5 Overlooked Items To Include With Your Estate Plan

5 Overlooked Items to Include with your Estate Plan

By Melinda Gustafson Gervasi

October 11, 2021

Estate planning is the act of taking control of paperwork related to illness, death and taxes.  The obvious documents include things such as a power of attorney for health care, durable power of attorney for finances, beneficiary forms, a will, and sometimes a trust.  If you are looking to have an well organized plan that offers easy access to documents to ease the burden of your final affairs on your loved ones, consider including the following with these otherwise obvious documents:

1. Copy of your state and federal income taxes for the past 3 - 5 years.  The include information on your accountant and assets that generated a loss or gain that may not otherwise be found;
2. Deed to your home, cabin, or other real estate.  The deed will be needed at some point during the handling for your affairs, and finding it now allows you to review the wording to confirm it says what you think it says.  For example, is the cabin you inherited from your mom in your name or your name at that of your spouse?  That wording may or may not cause problems for your surviving spouse;
3. Copies of your health, disability, life, and burial insurance.  Having copies of these documents provides the person/entity handling your estate with documentation of what your policies did and did not cover;
4. Instructions on personal possessions that may not be of obvious value to your loved ones.  For example, my husband is a hardware electronics engineer with an entire work area full of gadgets.  I've paid enough attention to know some of those instruments can be worth tens-of-thousands of dollar.  Yet, I know that if I were grieving his untimely death I may not have enough mental recall to know which ones were and were not worth any significant value.  What possessions might you have that would be worth the time and effort to liquidate but not be obvious?
5. Copies of beneficiary forms for your retirement and other investment accounts. Beneficiary forms are essentially a contract between you, the owner, and the company that holds and manages your asset, stating where it will go upon your death.  When you maintain a copy of the form there is proof in your records of where you designated the asset to pass upon your death.  When you fail to maintain a copy of the form, you are leaving it up to the company to document its existence.  Mistakes can and do happen.  One too many times I have seen a loved one struggle with the fact a beneficiary form for a life insurance policy cannot be found and it is distributed in a manner that contradicts what the loved one had been told.  

Image by M. Gustafson Gervasi, 2021

Thank you for reading.  Remember that a blog is not legal advice, but rather a tool to spark discussion and conversation.  Please seek legal counsel from an attorney in your state of residence for advice specific to your situation. 

Estate Planning: develop a comprehensive list of your assets

Estate Planning: develop a comprehensive list of your assets

By Melinda Gustafson Gervasi

May 24, 2021

Frenzied frustration, that is how I describe the adolescent emotions evoked when I played Whack-A-Mole at the Dane County Fair or random arcade.  Armed with a black mallet, the goal was to whack moles randomly popping up out of the half-dozen or so holes.  You would hit one another another would taunt you from the corner of your eye.  It was frenzied.  It was frustrating.  Yet, I loved that game and the challenges it presented.  Today as an estate planning and probate attorney that feeling emerges in each and every probate I assist with.

Frenzied because someone has just died and the surviving family and/or friends want to move quickly to "take care" of things.  Sometimes a large family is all together for a funeral or memorial service, combining that event with cleaning out the deceased's home.  Grief, memories, surprise, and confusion hover overhead while the Personal Representative (Executor in other states) attempts to get a handle on the finances.

Frustration soon arrives on the scene.  Banks refusing to release any information on the deceased's accounts.  Credit card companies demanding court authorization before turning off a cell phone.  Combing through old tax filings and statements, people find false leads on what is a current asset that were sold long ago. 

Grieving the death of a loved one will never be easy.  However, a bit of organization in your own financial life may reduce the number of Whack-A-Mole moments your Personal Representative or Executor will face while the handle your final affairs.  Start by stacking stock of what you own, everything you own, and record it in a format that can be easily accessed.  My personal favorite is a three-ring binder that holds everything related to Illness, Death and Taxes behind tabs.  Here is a check list for assets you might overlook:

• Checking account(s)
• Saving account(s)
• Money Market accounts
• Certificate of Deposits
• Life Insurance policy
• Disability Insurance if it has a death benefit
• Digital currency and where it is held
• Business formation documents, such as LLC, LLP or S-Corp agreements
• Brokerage Accounts
• Retirement Accounts (IRA, 401K, etc)
  
• Pensions plans with a death benefit
• Deeds to your home, cabin, farm, etc.
• Title to your vehicle(s) and or boats
• Long-term care insurance with a death benefit
• Custodial or UTMA accounts set up by you for minor children
• 529 plans or other college specific saving vehicles
• Royalties for published works
• Health Savings Accounts
• Stocks 
• Savings Bonds
• Valuable hobby or professional equipment
• Contents of a safe deposit box (i.e. valuable coin collection)

Did I miss something?  Please leave a comment if you have an asset to list that I missed!  

Thank you for reading.  Remember, a blog is meant to spark thought and discussion; it is not legal advice.  Please consult a licensed attorney in your state of residence for advice specific to your situation.

