What's the big deal with Estate Taxes?

Earlier today, President Trump signed into law the Tax Cuts and Jobs Act of 2017, capping one of the most significant tax overhauls in the last 30 years. One of the items sure to generate conversation is the changes made to estate taxes.

Before we review the changes made to the estate tax, let's look back at the previous state of the estate tax. Prior to the passage of the 2017 Act, the last major estate tax change occurred in 2012.
Toward the end of 2012, Congress passed the American Taxpayer Relief Act (ATRA). It was signed into law by then-President Obama on January 2, 2013. ATRA amended the prior laws regarding estate taxes and set the estate tax rate at 40%. However, the 40% tax rate was only applicable to individuals who, at their death, sought to pass assets in excess of $5,000,000. So, while a 40% tax rate was high, a minimal number of individuals were affected.

To go even further, ATRA included an inflation-protection rider, further increasing the exemption level with each passing year. In 2018, the exemption level was set to increase to $5,600,000. This means, under ATRA, an individual who died in 2018 could leave $5,600,000 to any number of individuals, charities, etc. without having to pay a single penny in estate taxes.

For a married couple, the ATRA rules allow a virtual doubling of the estate tax exemption level, provided the proper tax forms are timely filed. In essence, this would have allowed both spouses, cumulatively, to transfer up to $11,200,000, without triggering any estate taxes in 2018.

Now let's review the Tax Cuts and Jobs Act of 2017. With the signing of the 2017 Act, the estate tax exemption is doubled (currently, for years 2018-2025). This means that where before an individual could exempt $5,600,000, an individual can now shelter $11,200,000 from any estate taxes. For a married couple, properly utilizing the exemption rules, the exemption is doubled to $22,400,000. If no further action is taken by Congress prior to 2025, the exemption amounts will revert to the previous ATRA levels.

With such a high exemption level, only about 0.3% of the population needed to worry about estate taxes under ATRA (and now it is even less, with the exemption doubling),.  This does not mean though that the other 99.7% of the population does not need to complete their estate plan.

Instead of focusing on estate tax avoidance, we can now examine your personal goals and how to protect your assets and your family. This includes protecting assets from beneficiaries, avoiding the probate process, and ensuring a smooth passing of your assets to your chosen beneficiaries.  If you’d like to ensure that you maximize the resources available to your loved ones and keep your family out of Court and out of conflict, schedule a Family Life and Legacy Planning Session.™ We can review your existing plan and help you make adjustments, while achieving your personal goals.

This article is a service of The Estate Planning Group and Davidson Law Office, LLP, your Life & Legacy Planning Lawyers, who believe in developing trusting relationships with families for life. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.

10 Costly Misconceptions about Wills, Trusts, & Powers of Attorney

Misconception #1: A Power of Attorney can be used after death. No. Upon a person's passing, Powers of Attorney lose any and all authority possessed during a person's life. Whether a Power of Attorney for Health Care or a Power of Attorney for Finances, both documents, expires upon death. Neither document allows for anything to be done after death. Such decisions remain strictly in the hands of the Personal Representative under a Will or a Trustee under a Trust.

 Misconception #2: A Will avoids probate.  No.  A Will is the primary tool of the probate system. Your Will is like a letter to the Court telling the Court how you want your property distributed.  The Court gets to interpret your Will. After your death your representative must prove to the Court that all your property is collected and appraised, and all your bills and taxes are paid, before your property can be distributed to your heirs.

Misconception #3: Your Will and your assets remain private.  No.  Because probate is a public legal proceeding, everything that occurs with your estate will become public record.  This means that anyone – including nosy neighbors and salespeople – can go to Court to find out the balance in your accounts, the value of your stocks and other assets, and who you left your property to.

Misconception #4: Estranged family members do not need to be notified of a probate if the Will excludes them from an inheritance.  No.  All heirs must be notified of the probate even if they are excluded from the Will.   It is safer to handle an estate with potentially disgruntled heirs through a Living Trust.

Misconception #5: A Testamentary Trust avoids probate.  No.  A Testamentary Trust is a Trust created at your death by direction of your Will for a specific purpose. Your Will and estate still must go through the probate process.

