Earth Day and The Gentle Art of Swedish Death Cleaning

Earth Day and The Gentle Art of Swedish Death Cleaning

By Melinda Gustafson Gervasi

April 22, 2024

Regular readers of my blog and recipients of my office newsletter (click here to check out past editions) know of my interest in The Gentle Art of Swedish Death Cleaning.  Fueled in part by nearly twenty years as an estate planning and probate attorney with its visibility to how hard it is to clear out a deceased loved one's possessions as well as my general interest in all things Swedish (I attribute that to my Nordic genetics), today's post melds purging our possessions with taking care of Mother Earth. In honor of Earth Day, here are three suggestions for those looking to prune back possessions:

1. Donate an item to a museum, historical society, or local theatre production company.  My great-grandfather's wedding suit was donated to the Swedish American Museum in Chicago.  There it aids research and can be used in displays.  
2. Turn it into art!  Recently my 13 year old daughter called out to me, "Mama, why do we have a framed needlepoint above the mantle that is in Swedish?"  It's been hanging since she was about 3 years old, but only recently did she realize it was unique.  I explained that it had been created by her great, great-grandmother.  I found it crumpled in the back of the linen closet at my parents' house when I was preparing the property to be sold after both of them had died.  It was lovely, and once matted and framed, makes for a highly sentimental piece of art for our home;
3. Give it away to someone who will love it!  I did that with an old wall clock that also belonged to my Swedish grandparents.  After sitting in my basement for years, not wanted by any of my other relatives, I posted it for free on my neighborhood web site.  A neighbor and friend was thrilled to give it new life. She had grown up with a father who repaired clocks, and lovingly accepted it into her home.  I smile thinking that it was enjoyed, cared for, and not destined for the landfill.

These are just three ideas on how to purge with a purpose.  What did I miss?  Please leave a comment and share your suggestions on how to care for our Earth and keep our possessions manageable.

Remember a blog is not a lawyer, it is meant to spark thought and reflection.  Please consult with an attorney in your home state for advice specific to your situation.  Thank you for reading, and be well. 

Taxes Due!

Taxes Due!

By Melinda Gustafson Gervasi

April 15, 2024

It's Tax Day; specifically, today is the day your federal and state income tax returns are due along with any payments you owe.  I recognize that not everyone finds the tax code to be as interesting as I do, so I will take this opportunity to highlight two areas in estate planning where an income tax may be due that can be a surprise:

1. People who inherit from a Traditional IRA, 401K or other "qualified plan".  Distributions made from these types of inherited assets are likely subject to income tax by the new owner; and
2. Fees paid to a Personal Representative (also called an Executor in other states) for administering an estate through probate.

The tax code is a massive piece of law that is always changing, so it is best to seek the advice of a CPA in your home state for advice.  But do keep in mind when creating or updating your estate plan, that those you leave assets to and those you give a responsibility may owe an income tax.  Knowing this may cause you to adjust what you given and who you empower.

Image by M. Gustafson Gervasi -- power lines in Panama, a visual representation of the US Tax Code

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

Don't Let the Cart Get Before the Horse in Estate Planning

Don't Let the Cart Get Before the Horse in Estate Planning

By Melinda Gustafson Gervasi

April 8, 2024

The expression "don't let the cart get before the horse" comes to my mind most weeks at the office; clients approach estate planning in the wrong order. All too often a new client will say "I need a trust", usually because someone without a legal degree has told them they need one.  Gently I re-direct the clients to talk about their goals and wishes in estate planning.  Establish the wants first, then figure out which tool to use.  Sometimes it may be a trust, other times it may be a completely different estate planning device, such as a will or a transfer on death deed.

For example:

What is your goal of estate planning?

