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Dear Reader, Today I pause and wish you a happy Winter Solstice.  December 21st marks the longest night, and shortest day of the year.  Starting tomorrow we will begin the journey towards summer, with ever increasing daylight and shortened evenings. Today also marks the day my husband proposed, asking me to marry him on the Summer Solstice.  It is a warm and tender day in my heart, and marks the beginning of a break from my legal work.  I will be back on January 2nd with more thoughts on illness, death and taxes for the middle class. And now I am off to enjoy winter bonfires, slow cooked family dinners, warm beverages, nature walks with my kids, and gatherings with friends and family. I appreciate your interest in my posts, and wish you a relaxing and joyous end to 2012. Best wishes, Melinda Image credit: www.sxc.hu - free image

Image credit:  www.sxc.hu - free image Regular readers of my blog will know that charitable giving is a strong interest of mine.  In the coming year watch for my book on how the middle class can be philanthropic, leaving a legacy without having millions.  In the meantime, I offer these tips, borrowed from the Federal Trade Commission, as you consider making charitable contributions.  Crooks do not take the holidays off, so make sure you are making informed donations. Ask who wants your money and how it will be used; Be careful of similarly sounding names of organizations; Do not send cash donations; and Use caution if promised gifts are being offered. See the FTC's complete charity checklist here .

As the winter holidays approach we are bombarded with songs and cheer.  And if you are an estate planning attorney some of those lyrics may jump out at you.  Take Santa Claus Is Coming To Town: You better watch out You better not cry Better not pout I'm telling you why Santa Claus is coming to town He's making a list And checking it twice;  Checking it twice....that is what catches my ear!  I cannot believe how many times I see a look of surprise come over someone's face when the learn the true name of who is listed on a beneficiary form.  A relative has died.  The family knows a life insurance or retirement account exists.  They assume the listed beneficiary is so-and-so.  But it turns out to be.....an ex-spouse.  This happened last week.  Thankfully the ex-spouse is the parent of those who thought they were inheriting.  And they were able to say "yes" when I asked "are you on good terms with your other parent?" If...

Image credit: www.sxc.hu - free image During the frequent seminars I give on this ins and outs of estate planning and probate, one common myth bust is that of a power of attorney having the ability to "take care of things" after someone dies. Again and again clients and seminar attendees will say something to the effect of "so, I named my daughter as my power of attorney for finance.  So when I die, she'll handle things.  Right?"  To which I say, "no that is not right.  Remember, a power of attorney gives someone the power to makes decisions while you are alive but too sick to act.  Once you die, that power ends.  Upon death, the person nominated in a will or trust then has the power to administer an estate.  Those can be the same people, but it is up to you to nominate them in your papers." As an attorney I find that a very high percentage of my work relates to education.  Many times I am translating legal terms into everyday English, a...

Image credit:  www.sxc.hu - free image Until today I have always had positive things to say about my interaction with the Internal Revenue Service from my role as an estate planning attorney.  Unfortunately, its reputation with me was tarnished a bit today when I attempted to kick start a probate and trust administration for a recently deceased client. The client had nearly all of his assets in a trust, of which a child will serve as trustee.  Now that the grantor has passed, the trust needs an EIN number .  However, the decedent also had numerous savings bonds outside of the trust, which requires us to open a probate and an estate of checking account.  And for that checking account, we need an EIN . So on-line I went.  I had tried to do this Sunday when I was working at home, but the IRS apparently gives its computers that day off.  No EIN applications allowed on Sunday!  So first thing Monday morning I go on to the web site.  All ...

December 14th has been a happy day in my life since 1984, the day my oldest nephew was born.  Sadly that joy is clouded today by the horrific news from Connecticut.  My mind had been mulling what to post, prior to hearing this news.  Once heard I forgot about my legal work and focused on my day with my children.  Ages 4 and 2, they are the focal point of my world.  Off we went to the zoo for fresh air, animal friends, and living in the moment.  Once home I saw a post on Facebook that I wanted to share with my readers.  It offers tips on how to speak with children about violence .  Sadly this is required reading for parents these days. And the discourse about gun control will likely dominate and polarize our society once again.  My wish is that along with it, we hear for a call for increased access to mental health services in our nation.  Behind this unimaginable act was a very sick person, I write that not knowing anything about the s...

