a trust, accomplished through writing a trust agreement which addresses who is in charge, what they can do, etc.  And it requires the title to the asset be changed to the name of the trust.  If not, the asset is not in the trust. More clients than not find this process too daunting, and opt for probate and its fee instead.
The creation or update of a will, trust or other end-of-life documents can become complex quickly.  And it is not always a large net worth that creates complexity.  Second marriages, cabins, and family members with special needs create challenges.  A blog post is not intended to be legal advice, and should not be relied upon.  Please use this as educational material, and seek legal advice from a licensed attorney in your state. Thanks for reading!

Monday, December 9, 2013

Control and the Estate Planning Process

Looking for motivation to face the question of your illness and or death?  Look no farther than the word "control".  That is what I tell audiences when I speak on the topic of estate planning.  It's about taking control.  If you do not, you are leaving key decisions to be made by someone other than yourself.  For some, this is what they need to hear to plow forward into writing powers of attorney and a will.  For others, no amount of prep talk will work, giving rise to the yin and yang of estate planning.  For every person resistant to completing papers, there is a loved one urging them on.

No matter how eager a loved one may be for you to complete your estate plan, they cannot force it to be done.  Over the weekend I spoke at our church and referenced the fact that we are assisting my mother with some stressful health issues.  Afterwards another member approached me about being in the "sandwich generation" and wondered what she could do to urge her aging parents to complete an estate plan.  "Not much" was my answer.

The control lies in the client, not the client's loved ones.  Often I field calls from concerned adult children, seeing a train wreck approaching: The confusion, the disagreement, the stress, the loss of time and money -- it is all headed their way.  Just as they cannot hop on a runaway train and become its engineer, they cannot force aging parents to complete useful paperwork.  What they can do is brace for impact.  Think worse case scenario and plan.  Things to consider:

  • what do the laws of the state the parent lives in allow for guardianship?  That is the process we often turn to when powers of attorney have not been done or are out-of-date; 
  • find an attorney you want to work with now, and have his or her number ready if and when needed; and
  • read about working with loved ones on how to make difficult decisions on health, finances and end-of-life issues.
And really, that is about it.  Brace yourself.  The crash may never happen.  There may be documents in place, but you just do not know about them.  But remember, the control in estate planning lies in the client's hands, not the loved ones.  

Thanks for reading, and remember a blog is not legal advice and should not be relied on.  Please consult an attorney in your state (or that of a loved one) for advice specific to your situation.

Friday, December 6, 2013

Seminars on Wills, POAs, Trusts, Probate and more - Dane County, Wisconsin

Lawyers are suppose to give back to their communities, and one of my favorite vehicles for meeting this obligation is to provide free, education seminars on the topics of wills, powers of attorney, trusts, probate and related issues.

My speaking engagements for 2013 have come to an end, but there are already several for 2014 on my calendar.  Most are two hours in length, sponsored by a local nonprofit entity, and are free and open to the public.  Take a look, sign up, and start the new year informed and in control.  Details are posted on the events page of the firm web site.  Click here for a link.

Tuesday, December 3, 2013

Middle Class Philanthropist and #GivingTuesday

Middle Class Philanthropist

Today marks the 2nd annual #GivingTuesday, an international effort to encourage people to give back during the holiday season.  In celebration of this nonprofit fundraising spirit, I will be holding my first ever book reading of Middle Class Philanthropist: How anyone can leave a legacy.  Join me at 6:30pm, Mystery to Me books on Monroe Street here in Madison.  There will be hot cider, cookies, and charitable inspiration!

If you cannot make it, check the book out on-line by visiting the publishing web site, Goodreads, or various on-line book sellers.  Everyone can make a difference, and it is the size of our hearts that matters, not our wallets.