Estate Planning Pro Tip: Always Have a Back-up

Estate Planning Pro Tip: Always Have a Back-up

By Melinda Gustafson Gervasi

February 19, 2024

The "back-up" lunch bags

Oftentimes what prompts a client to schedule an appointment with me is either a Stage 4 cancer diagnosis, the death of loved one that caused a chaotic mess they wish to avoid for themselves, international travel from which a fear of our own mortality rises up enough to make someone want a will, or it is simply a New Years Resolution.  Rounding out the Top 5 motivations I've noted to prompt a client to create an estate plan is the birth of a child.  These are some of my favorite meetings because the chances are good the couple will bring their newborn infant to the signing.  With two teenagers in my home, time with a newborn is a precious moment.

As any seasoned parent would, I will offer the new parents a tip or two.  I avoid the rote advice of "sleep while you can" for those meeting with me prior to the birth or "sleep when the baby sleeps" for those with a bundle in their arms.  Instead I offer the idea of "always have a back-up".  Whether it be winter boots, a lunch box, or the industrial sized peanut butter jar, my kids will tell you "mom always has a back-up".  I attribute this to my slightly over-the-top Type A personality and a strong disdain for the last minute scramble.  The word planner is literally in my job description.  At home I plan for the day the child leaves their winter boots at after school camp or the lunch box will be overnighting the school lost-and-found.  It will happen, it is a question of when.  And when it does, I pull out the back-up.  Now my back-ups are likely to be utilitarian, often a handy-me-down from a neighbor or a thrift store find. My frugality is about as strong as my planner behavior.  But, my mornings tend to be less chaotic and more calm with backups.  The back-up may not be perfect, but it gets the job done. This same approach works at the office.

A client will tell me, I want my daughter to be my agent on my healthcare power of attorney.  "Great" I respond, "and if she cannot act, then who do you wish to name?"  On and on I will ask this question for the various roles you appoint people to when creating an estate plan. If you are taking the time to create an estate plan, go the extra mile and make sure you have your backups in place.  You'll likely sleep better at night and avoid a scramble.

Thank you for reading, please share this post on social media if you found it helpful.  Remember that a blog is not legal advice, but a means to spark thought and reflection. Always seek the counsel of an attorney licensed in your home state for advice.  Be well!

Lesson from Grey's Anatomy: Revolutions Don't Schedule Appointments

Lesson from Grey's Anatomy: Revolutions Don't Schedule Appointments

By Melinda Gustafson Gervasi

February 12, 2024

Author's Hoodie -- a Christmas gift, with a touch of cat fur from Law Cat

Confession time, I am one of the fifteen to twenty million loyal viewers of ABC's hit, Grey's Anatomy.  I find the characters' intensity and devotion to a career that must keep learning after the graduation hats are tossed to be similar to my field, the practice of law.  Rarely does an episode cause me to slip into thinking about work; it has proven to be a wonderful way to relax on a night or weekend.  However, recently while watching an episode in Season 17, I found myself nodding when Dr. Richard Webber made a statement to Dr. Jackson Avery -- "Son, revolutions do not make appointments".  The character was commenting on the Black Lives Matter movement that was a part of the show's storyline.

I nodded because I thought to myself "nor does a medical crisis make an appointment".  In my field of estate planning and probate administration I can tell you that the scenarios in which your powers of attorney or will are needed rarely feel planned.  Even for those with a chronic or terminal condition, health events evolve quickly and often erratically.  The lesson I offer from this show is to make an appointment now, during the calm period of life, to create or update your estate plan, which consists of: powers of attorney, a will, and in some cases a form of a trust, as well as documents stating who can make your burial and funeral arrangements. 

While you may be able to complete this task on your own, hiring an attorney to help you cross the finish line may be a smart move.  For many people hiring an attorney is an unpleasant an daunting task.  Rather than leave it up to a Google search, consider these options to help you find someone you trust to help ease the burden:

1. Ask family and friends who live in your area if they had an attorney they worked with.  If they did and it was a positive experience, they'll be happy to share the contact information. And if they had an experience they hated, they will say so as well;
2. Get a referral from your CPA, financial planner or banker.  Likely this professional in your life will have the name of an attorney who operates in a similar fashion, increasing your chances you will enjoy working with the lawyer; and
3. Research the attorney to see if they will be easy to talk with.   See if you can get a feel for how they communicate and what they value.  When it comes to estate planning you will need to speak freely about your family dynamic, health situation and financial position in order to get the most sound advice.