Probate, it is something so many people strive to avoid.  Whether it is dumping everything into a trust or placing beneficiary forms on all of their assets, some people become very diligent about making sure nothing passes through the probate court. The downside....one still dies with debts.  And how will those be paid if there is no probate.  A properly drafted and funded trust would take care of this issue, but a do-it-yourself patch work quilt approach may leave gaps.  As it did for the family in my office today. The recently deceased parent title property jointly with children.  The various life insurance policies had beneficiary forms.  But probate will likely occur to create a neat and clean manner to sell vehicles, pay funeral bills, medical bills, cell phone, bills. In the end, organization saves more time and money than whether something is probate or not.  We just scratched the surface on the number of phone calls we have to make to tra...

The order of phone calls sadly seems to go from oncologist to patient, and then patient to me.  Why?  A terminal cancer diagnosis has been given, and the patient realizes that the will they have been thinking about on and off for years really needs to happen.  And happen soon. As a result I spend a good deal of time working with cancer patients.  And when our meetings are over and the work complete, their stories bounce around in my mind.  Because of my work and their disease I may think about cancer more than your average 39 year old mother of two small children.  Thankfully my thoughts generally fall into the category of "what can I do to prevent this from happening to me anytime soon?" Lovers of the book The Tao of Pooh by Benjamin Hoff , as I am, know that really there may be very little one can do.  Sometimes life simply happens.  But there are certainly some small steps one can take to decreases the chances of an oncologist visit.  ...

Image credit:  www.sxc.hu - free image Creating an estate plan is a step that less than half of adult Americans have taken.  It is estimated that around 55% of Americans do not have a will.  However, even if you are in the minority of people who have created an estate plan, there are always more things you can do to make your departure less difficult for loved ones left behind.   For example: organize your papers in one central folder or binder that is clearly marked Estate Planning Documents; inform your personal representative / executor / trustee about the location of said binder; include copies of all beneficiary forms for your life insurance, retirement accounts, brokerage accounts, and other financial service instruments; provide contact information for those you would like notified of your passing.  I for example include an up-to-date holiday card address list so people could receive a letter or copy of an obituary; list on-line assets, such...

Image credit:  www.sxc.hu - free image Due to my line of work -- illness,death and taxes for the middle class -- I often am posed the question is a reverse mortgage a good thing for me?  And of course being an attorney, my answer is it depends. Nothing of quality in the world of estate planning and probate is a one-size fits all program.   It might be a good idea, and it might not.  More information is needed before reaching a conclusion. If you are wondering if a reverse mortgage is right for you, or for your aging parents, the first step is to gather information and learn exactly what a reverse mortgage is.  Second, you need to apply that information to your specific situation and goals. A great place to get started is the Consumer Financial Protection Bureau's web site .  I learned about it in the financial column in Sunday's paper.  It is full of great basic definitions on all things financial, including reverse mortgages.  It then...

The news this week has been energized by baby talk, Royal baby talk.  There is the speculation of whether her intense morning sickness is a sign of twins, to whether king or queen to be will arrive in 2013, to maternity fashion.  But me being me wondered, hmmmm, who would they name as a guardian to the child -- Harry, Pippa, someone else? Yes, as an estate planning and probate attorney as well as the mother of young children (currently 4.5 and 2.5 years old), I know the importance of answering that tough parenting question -- who will raise the child(ren) if both parents die?  Whenever I voice these types of questions to my husband he gives me a puzzled look and says, have you considered a new area of law, something happier?  To which I respond, there is none -- lawyers come into the picture when life happens, the unpleasant aspects of life happening. And so I find myself writing to you dear reader.  If you have children 18 and younger, have you nominated a ...