• To organize my affairs and keep things as simple as possible for my loved ones when I die, OR
• To shelter my assets for my minor children to ensure they have funds to get them to adulthood, OR
• To minimize any tax liability I may have upon my death, OR
• To control my assets after death so that a second spouse can enjoy them until s/he dies and then they pass to my children from my first marriage

Note the use of "or", having one or two goals is manageable and helps you steer the course while creating or updating an estate plan. Too many goals can cause a log jam.  

What financial situations might develop?

• Is there a mortgage on your personal residence or family cabin that needs to be paid off at your death?
• How will funeral expenses be paid?
• What income or property tax liabilities might you have to pay at the end of your life?
• Who will pay the income taxes on qualified retirement plans (your typical IRA for example)?

These are just a few factors to consider when figuring out where and how to leave your assets.

What estate planning tool should you use?

• Wills are instruments that tell a probate court where your assets that do not have a named beneficiary or a co-owner should go at your death;
• Direct transfers, meaning they go directly to the named be person(s) without going through probate include: trusts, co-ownership, named beneficiary, and TOD deeds (among others).

Not all tools are the same -- some are more complex and expensive than others.  Keep in mind that an expensive tool is not always best, it can sometimes be unwieldly and cause more harm than good.

As you think about estate planning, remember not to put the cart before the horse.  Think about your goals, seek counsel from a lawyer in your state that focuses on estate planning and probate, and move towards your goals with the best tool available.

A blog is not a substitute for a lawyer, it is meant to spark thought and reflection and is not leave advice.  Thanks for reading, and be well!

Horse with Cart, image by M. Gustafson Gervasi, Inishmore, Aran Islands, west coast of Ireland

Play Ball! Estate Planning and the Movies

Play Ball! Estate Planning and the Movies

By Melinda Gustafson Gervasi

April 1, 2024

Play Ball!  This All-American cry was heard from coast to coast last week as a new season of major league baseball started.  In a nod to this American past-time, I decided to watch the 1994 movie Little Big League which tells the tale of a 10 year old boy who inherits the Minnesota Twins from his grandfather.  Combine that storyline with today being April Fool's Day, and I am here to share what is likely obvious -- estate planning is not a joking matter. 

Too often Hollywood uses estate planning and probate scenarios to spin an entertaining story. However, too many people believe what they see on the big (and little) screen.  What makes for a good movie is not necessarily how the real world of estate planning works.  In the film the grandfather is portrayed as a very wealth man.  At this death, via video he "supplements" his will with a video message giving his favorite possession, the Minnesota Twins, to his favorite person, his grandson Billy.  A bit of a savant at the sport, Billy fires the unlikable manager and takes on the role himself.  The film is enjoyable, but a few glaring points stuck out to me:

1. Assets left to a minor are normally transferred to a trust, which is a tool to hold an asset until the minor reaches an age where they are mature enough to manage it themselves.  During the time the asset is "inside" the trust, a trustee manages the asset on behalf of the minor;
2. Using a video or recorded message is not likely a sufficient tool to amend a will (amending a will is dictated by state statues, for example it may need to be in writing and witnessed by two people); and
3. The film implied that the grandfather's attorney was a solo practitioner, which is highly unlikely for a high net worth client.  Given the complexity of business holdings and the potential for federal estate taxes, a large firm with a team of lawyers would most likely be advised.

I love stories and am a huge fan of the movies.  I just know not to take what they say about the law as the truth.  When in doubt, seek advice from a licensed attorney in your home state.  Thank you for reading and be well.

Word of the Month: Issue

 Word of the Month: Issue

By Melinda Gustafson Gervasi

March 25, 2024

Conjure up an image of "lawyer" in your mind and chances are high that it will have a word bubble over the image's head that is filled with lengthy yet empty legal jargon.  While the legal profession is characterized as using far too many complex words, our legal education emphasizes concise writing.  For example, the word "issue" is only five letters long, but conveys a detailed concept.