Misconception #6: Minimizing Estate Taxes should be a primary concern. Probably No. Currently, the exemption level is over $5,450,000 per person. This means prior to having to pay any estate taxes, you need to have assets over that exemption level. While there may be other taxes worth worrying about, namely income taxes on pre-tax retirement accounts, estate taxes often are not of paramount importance.

Misconception #7: Revocable Living Trusts are only for large estates.  No.  Revocable Living Trusts are for anyone who wants to avoid costly conservatorship and probate proceedings.  Those with small estates, and especially their heirs, can benefit from a Revocable Living Trust.

Misconception #8: A Revocable Living Trust must have a separate tax return.  No.  If you are a trustee or co-trustee of your Revocable Living Trust, it does not need a tax return of its own.  Your personal tax return is sufficient for the IRS.

Misconception #9: There are no costs associated with administering a Trust at the death of the original settlor of the Trust.  Not always true.  Depending on what assistance and professional help a Trustee relies on, administering a Trust, distributing the assets, and terminating the Trust can result in fees and costs.  Many trustees hire attorneys and accountants, but these costs are substantially less than the costs of probate.  Typically, these costs are paid by the Trust.

Misconception #10: You have to amend a Revocable Living Trust when you buy or sell your assets.  No.  Your Trust does not have to be changed when you buy or sell assets.  When you buy a new asset, such as real property, a car, or open a new bank account, you simply take title as trustee of your Trust.  If you sell an asset, you sell it as trustee of your Trust.

If you’d like to ensure that you maximize the resources available to your loved ones and keep your family out of Court and out of conflict, schedule a Family Life and Legacy Planning Session.™ We can review your existing plan and help you make adjustments that will help you achieve your goals.

This article is a service of The Estate Planning Group and Davidson Law Office, LLP, your Life & Legacy Planning Lawyers, who believe in developing trusting relationships with families for life. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.

9 Mistakes that Tear Families Apart

Mistake #1: Relying on the Law.  If you do not set up an estate plan, upon your death your property will be distributed according to the laws of your last state of residence.  Often, the law will require the probate judge to give your property to someone other than the people you would have chosen.

Mistake #2: Relying on a Will.  If your estate plan consists only of a Will, your heirs may face many costly problems such as probate and conservatorship proceedings.  A Will is the most common estate planning tool, but it is usually not the best tool to use.

Mistake #3: Relying on Community Property laws.  Relying on the Community Property laws is a position many clients take.  However, your property will still have to go through probate on the death of the spouse.  Also, Community Property ownership requires a conservatorship if a spouse is incapacitated and the home needs a mortgage, home equity line, or to be sold.  Relying on the Community Property laws is not a good estate plan.

Mistake #4: Relying on Guardianships.  These Court supervised proceedings for addressing your physical or mental incapacity are costly, time-consuming and horribly burdensome.  Your properly set up Revocable Living Trust, as well as Powers of Attorney, Durable Powers of Attorney for Health Care, and Physician’s Directives and Releases avoid this issue.

Mistake #5: Relying on the small estate affidavit or informal administration procedure to avoid probate.  Most people assume they have fewer assets than they actually have.  In Wisconsin the small estate exemption that avoids probate is permitted only for estates consisting of less than $50,000.

Mistake #6: Relying on a gifting program as your way of avoiding probate. The law allows you to give away your property at a rate of $14,000 per person per year.  A married couple can give $28,000 per year to anyone they choose without gift tax consequences.  While this is an effective way to reduce the size of your estate, trying to spend your last dime on your last day is difficult to put odds on, plus you lose control of the assets you have given away, and beneficiaries get total control over everything that has been given to them.

Mistake #7: Relying on the Courts to take care of your child’s finances.  If you die intestate (with no Will) or with only a Will, and your property passes to your minor child, the Court will put your child’s money into a Court-supervised guardianship requiring at least annual accountings to the Court.  Naturally, this may require hiring CPAs to prepare accountings, and lawyers to file those accountings with the Court, plus filing fees, all of which comes out of the inheritance.   It also means that the Court determines the person who will serve as guardian of the property, who may not be the person you would have chosen.