Image credit:  www.sxc.hu - free image When working with clients we have a series of three meetings, all covered by a flat-fee.  That means they can pay attention to what I am saying and not worry about my billable hour and the hands on the clock.  It also means they can asks questions, lots of questions, and one that always comes up at the last meeting (the day they sign) is -- where should I keep my will? My response is to direct them to my letter in their folder, suggesting a fire-proof safe kept in the home.  You know, those small ones you can get at an office supply store for about $45.  Some clients are a bit surprised, why not my safe deposit box at the bank? The answer is simple.  The document that gives someone the power to get into the box is in the box.  And there you have it - a huge mess.  In my opinion, keep your document safe but accessible.  And that is where the home box comes in to play. If that is not a comfortab...

M. Gustafson Gervasi, 2012, one of our 4-legged family members, Willa. Without a doubt, four-legged family members are dear to peoples' hearts.  Whether you have a Fiddo the Dog, Fluffy the Cat, or Birdie the Bird, keep the following in mind when preparing a will. Pets that have a high value, let's say over $1,000, should be mentioned in a will because they are technically property.  If you have pure-breed animals worth their weight in gold, they are an asset and should be addressed as so; Pet trusts, created in a will, are useful for animals with a long life span (i.e. turtles, parrots) or large medical bills.  A trust allows you to place the animal(s) and a sum of money in a trust to care for the animal(s), and then distribute any remaining assets upon the animal(s) passing; Use a letter of instruction to provide the name of the veterinarian you use as well as information on special food or medicine for your pet.  This does not belong in your will, but n...

Last week President Obama offered his first go at the federal estate tax, which is tangled up in the whole fiscal cliff scenario playing out in Washington, D.C.  According to news reports , his proposal is to have the federal exemption return to 2009 levels; $3.5 million, with a 45 percent tax.  What does that mean?  Anyone dying with an estate over $3.5 million would have a federal estate tax due, in the amount of 45 percent on the amount above $3.5 million. If no agreement is met, the federal exemption will fall to $1 million, and I'd have to look up the tax rate.  With no doubt, it would capture a lot more estates than the $3.5 million or the current $5 million. As December ticks away my eyes will be on D.C., waiting and wondering what resolution, if any, will emerge.  And then I can offer a bit more concrete guidance for my clients. Thanks for reading, and remember,  a blog is not a lawyer nor does it constitute legal advice.  Please consult ...

Reports are in, and it appears that the inaugural #GivingTuesday was a success.  On-line giving to charities on the Tuesday after Thanksgiving was up 53% according to sources .  I love this idea.  It completes a trifecta of holiday spending: Black Friday, Cyber Monday and now #GivingTuesday.  Personally, I am happy to skip the first two options and reserve my spending for charities.  No trips to the mall, nothing to wrap, supporting causes that are in need.  What better way to celebrate the winter holiday season? The former policy analyst in me wonders -- did people concentrate their giving on that one day?  If so, are donations to charities this holiday season up overall, or did they all fall on that one day?  Time will tell.  And the estate planning attorney in me sees this and thinks -- good, those donations were made early enough in the calendar year to appropriately qualify for a 2012 tax deduction (IRS sees them as a donation in the ...

As an attorney I spend a lot of my time educating clients and seminar attendees on the basics of wills, trusts and estates.  Translating law into plain English is a job requirement, and one I really enjoy.  As the work week comes to an end I offer the following post on the difference between Medicare and Medicaid.  While the words are similar, they are two very distinct programs.  And since Friday is my day out of the office, allowing me to focus on parenting my 4 and 2 year old children, this post was composed one an assistant of mine, Katherine Young, who is in her third and final year of law school at my alma mater, the University of Wisconsin. I'l be back next week with more thoughts on illness, death and taxes for the middle class.  Thanks for reading, and remember a blog is not an attorney -- always seek counsel from an attorney licensed in your state. Guest Post by, Katherine Young, 3L Unv. of Wisconsin During this past election year, the govern...

It is not uncommon to find out an attorney is also a self-declared book worm.  A love of reading is almost a requirement to get one through three years of law school.  And most of us emerge from those three years with an even stronger desire to read, but to read things that are not about the law.  That was my case, but I have since resigned to the fact that my area of focus, illness, death and taxes creeps into the arts more often than not. Case in point, while visiting the library recently I spied a slim novella on a shelf written by Richard Russo.  His earlier work, Empire Falls is a favorite of mine, so without thinking I dropped it in our check out bag and headed home.   Intervention is a total of 67 pages, , I thought to myself, wonderful -- a story I can get through in no time!  That turned out to be true (I finished it in two days), but by page 12 or so it was clear that the undercurrent to this story was a cancer diagnosis.  Entertainmen...

