1323680_question_mark sxchu username 7rains.jpgBecause Wisconsin residents are living longer, their chances for becoming incapacitated before they die have increased dramatically in recent years. Recognizing the potential for incapacitation as part of your Wisconsin estate plan is important in order to avoid unnecessary legal battles and guardianship proceedings (sometimes called “living probate”).

If the capacity of an individual was unclear at the time their estate plan was created, the documents may be questioned either by those who seek to inherit, or by a probate court. Luckily, demonstrating the capacity to create a will or other planning document in is fairly easy and according to now codified Wisconsin case law, anyone who objects to a decedent’s testamentary capacity must do so “by clear, convincing, and satisfactory evidence.” Still, it is important to create your estate plan before an unexpected illness or incapacitation arises.

Today, most estate plans in Wisconsin will include a revocable living trust, a will, a power of attorney for both healthcare and finances, and a living will. A revocable living trust, financial power of attorney, and health care power of attorney will normally name someone else to take over decision-making in the event of the creator’s incapacity. In this way, a comprehensive estate plan preemptively provides for any potential impairment. Additionally, a thorough estate plan may spare your loved ones from going through the process of living probate.

1353627_tullips sxchu website.jpgIn Wisconsin and other states, probate is the legal procedure through which a person’s assets are transferred after their death. The process is supervised by a court of law and designed to protect anyone with a legal interest in the deceased person’s estate. Probate is used to distribute a decedent’s assets not only to beneficiaries, but also to creditors and taxing authorities.

Any Wisconsin estate that exceeds $50,000 in value must go through the probate process unless the property is subject to certain exemptions. Some exemptions include assets that are titled jointly with another individual, life insurance proceeds, and any retirement funds where a beneficiary other than the deceased person’s estate was chosen. Additionally, assets placed in a revocable living trust are not subject to the probate process.

Continue reading

Over half of American adults and approximately 92 percent of adults under the age of 35 have not written a will. Most assume they do not need a will because any assets left behind will automatically be inherited by family members. Although assets may be distributed according to state intestacy laws, the process can be lengthy. With proper estate planning, however, you Designating a Guardian for Your Childrenmay be able to avoid placing any additional emotional or financial burden on your family after your death.

It is a good idea to create a will once you begin acquiring assets or start a family. In addition to designating how your assets will be distributed upon your death, your will designates an executor who will manage them until they are distributed. If you are a parent, you should also select a guardian who is likely to survive until your minor children reach the age of majority in the event both parents pass away.

Other useful estate planning documents include a durable power of attorney and a healthcare proxy. A durable power of attorney will allow your designee to make financial and legal decisions on your behalf if you become unable to do so. Similarly, a healthcare proxy allows a designee to make medical decisions for you if you become incapacitated and cannot do so yourself. By designating a power of attorney or healthcare proxy, you may save your family from being required to take the matter to court in the midst of an unexpected healthcare crisis.

Continue reading

Five decades after the Beatles first sang “I don’t care too much for money, money can’t buy me love.” issues of money and love often hit a sour note where inheritance is concerned. The generation that listened to the Fab Five on a record player and the generation that streams videos on their smart phones have vastly different views on whether the distribution of assets to heirs reflects caring or control.

While trying to understand whether or not money equals love is subjective and involves individual family dynamics, the impact of inherited wealth is a clearer area to understand.  Research by the Williams Group indicates that 70% of wealthy families lose that wealth by the second generation. Even more shocking, and disheartening is the study’s conclusion that 90% of the wealth is gone by the third generation.

Perhaps the most important way to connect money and love is to love your children enough to do your best to instill solid values where finances are concerned. Feeling entitled to money someone else earned can result in finding it easier to spend it without thinking through your decision. Because of this, it is important to make earning money and saving a percentage of it a lesson children learn from a very early age. There is truth in the statement “We aren’t raising children, we’re raising future adults.”

