Wednesday, December 21, 2016

Timing is Everything in Legal Life Planning!

With Christmas fast approaching and the New Year practically upon us, discussions of goals and resolutions for the upcoming year frequently come up.  Invariably, when legal life planning is discussed, many times a "We'll do that next year" approach is adopted.
The legal life planning process, though, can only fully use all available tools if sufficient time exists.  Adequate preparation can mean the difference between having options and protecting your assets versus facing additional expenses and headaches down the road.

One of the best ways to plan ahead is to formally nominate someone to make health care and financial decisions for you when you are unable to communicate those desires.  Failing to execute Health Care and Financial Power of Attorney documents can result in your loved ones being forced to go to court, spending time and oftentimes thousands of dollars, to gain such authority.
Planning ahead about how best to pass your assets can also help ensure a smooth process for your chosen beneficiaries, while minimizing administrative costs.  Wills and other non-probate tools, like a payable-on-death (POD) designation or a life estate deed are often used, but other legal options, like a revocable trust, may deserve consideration too.

When attempting to protect assets from a future need for a nursing home stay and qualify for the government program that pays for such care ("Medicaid"), planning ahead is especially critical.
If you have gifted or sold any assets for less than fair market value within 5 years of trying to qualify, the Medicaid system requires the difference to be repaid before you qualify (the "5-year look back period").  Putting in place legal tools now to safeguard those assets before a need for nursing home care arises can avoid this issue.

Timing is everything in legal life planning!  Protections to put in place now to protect yourself and your loved ones will be discussed at our first seminar of the new year on Saturday, January 14th at 10:30 a.m.  This seminar will be held at the Weyers-Hilliard Library in Green Bay.  More details can be found here:
From all of us at Davidson Law Office and The Estate Planning Group, we wish you a Merry Christmas and a safe and happy New Year!

Friday, December 16, 2016

Estate Planning through the Ages

When you hear the words “estate planning” what is your first thought? Oftentimes, images of the very wealthy along with complex trust and tax planning spring to mind. In actuality, estate planning includes important documents that should be considered by people of all ages, regardless of one’s current stage in life. Whether a person just turned 18 or is enjoying retirement, estate planning includes different legal documents that deserve discussion. Below are some of the important periods and ages where estate planning should be thought about:
  • Turning 18: Every person should have, at the very least, a valid Health Care Power of Attorney and Financial Power of Attorney in place upon turning 18. Wisconsin Statutes do not provide for any “default” person to make decisions for an individual after they turn 18, even if they are a parent or spouse. In the absence of a valid Health Care Power of Attorney, a guardianship proceeding may be required, which can become very expensive.
  • Parents of young children: Estate Planning is also critical for parents of young children. By executing a will, young parents can nominate a guardian to provide personal security for their minor children. From the financial side, a testamentary trust can be incorporated into the will to ensure minor children do not receive all assets left to them by their parents at age 18 in one lump sum distribution. Instead, parents can nominate a trustee to manage any assets for the benefit of minor children and make distributions to the children upon reaching a pre-determined age, set by the parents.
  • People looking to avoid Probate: Estate Planning also includes more detailed plans for individuals or couples who desire to bypass the probate process. With a revocable trust, the probate process can likely be largely avoided, which in turn, leads to a quicker estate administration and a faster distribution of assets to beneficiaries. The revocable trust is also a private document that is not publically available and can give added protections for beneficiaries from creditors.
  • Individuals concerned with protecting assets from Nursing Home Care: For individuals who are worried about the possible costs of nursing home or long-term care, estate planning can provide asset protection. An irrevocable trust, unlike a revocable trust, can be used to shelter certain assets from being liquidated to satisfy nursing home expenses. However, assets are only safe if they are in the irrevocable trust for the 5 years prior to applying for a needs-based program, such as Medicaid. Additionally, control of any assets in an irrevocable trust must be ceded from the initial owners. Even with these trade-offs, for some clients the benefit of protecting certain assets from any nursing home care is well worth the protections an irrevocable trust provides.
The Estate Planning process addresses a wide range of issues for individuals of all different ages. From the young couple who just had their first child to the couple who has been together for over 60 years who are concerned about the impeding cost of nursing home care, estate planning can provide ease of mind ensuring the maximum protections are in place to preserve and protect each person’s assets.