Mistake #8: Relying on a form kit for your Will or Living Trust.  One size does not fit all because no two people or families are alike.  From your family’s needs and dynamics to its personalities and values, can you imagine any form kit ever being suitable for any family?  If you use a form kit, you’re asking for problems.  If your will is not properly executed, it will not be valid.  The only estate plan you can rely on is one that is custom prepared by a qualified estate planning and asset protection lawyer.

Mistake #9: Relying on the wrong attorney.  Most attorneys know very little about estate planning.  What’s more, even some estate planning attorneys don’t put much time or energy into comprehensive protections for your family’s unique circumstances.  That’s why I urge you to choose an estate planning attorney who has the primary focus, mission and purpose to help you achieve your family’s estate planning and asset protection goals:  protecting, preserving and passing on more of what you’ve worked for.

If you’d like to ensure that you maximize the resources available to your loved ones and keep your family out of Court and out of conflict, schedule a Family Life and Legacy Planning Session.™ We can review your existing plan and help you make adjustments that will help you achieve your goals.

This article is a service of The Estate Planning Group and Davidson Law Office, LLP, your Life & Legacy Planning Lawyers, who believe in developing trusting relationships with families for life. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.

What happens to my Facebook profile after death?

Facebook! With users easily surpassing 1,000,000,000, Facebook is arguably the most common social media platform. However, what happens to your Facebook page when you pass away? Who has access to your profile upon your death? Can you have your account deleted upon your passing?

Each person has their own Facebook page, right? The whole point of Facebook is you can make that page your own and post, share, like, whatever you want. However, when "you" are no longer available to take care of your page, what happens to it? Surprising to many, access to one's Facebook profile can become highly restricted after a person passes away, even if that person is a mother trying to access her deceased daughter's account. http://thehill.com/policy/technology/335759-german-court-rejects-mothers-request-to-access-deceased-daughters-facebook

As the desire for greater access to decedents' accounts grow, Facebook has come up with several different options for accessing a decedent's page.

One of the most common means is the legacy contact. Each person can designate one of their Facebook "friends" to serve as their "legacy contact" after they pass away. This individual has the authority to write posts on their wall, post articles (e.g. an obituary), and even shut down their Facebook page. This process can work great if you have a desire to notify distant relatives/friends of your passing when most of your communication is through social media. As social media becomes the norm for notification about such events, the legacy contact option is becoming more and more popular. https://www.usatoday.com/story/tech/2015/02/12/facebook-policy-change-allows-one-final-post-after-death/23184757/

Another option is to have Facebook simply delete your profile upon your passing. This option is great for the individual who simply wishes their online persona to die with them. No exposure of past messages or lingering digital presence. Instead, your Facebook profile is simply deleted after Facebook is notified of your passing.

A final option utilized by some, but certainly not condoned by Facebook, involves sharing your username and password with a trusted person and informing them to login as you after your passing and shut down your profile. While this may be the simplest option, sharing username and passwords is a risky proposition, indeed!

While Facebook is just one electronic provider, there is no denying that online accounts are becoming more pervasive. And while Facebook is just one example, with online banking, automatic billing, etc. all becoming much more commonplace, knowing how your online accounts will be addressed are a top priority to ensure an easy and smooth process for the loved ones you leave behind!

If you’d like to ensure that you maximize the resources available to your loved ones and keep your family out of Court and out of conflict, schedule a Family Life and Legacy Planning Session.™ We can review your existing plan and help you make adjustments that will help you achieve your goals.

This article is a service of The Estate Planning Group and Davidson Law Office, LLP, your Life & Legacy Planning Lawyers, who believe in developing trusting relationships with families for life. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.

How can I preserve my assets for my kids and loved ones?

With tax time well behind us, you may be thinking you did well by minimizing what you paid to Uncle Sam and your state in taxes, so more can go to your family.  Every year around tax-time, we’re reminded of how complicated maximizing your money and minimizing tax liabilities can be - and for many people, this seems to be the singular focus for how to preserve assets for loved ones.