Thank you for reading.  Remember that a blog is not leave advice.  Please consult with an attorney licensed in your home state for advice specific to your situation.  If you have found this helpful, please share it on your preferred social media.  You can also enter your email address above (upper right corner) to receive future posts. Be well!

What to Tell Your Personal Representative: the 4 Ps

What to Tell Your Personal Representative: the 4 Ps

By Melinda Gustafson Gervasi

February 5, 2024

Image by M. Gustafson Geravsi, 2024

Weekly clients express a desire to make sure taking care of their final affairs is easy for the Personal Representative (known as an Executor in other states). Wishes are achieved by taking action.  Here are the 4 "P"s I recommend sharing with your Personal Representative to ease the process when you earthly time comes to an end:

1. Personal Data -- include the basics such as Date of Birth, Social Security Number, dates of marriages, divorces or spouse/partner deaths as well as your religious affiliation, educational achievements and family tree.
2. People -- who should be contacted upon your death?  With many people using cell phones the white pages of yesteryear are gone.  Provide up-to-date cell phones, addresses and email addresses.  Include the obvious close family and friends as well as those people you rely on: childcare provider, pet sitter, employer or employees, housekeeper, lawn care service, accountant, attorney, and financial planner.
3. Pets -- Approximately 66% of American households have a pet.  Leave information relating to the veterinarian, food needs, pet sitter, and who can care for the animal(s) for both the short and long-term care needs.
4. Professional Duties -- for those still in the workforce or with active professional credentials, leave information related to professional organizations you belong to, a list of professional insurances you carry, banking and financial information related to your work duties, and social media accounts used for work purposes (such as LinkedIn).

Whether it is a yellow legal pad, a spreadsheet, or a new ap for your phone, taking the time to organize these key aspects of your life will make the process just a bit easier for the person(s) charged with handling your final affairs.

Thank you for reading.  Remember that a blog is not legal advice.  It is meant to spark thought and reflection.  Please consult with an attorney licensed in your home state for advice specific to your unique needs.  Be well, and please feel free to share this post on social media! 

Word of the Month: Ancillary Probate

Word of the Month: Ancillary Probate

By Melinda Gustafson Gervasi

January 29, 2024

Image by M. Gustafson Gervasi, 2024, Geranium on the Windowsill

The following is a hypothetical situation, it is not based on an actual client experience.  It is a story meant to illustrate an issue common to estate planning.

The death of a loved one is never easy.  Processing the affairs of a recently deceased loved one in January, specifically January in Wisconsin, is a very difficult task.  Recently the adult child of a former client of mine made their way through the snow and slush that mother nature dumped on my hometown of Madison, Wisconsin, and arrived at my office.  Once their winter parka, hat and gloves were nestled into the coat tree in my waiting area, we sat down at the conference table to discuss "next steps".

Papers were pulled from color coded files the child had gathered from their parent's home.  There was the title to the Toyota Prius, copies of recent IRA Statements, printouts from the bank where savings and checking accounts existed, the deed to the house.  The pile contained last year's income tax filings, a property tax bill due any day, and credit card statements.  And at the bottom of the stack of paperwork we found a deed for land in Michigan.  "Oh, that is the cabin -- my grandfather built it by hand, and left it to my mom when he died in 1973."

My conversation with the child now veered into the topic of "ancillary probate"; the cabin is over the border and in a different state. Oftentimes the Personal Representative (or called an Executor in other states) discovers the deceased person owned property held in another state.  For example, a lake home, cabin, recreational land, or a boat docked in warmer waters. In this specific situation, the child would need to open a Wisconsin probate, which would handle the transfer of nearly all the decedent's assets.  However, the cabin owned in Michigan would need to be transferred under Michigan law -- creating what we call an ancillary probate.  Procedures vary from state to state, and in some cases probate can be avoided if the state has a "small estate" method for avoiding probate on lower-value assets. The web of final affairs became a bit more layered with land owned outside of Wisconsin, but a path did appear.  And now the child as well as you the reader have expanded your vocabulary to include an understanding of "ancillary probate".

Remember that a blog is not legal advice; it is a means to spark thought and reflection.  Please consult with an attorney licensed in your state for advice specific to your situation.  Thank you for reading, be well!

Taxes Are In The Air

Taxes Are In The Air

By Melinda Gustafson Geravsi

January 22, 2024 

Garner Park, Madison, WI - Image by M. Gustafson Gervasi 2024

January has arrived, bringing with it artic air to my hometown of Madison, Wisconsin.  No matter where you live in America, the month of January also brings the flutter of envelopes into your mailbox, all stamped IMPORTANT: TAX INFORMATION.  Whether it be a W2 from your employer, a 1099-Misc from your investments, or a K-1 showing stock gains, many of us are gathering forms to complete our annual income tax filings.  

