Dangers Lurking in a Will -- Are Social Security Numbers Listed?

      free image, www.sxc.hu

Curious about what will make an estate planning attorney gasp in freight?  My personal number one horror to find in a client's old will is a Social Security Number.  It does not matter whether it is the SSN of the client or a loved one they name, modern wills should not contain this sensitive and personally identifiable information.

Why?  The probate process is public.  And the function of a will is to tell the probate court what to do, and it is a court record visible to all.  Now procedures can be taken to protect the decedent.  Blackening the number out is not an option, and may actually violate the law of the state you are in.  Here in Wisconsin my go-to method is to petition the court to keep the matter closed.  It is not perfect, nothing but a will without a SSN is perfect, but it gets the job done.

And there is reason for concern.  Identity theft of all kinds is on the rise in our country.  And death does not protect one for identity theft.  In fact, it may push you higher on the list of would-be-thieves.  Even your death will not prevent someone from syphonning off your last income tax refund or using your information to obtain a drivers license.

Only a minority of Americans have actually done a will.  If you have, but it has been a decade more, you might want to pull it out and look it over.  If a SSN is listed, it might be time for an upgrade.

Thanks for reading, and remember a blog is not legal advice.  Please consult an attorney in your state for advice specific to your situation.

T.P.P. -- An Estate Planning Acronym

Scanning my emails last week three little letters caught my eye, TPP.  Hmmm, what is this organization doing talking about TPP.  Turns out the letters in the email referred to a trade deal known as the Trans-Pacific Partnership, not Tangible Personal Property.  Acronyms are everywhere, and three little letters in one discipline mean something entirely different in another.

Among estate planning and probate attorneys the letter TPP refer to the client or decedent's tangible personal property.  In plain English, his or her stuff.  Items one can pick up and carry, generally excluding cash and vehicles.  Think jewelry, collectibles, furniture, hobbyist gear, etc.  We all have it to some extent or another, and the question often becomes what will happen to it at death.

Should you desire a specific piece to pas to a specific individual, and you have a will empowering you to leave a legally binding inventory distribution list (requirements for vary from state to state) be as specific as possible. Imagine leaving details so specific a stranger could enter your home and know WHAT you are referencing, WHERE it is located, and WHO should receive it.  Compare and contrast the following:

• I leave my ring to my cousin Deb; or
• I leave my diamond engagement ring (see attached photo labeled "a") located in my jewelry box in my bedroom to my cousin, Deborah Thompson, who resides in Minneapolis, Minnesota

Both give the same direction, but one is far more exacting.  We have a much clearer understanding of WHAT ring.  WHERE said ring can be found.  And WHO cousin Deb is.  Sadly it is often the TPP that ignites feuds in the wake of a loved ones death.  Creating a will is one way to take control of the situation by putting in legal terms your desires.  If you have taken this step, push yourself a bit more and be as exacting as possible.

Thanks for reading and remember a blog is not legal advice.  Please consult an attorney for advice specific to your situation.

Derby Cars & Guns: A Facebook Lesson on the Basics of Probate

Have you seen it?  The Facebook photo that says something along the lines of my biggest fear is one day I will die and my wife will sell my guns (or derby cars) for what I said I paid for them! Emphasis being placed on said I paid for them.  Underlying the language is the fact that Facebook user has not been truthful in what was really paid for the items, and you can assume it was more than what was reported to the spouse. Sometimes substantially more.

Pushing beyond the joke, this Facebook post highlights a key element of the probate process.  When an individual dies his or her probate property is distributed via the probate court unless some other instrument (i.e. a living trust) had been created and funded (i.e. assets transferred to the trust from the individual).  A first step in the process is to complete an inventory of all the decedent's probate property.  Things such as a house, vehicle, bank account, and tangible personal property are typical items listed.  A fee to the court (here in Wisconsin it is 0.2 percent) is paid based on the total inventory value.  For those obscure items in your possession at your death, it may not benefit you in the long run to down play the true value.  How will your heirs know what to list if what you initially told them was an understatement?  Something to think about as we head into the weekend.

Takeaway -- one way or another, leave an accurate record for your loved ones to know what you paid for those derby cars, guns, hummels, or antique cookie jars! Thanks for reading, and remember a blog is not legal advice. Please consult an attorney in your state for advice specific to your situation.

Anyone Can Leave a Legacy!

Predating democracy, capitalism, organized religion, and as old as humanity itself, philanthropy exists because things often go wrong, and things can always be better. Current understanding of philanthropy focuses on images of gated estates and the means of Bill Gates or Oprah. Stereotypes continually reinforced in news reports – internet mogul leaves $5.3 million art museum! – or something along those lines. An academic review of the word philanthropy reveals it to be a noun meaning generous help or benevolence towards one's fellow man. Philanthropy is not an exclusive act of those with a seven-figure net worth, anyone can leave a legacy.

Daily I work with clients in my estate planning and probate legal practice who make bequests to favored charities. My clients fall solidly into “the middle class”, yet they give, and those gifts make a difference in the world of a nonprofit. It was from those client meetings that the idea to write Middle Class Philanthropist: How anyone can leave a legacy was born.  Read more about the book on its publishing page, www.purpleowlpress.com

At the surface, most literature related to the benefits of being philanthropic relates to tax breaks. The benefits of philanthropy, however, extend beyond the tax code. A well thought out final gift at your death to the nonprofit where you volunteered on a routine basis can produce a perpetual stream of revenue. Giving at the end-of-life also sets an example for your children and grandchildren to do the same. And it simply feels good; brain research shows charitable donations stimulate portions of the brain associated with pleasure.