Unfortunately, we don’t get much in the way of real information about really preserving our assets through estate planning.  And, regrettably, many of us simply don't think about it, or maybe think we don't have enough to make a difference.

Simply put, this is Penny Wise and Pound Foolish - Your family will likely lose more in the costs of estate administration than you can ever overcome with annual tax tricks. 

Truth is, if you have people you love and any assets at all in your name, you do have an estate and it is worth preserving for the people you love. In some cases, that may mean keeping them out of court and out of conflict, if anything happens to you. (Did you know that the biggest family fights happen over the smallest sums of money or even the personal effects of a person who has passed on? Let’s keep that from happening to your family!)  

If you’re concerned about maximizing the amount your heirs receive and minimizing the amount received by governments, there are several steps you can take.

First and foremost, keep your family out of Court. It’s unnecessary, extremely expensive and almost always public. Consider using a Trust to make it easy to handle your assets if you become incapacitated or when you pass on. 

Second, ensure legal documents are in place for trusted family or loved ones to take care of financial, legal and health care issues in the event of any incapacity.  An incapacity without simple legal planning in place can be devastating to a family, both financially and emotionally. 

Third, while most Americans need not worry about the Federal estate and gift tax ($5.49 million in 2017), if you have an estate near or above that level ($10.9 million for married couples) you need to implement tax minimization strategies to avoid the extreme estate tax hit your heirs will experience. Some will need to think about State taxes, as well, if you live in one of the 20 states that impose them. (Wisconsin does not.) 

If you’d like to ensure that you maximize the resources available to your loved ones and keep your family out of Court and out of conflict, schedule a Family Life and Legacy Planning Session.™ We can review your existing plan and help you make adjustments that will help you achieve your goals. 

This article is a service of The Estate Planning Group and Davidson Law Office, LLP, your Life & Legacy Planning Lawyers, who believe in developing trusting relationships with families for life. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.

10 Estate Planning Questions to Ask Yourself

We are all busy, right? We have things to do, places to visit, and people to see. So, it is understandable why people do not often think about what would happen in an emergency, where something happens and you can no longer do things you want, visit the places you plan, and see the people you want.

While a proper estate plan cannot avoid these issues, it can leave you better equipped to address these situations when they arise.

Here are 10 estate planning questions to get you started. How many of these questions can you answer, "Yes" to?

1.    Have you appointed a trusted financial decision-maker for financial decisions during your life?

2.    Have you appointed someone who knows your health care wishes if you cannot communicate them?

3.    Have you shared your health care desires with your health care decision-maker?

4.    Do your beneficiary designated-assets, reflect your current wishes?

5.    Would someone know how to access your online accounts if they need to access them?

6.    If you wish to avoid the probate process, does your current plan accomplish this?

7.    Have I planned for a potential stay in a nursing home?

8.    Have you shared your wishes with your family, so your desires will be followed upon your death?

9.    Will your medical records be accessible to your family if they need to view them?

10. Does your current plan reflect your current wishes?

Proper consideration of these factors now can avoid needless time, effort, and headaches, for your loved ones.

Take the first step now and talk with an estate planning attorney today about putting in place a plan, so you can answer "Yes" to all ten questions!

How can I preserve my assets for my kids and loved ones?

With tax time just behind us, you may be thinking you did well by minimizing what you paid to Uncle Sam and your state in taxes, so more can go to your family.  Every year around tax-time, we’re reminded of how complicated maximizing your money and minimizing tax liabilities can be - and for many people, this seems to be the singular focus for how to preserve assets for loved ones.

Unfortunately, we don’t get much in the way of real information about really preserving our assets through estate planning.  And, regrettably, many of us simply don't think about it, or maybe think we don't have enough to make a difference.

Simply put, this is Penny Wise and Pound Foolish - Your family will likely lose more in the costs of estate administration than you can ever overcome with annual tax tricks. 