Image credit:  www.sxc.hu - free image Kudos to you if you have 1) completed a will, and 2) named a charity as either a primary or contingent beneficiary.  Welcome to a minority of Americans who have taken charge of what will happen to assets upon death and who will oversee the process.  However, there is one lingering question I would ask about those named charities -- does the language take into account the fact that non-profits routinely modify and change their name?  If not, it's time for a will update in my humble opinion. Earlier this week my local newspaper ran a story about how the non-profit Gilda's Club was changing its name to Cancer Support Community .  The reason, younger folks fighting cancer, the groups target audience, were born after Gilda Radner's death and do not know who she is.  Thus they do not make the connection to younger people fighting cancer.  I tested this on my law student working with me today, who was born in 198...

When it comes time to hire a lawyer to draft a will, opening up the phone book or running a Google search is usually not the best approach for those in need of an attorney's counsel.  Why?  When developing an estate plan to fit your needs you need to be able to share openly the ins and outs of your financial situation, family dynamic and other sensitive concerns.  Here are a few things you may want to consider when seeking out an attorney for your will, etc: Interview 3 or 4 different attorneys.  Remember you are hiring this person, so hire someone who is not only competent, but whom you like; Ask friends, family, and neighbors for referrals.  Chances are if they did not like an attorney who helped them they will tell you why, and if they liked the attorney they will give a great endorsement; Look for an educator.  Estate planning is full of technical terms and concepts.  Seek out an attorney who is willing to explain what they are creating for...

I'll be the firs to admit it, if a movie stars George Clooney I don't need anything else to put it on my must-see list.  Prior to having children, I would have seen the film in a theater.  Since having kids, my cinema days are on hold and it is only every few months that I have the time to settle down and watch a film on DVD with my computer.  And so that was the scenario a few weeks ago.  Snuggled under a blanket, kids tucked into bed, and nothing pressing for the following day, I popped in a George Clooney film. There was a vague knowledge that The Descendants had something to do with Hawaii, death, and a trust.  Little did I know I was about to spend near two hours immersed in issues I routinely handle at work.  Granted, I do not have clients with 25,000 acres of pristine Hawaiian land in a trust.  But advance directives, the concept of livings wills, accidents out of the blue, family members waiting on an inheritance, and the messiness of rel...

It's here, Black Friday.  Actually, did it start yesterday with the stores that were open on Thanksgiving?  Any way, I am here today to remind you that after Black Friday and Cyber Monday there is a movement.... #GivingTuesday .  This year, on November 27th, people are urged to think about how they can give back at this holiday time. For our family this is a natural fit.  Long ago we abandoned the long holiday lists.  Our small children receive a few simple gifts, and then we write checks to causes that meant a great deal to us in the year ahead.  This year we may add another, such as going to a blood drive or purchasing a meal for a family in need.  What might you be able to do?  Do you want to give back?  Let me know what you think?  I love the topic of middle class philanthropy and want to know what you are thinking.  Please share and let the discussion begin. Thanks for reading, and I'll be back next week with more thoughts ...

Today our nation pauses to enjoy good food, spend time with loved ones, and celebrate Thanksgiving.  I am taking the day off to be with family and prepare a feast.  But here is a little saying, one our family says before each meal (when we remember, life with a 4 and 2 year old is a little hectic some days).  Enjoy your day everyone! For trees so tall, and skies so blue, For family, friends, and food, we thank you. Image credit:  www.sxc.hu - free image

This past weekend a blurb in the Sunday Wisconsin State Journal caught my eye -- from honoring his grandfather with a homemade casket, man forms a business .   Oh I told my husband, make sure we hold on to this until I have a chance to read that article!  To which I received a slightly concerned and bewildered look -- my job is rather macabre. And so I have had a chance to read the article.  It is a lovely profile of a man who has create an eco-friendly business right here in my home state of Wisconsin.   Northwoods Casket Co . creates eco-friendly caskets for affordable prices.  And apparently it is what the public wants, orders are up. One fact that jumped out at me was in the introduction.  After his grandfather's death his family stood around, in grief, unable to decide what to do -- burial, cremation, ?  In the end the grandmother said yes to the grandson's offer to build a casket, similar to one from the movie Unforegiven (his Grandfather's f...

