Wisconsin Probate & Estate Planning Blog

New York City may be a long way from Madison, both literally and figuratively, but the facts surrounding the death of one multimillionaire from Staten Island illustrate some truths about estate planning, and the failure to plan, that are nearly universal. The death of Roman Blum highlights some of the unintended consequences that sometimes result from failing to plan. In the case of Blum, a real estate developer with a $40 million estate, one such consequence may be having his entire estate go to an unlikely beneficiary: the State of New York.

Blum, a Holocaust survivor from Poland, married his wife, Eva, shortly after the end of World War II and emigrated to New York in 1949. Blum became an extremely successful real estate developer, building several hundred houses in Staten Island. The Blums had no children. The developer reputedly had multiple mistresses. "There were lots of women on the side. It was a way of life," Charles Goldgrub, Blum's godson, told the New York Times. However, no records indicated that Blum had illegitimate children. The couple eventually divorced and Eva died in 1992. Roman did not remarry.

According to Blum's long-time accountant, Mason D. Corn, he could not persuade Blum to act until his waning days. "Two weeks before he died, I had finally gotten him to sit down. He saw the end was coming. He was becoming mentally feeble. We agreed. I had to go away, and so he told me, 'O.K., when you come back I will do it.'" Blum died before Corn returned. Blum's friends speculated that his experiences during the war may have shaped his aversion to estate planning: coming so near to death during the Holocaust may have rendered him averse to contemplating his mortality, and his deep need for secrecy, also a product of those experiences, made him reticent to confide in a lawyer.

Blum left no known heirs. Even if Eva had survived him, she would have received nothing, since the couple was divorced. With Blum leaving no wife and no children, a search ensued for a blood relative. The administrator handling the case told the Times that his worldwide search had, to date, yielded no one. If the search comes up empty, the State of New York receives the developer's entire estate, the largest amount ever to escheat, or revert to the state. "He was a very smart man but he died like an idiot," Paul Skurka, a friend and fellow Holocaust survivor, told the Times.

"The times, they are a-changin'" says a famous Bob Dylan song. This is definitely true regarding family units. Fewer couples resemble the Ward-and-June-Cleaver model. More and more people, as they begin the path of estate planning, are married to a second, third or subsequent spouse. A careful plan can help ensure that you leave that spouse the legacy you intended.

Planning for a second spouse can be more complicated than a first spouse. If you and your spouse married later in life, a greater possibility exists that you each brought your own assets and wealth to the marriage. In addition, you may desire to leave that wealth to your own children from a previous marriage. In some cases, both parties are well off, and do not need anything from the other. Alternately, your spouse may have more limited means and a need for assistance if he/she is widowed.

Regardless of your spouse's financial condition, state laws exist to prevent individuals from entirely disinheriting their spouses. Wisconsin is a "community property" state, meaning that your spouse automatically has a right to 50% the earnings accumulated by either of you during the marriage (unless there is a written marital property agreement or "prenuptial").

Another concern for some second marriages involved a desire to care for a new spouse, but not for his/her children from a previous marriage. In the past, some individuals established estate plans that placed assets in a trust for the benefit of the spouse. The trustee distributed assets to the spouse during his/her lifetime and then, after that spouse died, the trustee distributed the remaining assets to the trust creator's natural children.

If you and your spouse agree to such a trust arrangement, or agree that he/she will receive nothing (or very little of monetary value) from your estate when you die, it is important to obtain your spouse's consent in writing. A prenuptial or postnuptial agreement can be effective at documenting this consent.

If you look around the Internet, you may see several sources that discuss the question, "Should I create a will or a living trust?" In a significant variety of circumstances, the answer is, "Use both." Whether your estate plan includes a living trust or what's called a "testamentary trust," a will is an integral part of your Wisconsin estate plan.

Regardless of what document serves as the primary asset-distribution direction upon your death, everyone should have a will. Even if you have a living trust, you still need a will. In estate plans with a living trust, a "pour over" will serves an essential role. Your pour-over will is your estate planning "insurance policy," in a manner of speaking. Much like how you maintain an insurance policy to assist when something unexpected happens to your home or vehicle, even though it is possible you may never need it, your pour-over will steps in to help by directing any assets that you did not transfer into your living trust. You may never need your pour-over will, if you place all your assets into your living trust or accounts with death beneficiary designations, but the pour-over will operates as a vital "back-up" to your living trust.