Truth is, if you have people you love and any assets at all in your name, you do have an estate and it is worth preserving for the people you love. In some cases, that may mean keeping them out of court and out of conflict, if anything happens to you. (Did you know that the biggest family fights happen over the smallest sums of money or even the personal effects of a person who has passed on? Let’s keep that from happening to your family!)  

If you’re concerned about maximizing the amount your heirs receive and minimizing the amount received by governments, there are several steps you can take.

First and foremost, keep your family out of Court. It’s unnecessary, extremely expensive and almost always public. Consider using a Trust to make it easy to handle your assets if you become incapacitated or when you pass on. 

Second, ensure legal documents are in place for trusted family or loved ones to take care of financial, legal and health care issues in the event of any incapacity.  An incapacity without simple legal planning in place can be devastating to a family, both financially and emotionally. 

Third, while most Americans need not worry about the Federal estate and gift tax ($5.49 million in 2017), if you have an estate near or above that level ($10.9 million for married couples) you need to implement tax minimization strategies to avoid the extreme estate tax hit your heirs will experience. Some will need to think about State taxes, as well, if you live in one of the 20 states that impose them. (Wisconsin does not.) 

If you’d like to ensure that you maximize the resources available to your loved ones and keep your family out of Court and out of conflict, schedule a Family Life and Legacy Planning Session.™ We can review your existing plan and help you make adjustments that will help you achieve your goals. 

This article is a service of The Estate Planning Group and Davidson Law Office, LLP, your Life & Legacy Planning Lawyers, who believe in developing trusting relationships with families for life. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.

5 Common Misconceptions about Estate Planning

Whenever you work long enough in a selected profession, you often find that there are common questions that arise and many times common misconceptions as well. Estate planning is no different. Here are five of the common misconceptions about this area of law:

 

1. "If I have a will, I will avoid the probate process, right?" Wrong! A Last Will and Testament will not help you avoid the probate process. A Last Will and Testament only informs the Probate Court how you wish to have your assets distributed upon your death.

2. "I can handle a decedent's Estate because I am the Power of Attorney." False. A Power of Attorney is a document that applies only during a person's lifetime. As soon as that person passes away, your authority ceases to exist. If you continue taking actions after a person passes away, you could become legally liable for actions taken. 

3. "I heard a revocable trust protects my assets from the nursing home. Is that true?" Unfortunately, no. A revocable trust will not give you protection from the costs of nursing home care. A slightly different trust, called an irrevocable trust, can offer such protections, but it comes with a number of factors worth considering to see if such a tool is right for you. There are certainly other reasons to consider a revocable trust, but nursing home care protection is not one of them.

4. "Should I be worried about estate taxes?" While there may be taxes due at your passing, the estate tax (also called the death tax) is unlikely to be one of them. Under the 2017 Estate Tax rules, each individual can pass up to $5,490,000.00 at their death without having to pay any estate taxes. This high exemption level means that a very small percentage of the population will have to pay estate taxes.

5. "I do not need to have a trust because I am not wealthy." Wealth oftentimes has little to do with whether you would like a trust or not. More important, is evaluating whether the efficiencies of avoiding the probate process and avoiding potential conflict and time for your heirs, justifies the creation of a trust.

 

Unfortunately, these misconceptions have been repeated and shared so often that they are now viewed as true. To get started on your own estate plan, contact our office today!  We offer an initial complimentary Life & Legacy Planning Session, where your goals and objectives determine what plan is right for you.

How much does a will cost? How much does a trust cost?

By far, one, if not the, most common question asked, is "How much does this cost?" Rightly so, attorneys carry the dubious distinction of being attentive to the time (see this article for an example), oftentimes, going as far to bill in 6 minute increments (or in 1/10 of an hour allotments). So, how much can you expect to pay for a will, a trust, or powers of attorney documents for your family?

 

While each attorney varies how they bill for legal work, there are three general approaches:

Hourly Billing. Just as it sounds, you are billed for the amount of time an attorney works on your particular legal matter. At the end of the day, the legal bill will depend on how long and complex the legal matter is and the time the attorney spent on the legal issue(s).