Within the context of estate planning and probate, the word issue means your "children, grandchildren, great-grandchildren, and lineal descendants of more remote degrees, including those who occupy that relation by reason of adoption (as allowed under Wis. Statutes 854.20) and nonmarital children and their lineal descendants (as allowed under Wis. Statues 852.05).  That is a lot to say with just five little letters.

Wills are written to tell the court how to distribute your estate at your death; the intended reader is a judge or court commissioner, not your family or friends.  This is evident when clients of mine are reviewing their draft documents are are confused when they do not see their children or grandchildren listed.  Instead they will see something along the lines of:

If my spouses has predeceased, then to my issue by right of representation.   Which means, if my spouse died before me, then give an equal share to any of my children, grandchildren, etc.  

Keep this simple word in mind as you dive into the world of estate planning and probate and make sense of documents drafted for you by an attorney or those you are doing on your own.

Please remember -- a blog is not a lawyer, but a platform to spark thought and reflection.  Do not take this as legal advice, rather you should hire an attorney in your home state for advice specific to your situation.  Thank you for reading and be well.

Mother/Daughter (hint, the author is the toddler here). 
Myself and my two children were my mother's only living issue at the time of her death in 2014.

The Philanthropist Inside Us All

The Philanthropist Inside Us All

By Melinda Gustafson Gervasi

March 18, 2024

Earlier this year a news headline caught my attention, Reflecting on your legacy could make you more philanthropic, new research finds. Specifically the statement that "...when people are prompted to consider how their lives will impact future generations, they allocate more of their wealth to collective causes like charities and less to family members." This rung true with me based on nearly twenty years of client meetings; here is a standard discussion with clients creating or updating a will:

Question: "When you die, where do you want your assets to go?"

Answer: "To my spouse or partner." stated quickly, with no need to think.

Question: "And if they predecease you, then where?" I ask with a gentle tone.

Answer: "Equally between my children?" Again, offered without much reflection by those clients with children.

Question: "And if you have no surviving children or grandchildren, then where?  Perhaps this seems extreme, but oftentimes families all board a plane to celebrate a significant birthday or anniversary in Hawaii.  What if you had a great time, but the plane did not make it back?"

And then the pause happens....

Answer: "Wow, I've NEVER thought of that scenario".  

It is not uncommon, after taking a few days to reflect on the question, the client returns with a list of nonprofits they value and respect.  This is not always the case, but it happens a good deal of the time. For those interested in reading more about how you can be philanthropic in your estate plan, you may want to check out a small book  I released in 2013 called Middle Class Philanthropist: How Anyone Can Leave a Legacy.

As a reminder, a blog is not legal advice.  It is meant to spark thought and reflection.  Please seek counsel from an attorney licensed in your home state.  Be well and thank you for reading. 

Book Review: The Last Lecture by Randy Pausch

Book Review: The Last Lecture by Randy Pausch

Melinda Gustafson Gevasi

March 11, 2024

Legacy Letters, also known as Ethical Wills, have grown in appeal in recent years.  Not a legally binding document, a Legacy Letter is just that, a letter you write with the intent it be read at the end of your life aimed at focus on your values, insights and life lessons.  Generally they are a few pages long, however, my recent re-reading of Randy Pauch's The Last Lecture reminded me that they can be more in depth.

A 2008 NY Times Bestseller, the book is an expansion on the last lecture Prof. Randy Pausch gave on September 18, 2007 at Carnegie Mellon University.  At the time he knew he was losing his battle with pancreatic cancer, and only had months to live. The father of three very young children, the lecture and subsequent book allowed him to leave a legacy for his children.  As described on the book cover, the book is not about dying, but rather a lesson on overcoming obstacles and going after your dreams. 

Just over 200 pages in length, this book is a wonderful read and may spark inspiration in you to leave a letter or other type of creative work for your loved ones, especially those that may be too young to remember you well. 

Thank you for reading.  If you have a book recommendation related to my area of focus, estate planning and probate, please leave a comment.  Be well!