Image credit:  www.sxc.hu - free image The holidays are upon us, and with them come gatherings of relatives and family.  Often a time of joy, it is always an opportunity to make sure your loved ones have essential information.  As I type I can hear my husband now -- seriously Melinda, what a downer topic for a holiday meal.  Okay, yes, maybe not at the table, but during the course of a visit ask yourself, do these folks know what they need to know?  Here would be my top five: Location of my powers of attorney and will (assuming my husband cannot act); Name and number of someone willing to care for our cat's in the event of an accident or death; Location of a list of our assets (retirement accounts, life insurance, business bank accounts); Where to find information on what bills are on auto-pay with our credit card and or checking account; and How to find contact information for the people we've named as guardian of the children and their trust. T...

Image credit:  www.sxc.hu - free image Show of hands, who does not have a will?   This is a routine question I ask during the many seminars I offer on the basics of wills, trusts and probate.  Sheepishly hands are raised.  To which I offer --  Guess what, you actual DO have a will.  If you have not taken control of the situation and written one yourself, the State of Wisconsin has done one for you.  And it is located in State Statues. Called intestacy, when a person dies without a will the distribution of his or her probate property (meaning assets that do not have a beneficiary form or other label), is governed by state law.  In many situations this distribution may be the sames as the person would have said if they had done a will.  And in many situations it is not the same.  For example, property may pass to your nearest living relative instead of the person you are spending your life with but are not legally married for some r...

The good news is that those pesky political commercials are behind us now.  However, the focus has now been redirected to the "fiscal cliff".  Buried in there is a discussion on what to do with the federal estate tax.  If no action is taken, the federal exemption limit will fall to $1 million in 2013.  And it will resurrect the Wisconsin estate tax.  So, while we may want to look away from the ways of Washington, D.C., I cannot. Image credit:  www.sxc.hu - free image I will be following the discussion (is that a generous choice of words) and wait, listen, and read.  What oh what will happen?  Time will tell, and sadly I think Congress and President will simply "kick the ball".  Meaning they'll come up with a short-term fix, good for a year or two.  Which means long-term planning is not really an option for folks flirting with the $1 million level. Enjoy your weekend everyone, and I'll be back Monday with more on illness, dea...

Image credit: www.sxc.hu - free image All professions have a lingo all their own, and that is especially true in the practice of law.  Latin, German and French all contribute to an amazing list of terms that roll of the tongues of estate planning attorneys, but cause blank stares and confusion among everyday folks.  That is why my firm web site has a glossary of estate planning and probate terms ; one role of lawyer is to educate.  The three that jump out at me are: Codicil -- a fancy word for amendment to a will.  Someone creates one of these when s/he already has a will, but wants to make a minor change.  For example, change the guardian named for children or the name of a charity.  Just like a will, a codicil must be executed to meet State law requirements; Issue -- as the mother of two young children, I feel this word has a double meaning.  Technically it refers to your offspring a.k.a. children, grandchildren, great-grandchildren, etc. ...

Image Credit:  www.sxc.hu - free image Starting at a blank power of attorney for health care form and confused about who to name as your agent?  If this is you, pat yourself on the back for taking control of your life and addressing this issue.  As for who to name, consider the following, which I come to from personal experience.  I was my father's power of attorney for health care in 2009 while he was dying. First -- who do you know and trust that is good speaking with doctors and nurses; Second -- who in your circle of family and friends is comfortable with medical terminology; Third -- who in your life has the emotional strength to keep it together if this document comes into play -- we are not facing a sprained ankle here, but a very severe condition; and Fourth -- who has the time to be there?  My father spent the final month of his life in a hospital, that last week in palliative care.  At the time I had a 13 month old child and my own le...