 

Contingency Billing. Here, the billing amount is based on the total amount recovered from the other party. For example, if you agree to a 15% contingency fee arrangement, and the total recovery is $10,000, the attorney would be entitled to receive $1,500. This type of billing approach is often utilized in personal injury cases and how attorneys (oftentimes the ones you see in commercials) can claim that you will not owe them anything in legal fees unless you win your case.

 

Flat-fee Billing. Flat-fee billing is often used when the legal work is for a particular legal transaction and not necessarily for an unpredictable, personal injury-type situation. This type of approach can have the added benefit of being more transparent on the front end, as you will know the total cost for the particular matter, without incurring additional and unexpected costs.

 

At The Estate Planning Group, we do things a little differently – we prefer to develop trusting relationships with families for life, so we can ensure you and your family are protected no matter what happens, and we let you decide on the appropriate plan and costs.  All our estate planning services are billed on a flat fee basis, so you know the total costs before you make a decision.

The best way to determine exactly what planning will best suit you and your family’s needs and concerns is to meet with one of our attorneys for a Life & Legacy Planning Session, where we can help answer all of your questions, address your concerns, and meet your goals.

At your initial complimentary Life & Legacy Planning Sessions, we walk you through what would happen if something were to happen to you, how your family would handle things, and design a plan to make it easier for the people you love. By knowing what would happen, you can identify those things you want to address in your planning.

 

You, then get to choose the right planning tools from a point of understanding, not just have a lawyer whose motives may not be the same as yours tell you that you need this or that plan.  We can then assist in designing the plan that will take care of your family.  To get started, contact us today!

I was nominated as a Personal Representative in a Will, now what do I do?

A loved one has just passed away and someone tells you the decedent nominated you as the Personal Representative of their Estate in their Last Will and Testament. What does this job entail? What authority do you have? What should be your first steps?

In a nutshell, the role of a Personal Representative (also sometimes called an "Executor") is to oversee the gathering of a decedent’s probate assets, pay all necessary creditors, and make distributions in line with the terms of the Last Will and Testament. The Personal Representative is the "manager," overseeing the entire probate process.

A Last Will and Testament should list a particular person(s) to act as Personal Representative. If a will was never executed and no other estate planning documents were completed, an interested person, usually a close friend or family member, petitions the Probate Court to be appointed.

In either case, the Probate Court determines whether to approve the individual, and if a bond will be required to be paid by the nominated Personal Representative as collateral against the value of the probate assets.

If approved by the Probate Court, Domiciliary Letters will be issued to the Personal Representative. Domiciliary Letters serve as formal proof that the Personal Representative has the legal authority to act. Often banks, credit unions, and other financial institutions require this Letter prior to releasing any information.

Throughout the process of administering an Estate, the Personal Representative will also want to keep a close eye on the deadlines mandated by the Probate Court. Deadlines often include: filing a required Notice to Creditors, filing an Inventory of the decedent's probate assets, and filing a final Estate Account listing all the expenses and payouts to beneficiaries. Sample blank forms can be found on the Wisconsin Court System website: https://wicourts.gov/forms1/circuit/index.htm

The Personal Representative is also responsible for paying any outstanding bills, selling any estate assets, submitting final tax returns, and more. There are often specific time deadlines complicating each step of the process of administering an Estate.

It is not uncommon, given the steps involved, to have a probate proceeding open anywhere from 9-15 months, or longer.

If you have questions or concerns about the probate process or your job as Personal Representative, please click here. We are more than happy to guide you through the probate administration and what to expect as a personal representative.

Do I need a Will or a Trust?

What is a will? What is a trust? How does one differ from the other? Which one do I need? Rightly so, there is a fair amount of confusion concerning wills and trusts. While there is no standard one-size-fits-all approach, understanding each document can help determine the best fit for your family.

A will is designed to instruct the probate court of your wishes on how you want your assets distributed. You can name individuals, charities, or any legal entity to receive an amount or percentage of your assets. From a cost perspective, a will is relatively inexpensive to set up on the front-end.

One drawback of a will is that it must go through probate, prior to any distribution of assets to beneficiaries. Probate involves extra costs, delays and formalities required by the court. The process typically costs several thousands of dollars and takes months or years.

