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A recent post discussed the importance of having a power of attorney for finance in place in regards to dementia. On the flip-side, many families overlook the importance of powers of attorney for their college aged children. Once a child turns 18 he or she can vote, marry, or sign up for the army – and they also become a legal stranger in many ways. No longer may you as the parent be able to access their grades at school, and in some states, you will not be able to make health care and or financial decisions for them without a court order. As you help your child pack and prepare for college, you should also take some time to learn about the requirements for powers of attorney in the state where your child will be a student. And encourage your child to take the time to complete some basic paperwork nominating who in the family should take charge if an unlikely accident or illness occurs.

The September 2008 edition of Smart Money Magazine offers an article entitled Vanishing Legacy, which discusses the implications dementia may have on a person’s investments. While dementia is commonly associated with mood swings, memory loss, and confusion, another side effect that is not as readily recognized is a sudden inability to make sound financial decisions. One family profiled ended up with the daughter going to court, fighting for several years to prove her mother’s incapacity and seeking guardianship over her mother’s finances. While eventually granted, the older women lost approximately $1 million of her life savings due to risky investments. The article emphasizes that brokers, unlike financial advisors, are not held to a suitability standard when working with clients. Never knowing when dementia may or may not strike (one person profiled had early onset Alzheimer’s disease at age 48), it may be wise for people to complete powers of attorney for finance. These forms al...

The “death tax” or estate tax as it is more appropriately called, has been apart of American society since 1916, when the federal government began taxing estates in order to prevent the concentration of wealth within families. The tax is levied on estates that exceed a certain value. It is important to note that there is the federal estate tax, and in some instances there is a state estate tax as well (Wisconsin’s estate tax ended on 12-31-07, however, it may return in the future). Technically, the tax is assessed on an estate upon death if the estate’s value exceeds a certain threshold. As a result, the estate will pay the tax, reducing the amount your heirs inherit. However, not every estate pays the tax. If your estate is below a certain amount, it is considered “exempt”, and no tax is owed. In 2001 Congress passed a law causing the exemption amount to change over time: in 2003 the exemption amount was $1 million, it increased to $1.5 million in 2004 and 2005, and increased ag...

News out of Italy once again aims a spotlight on how a person can express his or her feelings about being kept alive if they fall into a vegetative state. Just like Terry Shivao’s case, this young women appears not have had the appropriate paperwork in place. In Wisconsin, a person can complete a “living will” otherwise called a “declaration to physician” indicating his or her preferences about feeding tubes and other means of artificially prolonging life. Without such a document, the stage is set for disagreement and court fights. Estate planning is about making sure your wishes are followed. By completing a “living will”, you can assume control of the situation, speaking through paperwork even when you are not able to verbally communicate. As this story, and too many others illustrate, no one is ever too young to ignore this important issue. Take control, and let your wishes be known.

A recent comment posted to my piece on understanding probate asked if Pay-on-Death cards should be used to avoid probate. The answer, in keeping with legal tradition, is that it depends on the situation. Pay-on-Death (POD) or Transfer-on-Death (TOD) cards are types of a beneficiary forms, that when complete, make an asset non-probate. A POD is usually associated with banking accounts (savings, checking, money market), and a TOD generally accompanies a brokerage account. Upon the account holder’s death the asset will pass immediately to the person(s) listed on the card, avoiding probate. Advantages of PODs and TODs include an immediate transfer, whereas probate may take 12 to 18 months or longer. Also, by avoiding a probate transfer, the recipient is not responsible for the probate fee. Two points of caution. First, a POD or TOD card may not provide ample room for contingent beneficiaries. And second, it is wise to have some assets remain under probate because money will be needed to pa...

Probate is one of those words that tends to strike a cord of fear in people, however, that does not have to be the case. Through some basic knowledge, the mystery and fear surround the probate process can fall aside, leaving people feeling knowledgeable and empowered. Blacks Law Dictionary defines probate as the legal process by which the estate of a decedent is administered; generally it involves collecting assets, paying liabilities and taxes, and distributing the remaining property to the heirs. Key points to keep in mind when facing probate are: A will facilitates probate by telling the court how you want your assets and affairs handled upon your death – a will does not avoid probate; Probate applies only to your “probate property” – which is anything you own that does not have a clear designation on it about who should receive it upon your death. Common examples may include your savings account, home, and or car. Probate does not apply to your “non-probate” property – which ...

Are you a collector? Whether it is contemporary art, 19th century furniture, first edition books, or comics, your collection should be included in your estate plan. To learn more about the issues surrounding planning and maintaining your collection, I’d recommend the book Life is Short, Art is Long: Maximizing Estate Planning Strategies for Collectors of Art, Antiques, and Collectibles by Michael Mendelsohn & Paige Stover Hagu. Recently I wrote a review of the book for the Wisconsin Lawyer Magazine . Aimed at the collector instead of the estate planning attorney, the book discusses many issues, including heirs removing items before probate is finished, benefits of donating pieces to a museum, and the importance of appraisal. As a collector, you obviously have a passion for a certain genre. Through a little planning and effort, you can make sure that passion lives on beyond you.