Somehow or other 2012 has nearly passed us by.  And once again I am looking forward to starting the new year with a variety of seminars on issues related to illness, death and taxes for the middle class.  From talks at a local church, to a small segment of a retirement workshop, to Money Week, you'll find me all around the Madison area educating folks on the basics of estate planning.  Check out my web site for specifics on dates and locations .  And if your organization is interested in setting up its own presentation, just let me know.

Image credit:  www.sxc.hu - free image If you are over a certain age you probably receive routine cards in the mail inviting you to the local hotel for a free chicken dinner and a seminar on how to avoid probate via a living trust.  These instruments are pushed, often by sales people who are not attorneys, mainly because they are lucrative.  Proceed with caution. When I work with clients I use trusts only when the fit the situation and I feel the client has the sophistication to manage the inevitable tax issues that will develop.  Most people do not want the hassles associated with trusts, but want to avoid probate.  If so, our conversation centers around the use of: Transfer on Death Deed for real estate.  Not all states have this option, but we do in Wisconsin.  It is a label placed on a deed that states who should inherit the property upon the owners death.  Probate is avoided, and a small filing fee is paid to the register of deeds. ...

There is nothing certain about life except death and taxes.  And often the two go together.  Loosing a loved one is never easy, no matter how much time a family may have had to prepare.  Emotions run high, caregivers suffer exhaustion, paperwork swirls, life marches on, and some matters need to be addressed even though they are unpleasant.  I see this every day in my legal practice.  To the extent you can, do not overlook income tax matters for the loved one you have lost. If a loved one has died and you are picking up the pieces and moving the paper work forward, there is one important thing many overlook -- income tax forms.  When empowered by a probate court in Wisconsin, the  Personal Representative has a duty to make sure a last income tax form is filed for the decedent.  And, of the decedent's estate earned more than $600 (current level, which may change in the future), then a fiduciary income tax return is likely due as well.  And th...

Two weekends ago our church (Prairire UU in Madison, Wisconsin) took a service to recognize the Day of the Dead.  A traditional Latin American holiday, it is a moving tribute to loved ones who have left their earthly life.  Afterward, a staff member sent a link to a moving statement created by NPR's Aaron Freeman. I found a link on YouTube (the photos are bit off).  It is titled - Why You Want a Physicist to Speak at Your Funeral.  The words are moving, and I find it comforting to be reminded that one's energy never really leaves this Earth. The work I do is rewarding, but also emotionally draining at times.  I am thankful for the insight of Aaron Freeman and others like him.  A positive outlook can be such a spirit lifter, especially on those days you learned of a client's passing. Take care, be healthy, and enjoy every minute you can!

Ever wonder if you should bother using certified mail instead of regular mail?  As an attorney I prefer to err on the side of caution, and would likely opt for certified.  While attending a recent tax law seminar update one update related to mailings to the Wisconsin Department of Revenue. ....in general, a petition is considered timely filed only if it is actually received by the Commission (Tax Appeals Commission) on or before the due date, with one exception.  The exception....Wis. Stat. section 73.01(5)(a), a petition is considered timely filed when it is mailed by certified mail  in a properly addressed envelope, with postage duly prepaid, with the envelope postmarked before midnight of the last day for filing.  The use of regular mail is untimely.  Priority mail is untimely.  Sliding it under the door of the office after it is closed is untimely.  Details matter in the area of law. While this is a narrow section of Wisconsin law, the pri...

Every four years our country allows its adult citizens to come forward and have a say who which person shall lead our nation.  Whether you love or despise government, I encourage you to exercise your right to vote. Image credit:  www.sxc.hu - free image Four years ago my husband and I walked to our polling place, pushing our infant son in his stroller.  Today he is four years old and has a two year old sister.  As a child I remember accompanying my mother to the voting booth.  It is simply something we do, just like brushing our teeth.  And I look forward to many more elections, especially the ones where my children will be old enough to case a vote themselves. Enjoy democracy today, it is a precious gift.