So, how does a trust differ? A trust avoids court intervention and allows your assets to be distributed outside of the probate court. This allows for direct distribution of assets, no court formalities and limited or no attorney fees. A trust, however, is often more costly to prepare than a simple will.

A trust can also offer unique protections for beneficiaries that a will cannot. A trust can specify when, how much and for what purpose a beneficiary can receive assets. For example, a trust may designate that a beneficiary can receive 1/3 of their share at age 25, 1/3 at age 30, and the remainder at 35. Under a simple will, a beneficiary will receive their entire share outright unless they are a minor. This is just one of many unique legal protections trusts offer.

As with any choice there are positives and negatives to consider. A will is not for everyone. A trust is not for everyone. Discuss your goals, your specific family situation, and your concerns with your attorney. Only after weighing these factors can you achieve the best choice for you and your family.

To find out what whether a will or a trust is right for you, considering signing up for a complimentary Life & Legacy Planning Session with one of our attorneys.  We will walk through your goals and objectives to find out what is right for you!  Click here to sign up for this complimentary appointment today!

Will your loved ones know what to do when you are gone?

If you have named children, family, or friends as a successor trustee of your family trust, they likely do not know what the job entails.  Our office encourages talking with successor Trustees now to eliminate some of the unknowns about what it means to serve in this role.

In a standard revocable family trust, a husband and wife are listed as co-trustees during their lifetime.  Only when both spouses pass away, does a successor trustee step in to administer the family trust.

In a nutshell, a successor trustee's job is to secure all of a decedent's assets and distribute those assets according to the terms of the trust.  The trustee can be thought of as a "manager," who keeps an accurate account of all amounts received and any expenses paid out.

The first job of a successor trustee is to gather information about all of the assets the individual(s) owned prior to passing away.  The length and work required depends on the particular assets and how well records were kept.

To complete this job, the successor trustee will need to have a Certification or Affidavit of Trust proving that the Trust is in existence and a certified Death Certificate.

Once trust assets have been discovered, such assets will likely need to be sold or liquidated.  All proceeds should be deposited into a checking account in the name of the Family Trust.  Trust assets that cannot be sold right away should be maintained and updated.

The successor trustee should keep a running inventory of the assets coming in and any expenses paid out.  Taxes will still need to be filed, and known creditors may need to be paid.

Once all creditors and taxes have been paid and assets are liquidated, distributions according to the trust terms can begin.  The trustees should have the beneficiaries sign a form acknowledging receipt of their inheritance and releasing the trustee from any liability.

For more details on the role of successor Trustees, come to one of our future seminars.  We will be discussing these roles and more!!!  Take a look at our upcoming events by clicking the below link:  http://www.theestateplanninggroup.com/upcoming-events/

Why are Powers of Attorney so Important?

We often receive phone calls inquiring about updating their will or trust.  While undoubtedly important, these documents generally only address one event, namely what happens to your assets when you pass away.

Equally important, but often overlooked, is protecting yourself and your family from financial and health care emergencies during your lifetime.  Properly drafted, Powers of Attorney can safeguard you from emergencies that may strike when you least expect it.

 

Everyone over 18 should complete both a Health Care and Financial Power of Attorney (P.O.A.).  While surprising to most people, the Wisconsin Statutes do not make a parent, a spouse, a relative or family member the default decision maker for anyone over 18.  The only alternative is oftentimes a costly and stressful legal proceeding involving the courts.

Each Power of Attorney document, in effect, nominates another person (your "agent") to legally make decisions for you.

 

A Health Care Power of Attorney allows you to designate an agent to discuss your condition with your doctor and make medical decisions according to your wishes when you are unable to communicate those desires.

A Financial Power of Attorney names an agent who can make financial and other non-medical decisions.  An agent’s authority can be immediate at the time of signing the document or it can take effect only in the event of "incapacity"–that is, when you are unable to act for yourself.

Undoubtedly, the role of agent is an important responsibility that should not be lightly considered.  So, who should you choose as your agent?