Chances are, if you have a living trust, the asset-distribution plan you laid out in that document constitutes an accurate and current representation of your estate planning objectives. The concept of the pour-over recognizes this and, rather than creating another set of distribution instructions, or duplicating the instructions from your living trust, the pour-over will simply directs that all assets under its control go to your living trust. These assets do not avoid probate, but the pour-over will does ensure they become part of your trust's assets, where the carefully laid-out instructions you spelled out there can control.

Some estate plans use a trust that is created in a will; that trust is not a living trust and the will is not a pour-over will. This is a testamentary trust. These types of trusts do not avoid probate, and are matters of public record because they are part of your will, but they may still serve an important need. Often, people use testamentary trusts as a way to provide financially for their minor or relatively young children. In the case of famed singer Whitney Houston, she left her wealth, of approximately $20 million, to her daughter, Bobbi Kristina. The singer's will, however, did not distribute the huge estate directly to the 19-year-old daughter. Instead, Houston's will placed the assets in a testamentary trust, directing her daughter to receive payouts upon her 21st, 25th, and 30th birthdays.

Having someone select you as the personal representative of his or her estate can elicit both positive and negative reactions. You may be honored, but at the same time, you may feel intimidated by the responsibility that comes along with it. Before you agree to take on this role, you should understand exactly the wide variety of responsibilities involved.

One of the first duties a personal representative (which is also called the "executor" in some other states) is tasked with is to submit the deceased's will to probate. According to Wisconsin law, once you learn that you are the personal representative, you must file the deceased's original will the Register in Probate for the appropriate county within 30 days. This filing is required even if the deceased estate does not require an actual probate process.

Your role as personal representative also makes you responsible for protecting the estate's assets. This often involves changing legal ownership of assets from the deceased to the estate, and continuing to pay the bills. This usually involves opening a separate bank account in the name of the estate from which the bills are paid.

The personal representative must also determine exactly what is contained in the estate. This means creating an inventory of assets, including the deceased's real estate, bank accounts, investment accounts and personal property. For some of these assets, including real estate and some others, you may need to obtain an appraised value of the item. The Internal Revenue Service requires appraisals for individual items with a value of $3,000 or more or, if you are dealing with a group of similar items, the number is $10,000. This means that, if you think the value of an asset is above, or even close to, that dollar amount, you should get the appraisal.

Paying the estate's debts is another key element. A personal representative must also locate, and then pay, all of the estate's creditors. The court will set a deadline by which everyone to whom the deceased owed money must present their claims. This period for creditor claims is between three and four months. The personal representative must publish a newspaper advertisement notifying creditors to submit their claims before the deadline.

Of course, one of the most essential tasks is distributing the estate's assets and disposing of estate property. This may require retaining professionals to locate some beneficiaries named in the will. It may also necessitate working with real estate agents to sell property, or holding an auction or "estate sale" to dispose some assets.

While your living trust or will is a very important document, a comprehensive estate plan goes beyond just a plan for distributing your assets upon your death. Another essential component of a complete estate plan is power of attorney, which ensures that you have a person of your choosing to make decisions for you in the event you become incapacitated.

A power of attorney is the legal document where you, as the "principal", designate another person, or group of people, as the "agent(s)" authorized to make decisions or take action on your behalf. Powers of attorney may be extremely narrow or broad. In the estate planning context, powers of attorney are typically quite broad. That's because these powers are the most necessary once you've lost the capacity to make decisions for yourself and, if that happens, they are equipped to make sure that the person you desire is empowered to make virtually any decision on your behalf.

These powers may govern financial and other property matters, or may pertain to health care decisions. In the context of estate planning powers of attorney, these powers are almost always "durable". A durable power of attorney remains effective even after you become incapacitated. This is essential since, in most cases, the occasion of your incapacity is exactly the point at which you'll need your powers of attorney.

The law creates a degree of flexibility regarding how you structure your powers of attorney. You can have powers of attorney that become effective as soon as you sign them, or that only take legal effect once you become incapacitated. You can designate the same agent, or agents, to make your financial decisions and health care decisions, or you can name completely separate people to serve in each capacity. You may assign one person as your agent, or you can designate a group of people to serve. If you designate a group, your power of attorney can require all of them to agree before they may act, dictate that a majority of them must agree, or state that any one of your co-agents can act on your behalf.

If you've gone to the effort of creating an estate plan, chances are you have a specific sets of goals you want to accomplish with your assets after you die, whether that involves benefiting your family, friends or charity. One way to thwart this entire well-laid set of objectives, though, is to leave behind a plan that is open to defeat in the courts. A careful structure to your plan may be the key to avoiding this trap.