Taxes quickly become complicated and technical because the IRS tax code is anything but simple.  When in doubt, I also say it is less expensive to hire a CPA for advice beforehand than to hire one to clean up a mess after-the-fact.  In area of focus, estate planning and probate, there are three main taxes that come up in client meetings:

1. Income Taxes -- a tax owed on income that can be owed at both the federal and state level.  Also, when a person dies there might be income taxes owed on earnings from January 1st to the date of death, and then income taxes owed on earnings (think dividends, interest, etc) from the day after death to December 31st.
2. Gift Taxes -- a tax owed by the person making a gift IF the tax is not exempt and exceeds the limit set by the IRS for that year (in 2024 the limit is $18,000/person).  Quite often I see a child who was named as a co-owner of a parent's bank account.  The parent dies and the child becomes the owner of the entire bank account.  If that child wants to share the account with a sibling who was not named, and that share is over the gift tax limit, a gift tax return may need to be filed.  It is an unpleasant surprise.
3. Estate Taxes -- a federal (and sometimes a state tax depending on where you live) that is assessed on assets that exceed a level set by Congress.  In 2024 that limit is $13.6 million for an individual.  While this tax impacts less than 1 percent of Americans, many people harbor a fear of the "death tax".  In my everyday operations I see the gift tax surprise more people than the federal estate tax, however, I focus on working with middle class Americans.

A blog is meant to spark thought, reflection, and discussion.  It is not legal advice.  Please consult with an attorney (and often a CPA) who is licensed in your state of residence for input on your unique situation.  Be well and thank you for reading. 

Anyone Can Leave a Legacy

Anyone Can Leave a Legacy

By Melinda Gustafson Gervasi

January 15, 2024

Today our nation celebrates the legacy of Martin Luther King Jr.  Across this country parades are held, speeches are given, and banquets are held.  It seems an appropriate time to remind you that, in my opinion, anyone can leave a legacy. With a bit of reflection, strategic thinking and planning you can promote what you value.  

Image by M. Gustafson Gervasi 2024

Back in 2013 I released a small book, meant to be read in an afternoon, to teach this concept to Middle Class America.  Over a decade later key concepts remain true and the steps you can take are relatively easy.  Here are 3 easy steps you can take to leave a legacy:

1. Direct 10 percent (or any percentage) of your retirement funds to a nonprofit organization that is close to your heart;
2. Request that In Lieu of Flowers, mourners make a donation to a charity that was pivotal in your life, such as: a college, university or trade program; medical research; or mental health support.
3. Leave directions to have your tangible personal property (furniture, clothing, books, etc) donated to a thrift store that aligns with your interests (my personal favorite is the Dane County Humane Society Thrift Store).

A philanthropic life does not require you to have a seven-figure net worth.  Read more about how middle class Americans had a positive impact on the operation of a nonprofit by checking out Middle Class Philanthropist: How Anyone Can Leave a Legacy.  If you have a story to share, reach out with a comment or email me directly.

A blog is not legal advice, but a platform to promote thought and reflection.  Please seek legal advice from an attorney licensed in your home state.  Thank you for reading, stay warm (it is -2 F at Noon here in Madison, Wisconsin), and be safe.

Estate Planning: Take It One Bite At A Time

Estate Planning: Take It One Bite At A Time

By Melinda Gustafson Gervasi

January 8, 2024

There is an African saying, "What is the best way to eat an elephant?  One bite at a time".  If 2024 is the year hope to tackle estate planning but do not know where to start, I suggest you embrace the wisdom of this saying.  Creating an estate planning, or updating an out-of-date plan can be monumental and thus unattainable.  Do not be deterred.  Break it down into small steps and you will make progress.  Here are 5 small tasks to get you started:

• Create your powers of attorney to say who is in charged of your finances and or health care decisions if you are alive but too ill to act;
• Review the beneficiary forms on your life insurance and update them if needed;
• Review the beneficiary forms on your retirement accounts and update them if needed;
• Create a list of your assets and liabilities to create an easy to access map of your finances for your loved ones if you die; and  
• Write out the contact information for people that should be notified in case of your illness or death, everyone from your college roommate to your cat sitter to your accountant.

It is estimated that only 32 percent of Americans have a will or estate plan.  Go against the tide, break the work down into more simple tasks, and work towards putting together the peace of mind you will give loved ones if the unthinkable happens.

Thank you for reading.  A blog is not legal advice, but meant to spark thought and reflection.  Seek legal advice from an attorney licensed in your state of residence for advice specific to your situation.  Be well!