Inspired, but feeling the need for more motivation to tackle the task of creating or updating a will and other end-of-life documents? Focus on the the fact that $41 trillion will pass from the baby boom generation to the next between 1998 and 2052. What might our world look like if ten percent or five percent was directed to nonprofit organizations?

Gail Shefield, a woman profiled in the book, saw this possibility and took control. Her will directed her home to one nonprofit and her remaining cash to another. The amount given may be considered modest, but the sum provided a huge financial boost to the financial situation of two nonprofits where she volunteered working to stem feral cat populations. One word of caution, sadly the nonprofit world is not void of fraud or scams. Moreover, not including the full legal name of the organization you intend to include can cause confusion and dispute.

Philanthropic giving does not even require you to visit a lawyer's office. Consider updating beneficiary forms for life insurance or retirement accounts to include a nonprofit. My personal favorite form of philanthropy is directing in-lieu-of-flowers donations to a specific cause or nonprofit. The options are endless and within reach of anyone motivated to make one final gesture of charity. Anyone can leave a legacy.

Note, a blog is not legal advice but rather a forum for sharing thoughts and ideas.  Please consult an attorney in your state for advice specific to your situation.  If you would like to hear more about Middle Class Philanthropists please visit the events schedule.  I am available for book talks and discussions, please contact me if you would like to schedule one for your place of worship, civic club, or favorite nonprofit.

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.

Heirs In Dispute - Sweating Over the Small Stuff

Sibling closeness I, as a mother and estate planning attorney, seek to preserve.  Take control and let them know your wishes.  If not, unpleasant disputes tend to arise.

As the mother of two young children and as an estate planning and probate attorney, I can tell you that the "stuff" in your life is most likely to ignite sibling rivalry when you die.  From jewelry to collectibles to hunting gear -- the items that hold little to no monetary value often ignite the most intense disputes when a loved one dies.

And apparently leaving tangible personal property, what we in the legal practice call your TPP, is the number one thing Baby Boomers care about leaving at death, not money.  Who gets what, that is the essential question.  When I work with my clients documents generally say "I may create an inventory form the disposes of my tangible personal property", if so, the personal representative is obligated to distribute accordingly.  And then I add to the conversation, be specific as possible, envision having to give a stranger directions to find said object.  Glossed over in the Wall Street Journal article, this is key.  When you say "I leave my ring" the attorney in me wonders: which ring, and where is it kept?

Facing your death is not easy for anyone.  But if you are a parent and or grandparent, and you want to preserve the relationship between your children, considering making these decisions and doing the necessary work.  I have seen two brothers who will never speak to one another again because of a chest of drawers, and another client told me "I have cousins who don't speak because of Hummels".

Take control, say what happens, be specific, and work with an attorney to make it legal in your state. Remember, a blog is not a lawyer or legal advice, and should not be relied upon.  It is educational and designed to spur the thinking process.

Staying Out of Probate in Wisconsin

The Badger State (aka Wisconsin) is known for many things: die hard Packer fans; cheese; cows, just to name a few.  Low taxes are not something Wisconsinites associate with this verdant state in the heart of our country -- especially at the moment when property tax bills arrive in mail boxes.  But in the area of probate, we rank towards the bottom.

Here in Wisconsin the fee (or tax) assessed on a probate is 0.2 percent. That is zero point two!  In other states it is as high as 8 or 10 percent.  The fee is assessed on the total inventory of a probate estate, things outside of probate are not subject to the fee.  Even though it is quite low when compared with other venues, routinely I receive calls on "how to avoid probate".  There are options:

• Give it away during life.  If you do not own it at death, the tax does not apply.  This can be tricky on several levels.  One, you do not know how long you will live and cannot be certain how much you can afford to give away.  Two, the giftor is responsible for paying the gift tax if the gift exceeds the limit set by the IRS (currently $14,000 per person per year, some exceptions allowed).  And third, if you give it, you cannot control what someone else does with it.  This last one is hard for people to accpet, once it is gone, it is gone;
• Fill out Direct Transfer forms. If the asset has a label that says "it goes to my daughter upon my death" it goes to her, outside of probate, no matter what a will might say.  The transfer is direct, avoids the probate fee, and is usually faster than probate (which can take up to a year or more to be complete). These labels can be placed on: life insurance, retirement accounts, bank accounts, real estate (via a transfer on death deed); and brokerage accounts.
• Create a Trust.  The granddaddy of avoiding probate is the living revocable trust.  Essentially a wicker basket designed to hold assets during your life, and then distribute them to beneficiaries sometime after you have died.  This direction avoids the probate process, but requires the creation of a trust, accomplished through writing a trust agreement which addresses who is in charge, what they can do, etc.  And it requires the title to the asset be changed to the name of the trust.  If not, the asset is not in the trust. More clients than not find this process too daunting, and opt for probate and its fee instead.

The creation or update of a will, trust or other end-of-life documents can become complex quickly.  And it is not always a large net worth that creates complexity.  Second marriages, cabins, and family members with special needs create challenges.  A blog post is not intended to be legal advice, and should not be relied upon.  Please use this as educational material, and seek legal advice from a licensed attorney in your state. Thanks for reading!