A recent article in the Wisconsin Bar Association's monthly journal highlights the benefits and drawbacks of one tool for avoiding probate: the pay-on-death (POD) designation. POD designations can be a helpful and important element to an estate plan geared toward an objective of avoiding probate.

POD designations are convenient and inexpensive, but are not without risks. Sometimes, POD designations are especially vulnerable to a court challenge after you die. For example, say you have a friend who provides daily care for you in your later years and you decide to place a POD designation on your investment account leaving the entirety of it to your friend. Your will (or trust) leaves all of the rest of your assets equally to your children.

In this case, an unhappy child might decide to sue, claiming that your POD designation was the result of your friend's undue influence over you. If this happens, Wisconsin law says that your friend cannot testify regarding what you told him/her about why you made the POD designation. With that impediment, it may become more difficult for the court to see your true intent, and easier to conclude (erroneously) that your friend exerted undue influence over you.

There are a variety of ways to avoid this. One is to leave a clear trail of evidence about your decisions, and the reasons for them. Talk to impartial friends or relatives about what you're doing and why you're doing it. Write down your decisions and the specific reasons for them. This helps avoid a situation where the court, as evidence before it, has only the testimony of a disgruntled relative about a suspicious figure who spent time with you before your death and walked away with a sizable portion of your assets.

You've spent a lifetime accumulating wealth with the hope of leaving a legacy after you pass away. However, you know your loved ones best, and know that, sometimes, simply handing your children or grandchildren a large sum of money or sizable assets is not necessarily the best way to take care of them and leave the legacy you want. Fortunately, with proper estate planning, you can take steps to help protect the legacy you leave behind.

In most families, there are some members who are more stable than others. Perhaps you have a child with an unstable marriage, a spouse who as a substance abuse issue, a grandchild who is notoriously poor at managing money or another loved one whose career situation places him/her at great risk of being sued personally. In each of those situations, you may worry that providing a large, direct inheritance could prove risky or unwise. Spendthrift trusts or Beneficiary Protection Trusts are tools that may be helpful in these circumstances.

A spendthrift trust is a special type of irrevocable trust created for the benefit of a loved one, but not controlled by that beneficiary. The trust is managed by a trustee who is independent of the beneficiary. These trusts often exist in cases where the beneficiary has problems managing money or is otherwise financially unstable. In this way, the trust can allow you to provide for your financially unstable loved one, not just throughout your life, but also for the duration of their life as well.

A Beneficiary Protection Trust is also an irrevocable asset protection trust, but it is controlled by the beneficiary most of the time. However, the beneficiary is removed from control and the trust is locked down if there is an attack on the trust assets by divorce, a lawsuit, etc. This type of trust allows the most flexibility for the beneficiary, while offering very significant protections.

Over the last several years, authors have expended much ink discussing the topic of probate and, specifically, avoiding probate. Today, with the continued evolution of the law, in Wisconsin and elsewhere, you have more choices than ever if you want to create an estate plan designed to avoid probate.

Using the probate process can be helpful in some circumstances. For example, opening a probate estate creates a specific deadline date by which time all creditors must request payment or forfeit their claims. If these types of creditor issues are not a significant factor for you, then you may decide that probate's advantages are too few, given the drawbacks. Even a relatively simple and straightforward probate administration can take many months and cost thousands of dollars. Additionally, probate cases are public records, and anyone may view them.

For those seeking to avoid probate, many vehicles exist to accomplish this end. A revocable living trust offers many potential benefits to address a variety of issues. The process of "settling" a living trust (which means distributing the trust's assets upon the occasion of the creator's death,) does not require court intervention and is not a public record. This means, that, if many cases, distributing your assets using a trust may often be more private, less expensive and less time consuming than using the probate process.

In addition to trusts, other tools exist to pass assets outside probate. The law allows you to place "pay-on-death" or "transfer-on-death" designations on many assets, like bank accounts, stocks and bonds. These designations work like a life insurance beneficiary designation. The beneficiary only needs proof that he/she is the beneficiary, and that the owner is deceased, in order to take ownership of that asset.

Additionally, since 2005, Wisconsin law permits owners to place a transfer-on-death designation on real property. To accomplish this, the owner records a "transfer-on-death deed" with the appropriate county's register of deeds. These deeds are fully revocable during your lifetime. You may either record a new deed or simply revoke the transfer-on-death designation. The law does not require you to notify the beneficiary before revoking the designation. Transfer-on-death deeds may be useful for consumers who have homes, or other real properties, of significant value, but little else in their estates.