Visions of Time Shares Dancing in Your Head.....Probate and Time Shares

Image by M. Gustafson Gervasi, 2013

As visions of sugar plumbs danced in their head........a classic line from a classic book I've been reading over and over again to my young children over the holidays.  And as a polar vortex sweeps over my hometown of Madison, Wisconsin, I am certain many of my fellow residents have visions of warmer climates in their head.  And with it, the temptation of the time share.

Often billed as an affordable way to own a place in paradise, with the common benefit of trading rights in other locations, I see a fair number of estates with a time share asset.  Whether you a creating your own estate or handling the affair of a loved one who has passed, do not overlook the time share!

Time shares are generally considered a real asset, something someone owns.  Meaning it can be sold or bequeathed.  Earlier this morning I assisted a former client who inherited a time share.  Selling it has proved anything but easy.  In our exchange I gave him the name and number of what other attorneys have described as a reputable time share broker. Yes, there are professionals out there who specialize in selling time shares!

In my research, I also came across an excellent consumer guide to time shares, put together by the Federal Trade Commission.  The language is simple and to the point, with excellent practice tips for those considering buying a bit of paradise or for those looking to sell.  The point that stood out the most to me were making certain you understand the fees involved at both purchase, maintenance, and sale.

Please note that a blog is not legal advice, and should not be relied upon, but rather to stimulate thought and discussion.  It is essential that you consult an attorney in your state for advice specific to your situation.  Thank you for reading.

What Does Tenants in Common Mean in Estate Planning?

Tenants in Common is one of several ways in which a person can hold title to property.  Another would be joint tenants.  A key feature of Tenants in Common for estate planning purposes is that the heirs of person with a tenants in common interest will inherit (unless of course a will states otherwise) as opposed to the other tenant(s).

Image credit: www.sxc.hu - free image

For example, if Harry and Sally own a home as tenants in common, and they are not married, upon Harry's death his heirs will inherit his ownership interest, not Sally.  Of course, exceptions can and do exist.  So it is wise to consult with an attorney and not rely on a blog....this is not legal advice.

It never fails, several times a year I have clients who are amazed to read the deed to their home and discover phrasing such as tenants in common.  Even if married, the interest would have to pass through probate to go to the spouse.

What Is A Transfer on Death Deed?

Regular readers of my blog know that I am devoting the entire month of February to translating legalese into English.  Today's phrase is "transfer on death deed".  It is a deed for real property (home, cottage, vacant lot) that states who should receive the property upon the owner's death.  In plain English that means when the owner dies, it gets transferred to the person(s) listed, and that transfer occurs outside of probate.  It will cost less and occur much faster.

What is the drawback of a TOD Deed?  First, Transfer on Death Deeds are not available in all 50 states.  They came to Wisconsin in 2006, and exist in about a dozen other states (see a previous post for a listing).  TOD Deeds do not allow for contingent planning.  Essentially you cannot say I leave this to Sue, and if Sue predecease me then to Tim.  Finally, TOD Deeds require you to list people.  You cannot list a class of people, such as "my children".

TOD Deeds offer a nice alternative to the traditional living revocable trust, which historically was used to transfer homes outside of probate.  However, TOD Deeds are far less expensive and cumbersome to use.

If this sounds appealing, contact a lawyer in your area to see if the option is a good one for you.  Remember, a blog is just a blog....it is not legal advice.

Photo credit: www.sxc.hu - free image

States With Transfer on Death Deeds

Transfer on death deeds are a great alternative to living revocable trusts in that they allow you to leave real estate outside of probate. One draw back is that you must name specific people, not a class, and there is no contingency planning. Either way, they are worth a closer examination if they are an option in your state. According to Nolo.com, the following currently offer Transfer on Death Deeds:

• Arizona;
• Arkansas;
• Colorado;
• Indiana;
• Kansas;
• Minnesota;
• Missouri;
• Montana;
• Nevada;
• New Mexico;
• Ohio;
• Oklahoma; and
• Wisconsin

Remember, blog post is not legal advice. Please consult with an attorney licensed in your state for advice specific to your situation.

Real Estate Transfer Form and Fee

Recently I worked with some return clients who wanted to adjust the deed to their home. It was listed in both names, but as an unmarried couple and without the phrase "right of survivorship", the house would be subject to probate upon the first person's death. So, they opted to re-title it "joint tenancy with the right of survivorship". A quick call to the Wisconsin Department of Revenue confirmed that simply re-stating how title is held does NOT trigger the need to file a Wisconsin Real Estate Transfer Form and Fee; there was no actual conveyance and it was exempt. My overall point? Check with Wisconsin DOR before adding or adjusting names on a deed....you want to make sure you are not missing a filing fee or requirement.

As always, I advise you to obtain legal counsel from an attorney....this blog is intended for discussion and education, it is not legal advice.