If you are "do-it-yourself" type person, there is a chance you'll be processing a 2012 gift tax return for yourself or a loved one who died in 2012.  If so, I recently came across a nice nugget of information...the mailing address for the form.  Unlike other IRS forms, there is one mailing address for all gift tax forms.  Whether you live in Maine or California, the address you should use is: Department of Treasury Internal Revenue Service Center Cincinnati, OH  45999 Forms are due by April 15, 2013.  Disclaimer -- life is change, so please note this blog post was written in November 2012.  Please double check with the IRS to make sure the agency has not made any changes after this posted.  And as I always say, a blog is not a lawyer.  Please call one for advice specific to your situation. Image credit: www.sxc.hu - free image

Legal lingo is full of acronyms, including ILIT which stands for irrevocable life insurance trust. It is a fairly advanced estate planning tool used by higher net worth families to minimize the possible impact of federal estate taxes upon death; especially attractive to business owners who have a lot of wealth on paper, but not so much in the liquid sense.  ILITs allow someone to set up a trust, and gift money to that trust.  The trust purchases a life insurance policy on the person.  Upon his or her death, the insurance pays into the trust and now there is liquid cash available to pay an estate tax, but it is outside of his or her estate.  It is a way to prevent dipping into a business or farm's equity.  And it may become a thing of the past. The President's FY2013 Green Book , or fiscal proposals, calls for ending ILITs.  No longer would the assets be excluded from the decedent's estate nor would distributions during the grantor's life not be subject ...

The 1st of November is the Day of the Dead , a traditional Mexican holiday that has spread across the globe.    Grief from the loss of a loved one can be crippling, however, November 1st gives one a great reason focus on the greatness that once was and less on what was lost. Image credit:  www.sxc.hu - free image Personally I find this to be a great way to share the life of my father, who died in 2009 when my son was a year old and before my daughter was born.  My children will only know their maternal grandfather through me, and today is a day I can: cook one of his favorite meals; watch a favorite TV show or movie; look at photo albums from my youth; tell one of his favorite jokes; or scatter some bird seed on his grave (he so loved feeding the birds). How about you?  What things do you do to celebrate a loved one who has parted?  Thanks for reading, and I'll be back tomorrow with more thoughts on the topic of illness, death and taxes for...

Image credit: www.sxc.hu - free image (yellow moon) October 31st has arrived -- Happy Halloween.  As you prepare to take your little goblins and witches (in my case a pirate and an owl) for an evening stroll to collect candies, or you prepare a bowl to keep near your door for the little ones posing the question trick or treat, don't forget the coins.  Yes, Halloween is most prominently associated with candy corn and other sweet treats, but it is also a day when children can make a difference in the lives of children with less advantages through the UNICEF program.  Created over 60 years ago it is a long-standing charitable program.  Enjoy the fun, and consider what you might be able to do to put more treat and less trick into the lives of children around the globe.  One not need be a billionaire to make a difference in the world.

Image credit:  www.sxc.hu - tax papers, free image Ask a lawyer a question, and you'll likely get an answer along the lines of "it depends".  And that is the case for the question of whether Wisconsin's state estate tax will return in 2013.  As I write this post, we can only guess about what will happen, and here is why. First, an estate tax is a tax levied upon an estate when a person dies with a net worth in excess of an amount set by a legislative body.  There is a Federal estate tax, with an exemption level set by Congress.  And then each of the 50 states can elect to implement their own state estate tax. Second, Wisconsin used to have an estate tax, but it ended as of January 1, 2008.  Its end was based on state legislation linking its tax to the credit allowed on the federal estate tax return for taxes paid to a state.  Current federal estate tax exemption levels are $5 million per individual; if a person has a net worth lower than $5 mi...

Image credit:  www.sxc.hu - free image (gift boxes) When speaking to groups on issues related to illness, death and taxes for the middle class, I spend more time on matters related to gift taxes than I do the federal estate tax.  The reason is simple -- the gift tax applies to more middle class homes than the estate tax does. The gift tax is a tax owed by the person making the gift if the amount exceeds the annual exclusion for the year (in 2012 it is $13,000 per person per year).  However, there are transfers that may give the appearance of a gift, but are not taxable according to the IRS.  Three of them are: Transfers to political organizations (as defined in Section 527(e)1(1) of IRS code); Transfers for education, excluding costs for books, supplies, dorm fees or board, as well as contributions to 529 plans; and Transfers for medical expenses (care must meet the same requirements as the income tax deduction). Now remember, a blog is not a lawyer s...