It’s one of the most emotional topics to deal with, yet the last thing you want to do is leave your family and loved ones scrambling to make sure they are legally and financially taken care of after you pass.

Just over 50% of Americans have a will set up. In many states, this means that when you die, your estate will be decided on by the courts. It could be heavily taxed and distributed among anyone that claims they have a stake to it or be awarded to one party that you may not want to have control of your financial affairs.

If planned appropriately, your estate could be a wonderful gift to leave your family. Even if you feel like you don’t have enough in assets to warrant a will, you should still consult an attorney. Most attorneys offer free consultations and you may find that by setting things up while you’re still here to oversee them, you may end up leaving more behind to your family than you imagined you could.

As you begin planning for retirement and doing general estate planning, do not overlook the importance of end of life health care planning.

With people living longer than ever before, the reality is that you may not be in a position to communicate what your wishes and desires are for health care as you near the end of your life. It’s important that these are set up ahead of time utilizing something like an advanced healthcare directive.

An advance health care directive is simply a written document that appoints another person to make health care decisions on your behalf when you are unable to. In many cases, this directive will spell out specific situations and how you want them handled, such as do not resuscitate orders.

IRA’s can be complex and confusing sometimes. There are so many rules and laws that must be followed to avoid penalties. One common area of confusion surrounds the required minimum distribution (RMD). The RMD is simply the minimum amount that an IRA holder must withdraw from their account once they hit the mandatory age to avoid being hit with penalties. This mandatory age varies from state to state but is typically age 70 ½ in most states.

When dealing with any aspects of your financial life, especially your IRA’s, it is always best to consult a financial planner that has experience in IRAs and tax laws.

Required minimum distributions seem to create the most questions when it comes to traditional IRAs. One of the most common questions pertains to taxes. Will the RMD be taxed? This depends on how your IRA is set up. If your IRA contributions are done pre-tax, then the answer to that is yes. You will pay taxes on the RMD. If you had your contributions taxed at the time of the contribution (which is not the typical scenario) you will not have your distribution taxed. Just remember that at some point taxes will have to be paid on this money. If you didn’t pay taxes when you made the contribution you will pay taxes at distribution.

When talking about families and inheritance, studies show that while financial assets are important, family values and family history take the driver’s seat. Most people treasure family stories and life lessons regardless of their age, financial situation, or race. A simple case would be comparing the reactions of siblings on two topics: a family legend or a new car. Chances are, the stories of the new car will stop after one month while the family stories will continue to be told and enjoyed for decades. This is because family stories, family values, and life lessons learned by members of the family are integral to its legacy.

safeDepositBoxA very recent study though shows that millennials think of inheritance as a “bonus” but expect to get that bonus – and are expecting large sums of up to $100,000. However, they are willing to lower that figure because many parents are already helping their adult children financially with student loans and other expenses.

An article published on www.Marketwatch.com reported that one in three Americans will “blow their inheritance” because they are not prepared to handle it. In fact, those who inherit money tend to spend it quickly and one-third end up with negative savings two years later.

Parents have a responsibility to teach their children money management so any windfall they get will be spent wisely. Inheritance, while a “bonus,” should not be just “fun money.” In today’s economy, a $1,000,000 inheritance does not even guarantee a comfortable retirement for a couple beyond their fifties. Continue reading

The young often think of themselves as invincible in the sense that in their protected world, nothing bad can happen to them, especially with their parents around. Studies show that over 90% of adults under 35 do not have a will, providing reasons like:young-family

  • It’s not necessary.
  • It’s too complicated for me to deal with right now.
  • It’s too expensive.
  • My parents will take care of all that.
  • I won’t need it for a long time anyway.
  • It takes too much time

According to surveys done by USA Life Expectancy, adults aged 15 to 34 rarely die from medical causes but the figures are high for accidents, poisoning, suicide, homicide, and injuries. This suggests that for young adults, death often comes unexpectedly. Continue reading