Naming an individual who shares your same values and beliefs can help ensure your wishes are followed.  We also suggest discussing with your agent any specific health or financial priorities and wishes you may have.  This conversation helps to avoid future questions about your goals and objectives when your agent is called upon to act.

Both a Health Care P.O.A. and a Financial P.O.A. can eliminate future conflict by laying out your wishes and designating someone to make decisions when you cannot.  These should be a key part of your estate plan.

Make 2017 the Year You Complete Your Estate Plan!

The start of the New Year almost always brings with it new goals and resolutions.  So, what is the best way to meet these goals head-on and successfully complete them?  Oftentimes, the key is in not taking one giant leap, but small steps, providing us the best possible chance to succeed!

 

With estate planning, adopt a similar approach.  Taking manageable steps can make all the difference between completing your estate plan and giving yourself and your family peace of mind, and putting it off for another year, potentially putting your loved ones at risk in the event something happens to you.  Here are just a few benefits of putting an estate plan in place:

 

Nominate an individual you trust to make health care decisions:  Nominating a trusted individual who knows your health care wishes can ensure your desires are followed.  Without planning ahead, your family is likely to have to go to Court before making health care decisions on your behalf, incurring additional money and time during an already stressful period.

 

Name someone to manage your financial affairs if you are unable to do so:  Executing a Financial Power of Attorney ensures your financial affairs continue seamlessly during your life and any legal decisions can be made on your behalf.  In the absence of a Financial Power of Attorney, no one can legally make these decisions for you, whether that person is a spouse, a child, or a close friend.

 

Provide for your children and loved ones from future potential creditors, predators, and unnecessary taxes:  Protecting your loved ones from others and sometimes themselves, can ensure your desires are followed.  A proper plan promotes family harmony upon your passing by making the process proceed smoothly without undue stress and delays.

 

Protect your assets, both during your lifetime and after:  Planning ahead can make all the difference in protecting your most cherished assets for yourself and your family members.  Advanced planning options to protect assets in the event of a need for advanced health care expenses may be warranted to protect your assets.

 

To take the first step toward giving yourself peace of mind and a lasting legacy come to our free educational seminar being held in the Village of Hilbert Community Room on Saturday, February 4th at 10:00 AM.  We will be providing an overview of how a properly drafted comprehensive estate plan can save your family time, money, and promote harmony among your beneficiaries.  Please call or e-mail our Client Services Director Sandie at sandie@epgwi.com to reserve your spot today!

 

 

For more information about this seminar and our upcoming events, go to www.TheEstatePlanningGroup.com today!

Protecting Your Minor Children from the Unexpected

Parents often cite a child’s birth as one of the happiest days of their life.  The child will bring many moments of happiness to your lives and undoubtedly a few trying moments, too.  However, as parents, you also need to consider who would care for your child if you no longer can.  Estate planning can offer some valuable assistance.

A simple will executed by each parent is a common method used to protect minor children.  A will is the only legal avenue (without court intervention) where parents can nominate a legal guardian for children under 18.

So, who should you nominate as a guardian?  Beyond recommending someone you trust and respect, here are some other factors to consider:

·         Guardian’s Location—Will a guardian’s location require a change of schools for your children; will the location allow your children to remain close to existing friends and family?

·         Guardian’s Values—Does the guardian share your core beliefs, a similar philosophy in raising children, religious views, etc.?

·         Guardian’s Suitability—If a guardian has children of their own, could they care for your children too; does the child already have a good relationship with the prospective guardian?

Once a guardian is chosen, the next question is how financial assets should be held to best benefit your children.  A testamentary trust, formed in a parent’s will, is a great tool to hold such assets.

This type of trust secures assets left for your children and can specify an age or ages for asset distribution.  Many parents distribute a percentage of a child’s share every few years, minimizing potential excessive spending of an inheritance at one time.  Without a testamentary trust, all assets are distributed when the child is no longer a minor.  To oversee this trust, you may nominate the above-named guardian, a financial institution, or an entirely different person/entity.

Protections for younger children are absolutely vital. Whether that means completion of a simple will or other estate planning options, this issue deserves consideration by you and your family.