If you are like most people, in your wallet or brief case you likely carry a frequent flier card or some sort of loyalty program.  And given the kind of work I do, a natural question is what happens to those "points" when you die?  Of course, being an attorney my answer is "it depends".  As recently covered at a recent continuing legal education update it was shared that the distribution of these assets vary, and depend on the terms of the contract created by each company.  But, there is an article available on the web (dated 2011) that covers some of the big ones.  Do you use a beneficiary form?  Does your will control?  What if you die without a will?  If this seems trivial, pause and reflect on the fact that it is estimated that members are estimated to be holding approximately 3.5 trillion unused miles.  That is a lot of miles to pass without a little though and reflection. Even if you do know what will happen (they pass via will) in...

Yesterday and today I have been attending the annual CLEW Tax Law update in Madison.  A day and a half packed with tax concepts, code citations, and esoteric terms.  For the registration fee I walk away with the following three pearls of wisdom, which anyone can benefit from in the world of estate planning and probate: File things on time, and avoid creating a questionable issue the court will have to decided (i.e. is priority mail the same as certified mail; the answer in the eyes of Wisconsin's Department of Revenue is no); Read the entire trust (or insert the name of any legal document; will, contract, form, etc.); and Keep it simple -- the most elegant solution to problems does not require brilliance, but rather appreciation by the government employees reading the legal forms created. Nothing profound.  Concepts available to all, not just those with a multitude of letters after their name.  Common sense, but often overlooked.  I am thankful for the w...

I am only five minutes in to the annual CLEW Tax Law workshop, and I've already received a great bit of information.  Wisconsin's Department of Revenue offers the option of receiving email updates on various areas of tax law.  From "tax professional" to "sales tax", you can plug in your email and get updates as they are published.  I've signed up, and so can you by clicking on the DOR's web site .  Stay informed, it is powerful.  And thanks for reading.  Feel free to share links to other useful tax law update sources if you have one.

The forecast for Madison tomorrow predicts partly sunny and 76 degrees....on October 24th!  Of course I am scheduled to be in a day-long seminar on tax laws.  There will be no Ferris Bueller day for me, as there apparently will be for a fellow probate attorney living down in Chicago (according to her Facebook post).  No, I will be in class....all day. Yes, even attorneys return to the classroom.  Once we are handed a diploma and admitted to the bar, we are still required to attend 30 hours of continuing legal education (CLEs) every two years.  And every fall you will find me enrolled in the CLEW Tax Workshop, presented by the Wisconsin Law School .  A day and a half of jammed packed tax fun, and for a great value. And if you feel bad for me being stuck inside all day, there is no need.  It could be worse....my husband has to take continuing education for his professional engineer stamp (electrical).  And his classes have quizzes.  Ours ...

NPR ran a short, but well-done story on the rhetoric surrounding the federal estate tax.  As the campaigns race towards a finish line, I am not surprised to see discussion of the estate tax emerge.  Feared by many, but paid by very few, it is yet another example of people playing off of other's lack of knowledge ( "I will save you from this tax....even though you are not likely to have to pay it" ). In the unlikely event the exemption falls to $1 million, then yes, it will hit a lot more people.  However, I urge people to pay more attention to issues related to gift taxes than to estate taxes, paid by less than 2 percent of estates.

Previously I have blogged about the upcoming changes to Wisconsin's 529 Plan, called EdVest .  The plan allows parents (and others) to save money for college in a tax efficient manner.  Deposits result in an income tax deduction, growth is not taxed, and withdraws are not taxed if used for higher education.  All of these make 529s quite attractive for parents thinking ahead to college. When Wills Fargo was the plan administrator when we opened our accounts, and for both we opted for an index fund because the expense ratio was low.  This means more money goes into our investment and less to the company's pockets.  As Wells Fargo is moved out and TIA-CREFF is moved in as the plan administrator we are disappointed to read in the materials that only ranges of expense ratios and not ratios for each fund  now available.  Without this data it is challenging for us to compare the funds under Wells Fargo to the new options. In the end what matters most is ...