Most everyone remembers the childhood song, "It's A Small World." With today's technological advances, that world is getting progressively smaller. Along with this technology, the realities of modern economics mean that more people choose to be, or must be, more transient than ever. Sunny retirement prospects, or distant job opportunities, may lead you further away from home and family. In addition to impacting relationships, this affects your estate planning, as well.

If you have not created an estate plan, you may be wondering what type of plan best fits your more mobile lifestyle. Perhaps you own multiple properties in multiple states. You may own separate residences for winter and summer, or perhaps job relocation during the housing crash of the last decade left you unable to sell your previous residence. For those with real estate assets in multiple states, a revocable trust may be very beneficial. If your estate plan centers around a will, the law says your executor must probate your will in every state where you own property. So, if you own your residence in Wisconsin, a rental property in Iowa, and a vacation home in Florida, that would require three separate probate procedures to distribute your assets.

With a revocable trust, however, your estate could avoid the expense and time of these processes, as a trust permits your successor trustee to distribute all of your assets upon your death, anywhere in the U.S., regardless of what state your assets, or you, are at the time of your death.

Another consideration is the location of your loved ones, particularly, the person or people you want to oversee the distribution of your assets upon your death. Each state has varying laws regarding a non-resident serving as an executor of an estate. Some forbid it entirely. Wisconsin does not bar it, but it can be complicated, as many probate courts prefer that executors of the estates under their jurisdiction are Wisconsin residents. The probate judge may exclude your preferred person from serving based upon where he/she lives. Even if the judge approves your executor, Wisconsin law requires your executor to appoint a business or person residing in Wisconsin to serve as her/her agent, and the court may require your preferred executor to post a substantial bond in order to serve.

If you are like many people, you understand that planning your estate is extremely important, but still have not put a plan in place. As you contemplate options for creating a plan, it is important to understand the advantages of a well-written, customized plan, and the risks of a "one-size-fits-all" one.

Recent reports by respected sources like Forbes magazine and the New York Times report that anywhere from 57 to around 70 percent of American adults have no will. A 2009 survey, conducted by Harris Interactive, found that more than 70 percent have no living will. Why do so few people plan? The reasons vary, but many are driven by fear or uncertainty. Put off by these fears, some people gravitate to options they see as simpler or less intimidating. They may purchase a kit from the Internet or a book store, or they may accept a visit from an in-home salesperson seeking to talk to them about "avoiding probate."

The Wisconsin Bar Association explained the risks involved in using a kit product or the services offered by a salesperson, especially when it comes to trust planning. "Do-it-yourself kits and formbooks are available, but these tend to take a one-size-fits-all approach, rather than meeting your unique needs." The Bar also explained that some "unscrupulous businesses sell revocable living trusts, even if unneeded, to gain access to your private financial information. Then they try to sell you other financial products."

It is important to keep in mind that a poorly-crafted estate plan can be worse than no plan at all. A plan that is not customized to meet your individual needs may not function the way you want, and may fail to achieve your estate planning goals. The documents you received through your in-home salesperson, or from your form book, may not comply with current Wisconsin law. Wisconsin has specific laws regarding the proper legal format for wills, trusts, powers of attorney and living wills, including what information the documents must include, certain language that is required, and how they must be signed, witnesses and notarized. Failure to follow these laws precisely may make your documents legally invalid and, therefore, useless. Additionally, trusts require significant follow-up work after signing the documents, to make sure they are properly funded. An unfunded trust governs nothing, making it, like an invalid document, useless.

Everyone is aware of the need for conducting periodic maintenance on their cars and their homes, or undergoing periodic checkups for their health. But what about your estate plan? Simply adopting a "create it and forget it" approach to estate planning, with no checkups, can sometimes be harmful to your estate plan's well-being, as one case going before the U.S. Supreme Court, Hillman v. Maretta, highlights.

In 1996, Warren Hillman named his wife, Judy, as the primary beneficiary on his Federal Employees' Group Life Insurance (FEGLI) policy. Two years later, the couple divorced. Warren remarried in 2002. Warren and his subsequent wife, Jacqueline, remained married until Warren died in 2008. However, Warren's insurance policy beneficiary designation remained unchanged from when he created it in 1996, leaving ex-wife Judy as the named beneficiary.

Both women filed claims for the $124,000 policy benefit. Hillman's ex-wife ultimately received the payout, because the policy named her as the intended death beneficiary. Jacqueline sued, contending that, under Virginia law, Warren and Judy's divorce triggered an automatically revocation of the beneficiary designation in favor of Judy. The Virginia Supreme Court, however, ruled for the ex-wife, deciding that federal statutes governing FEGLI trumped Virginia law, and required giving first priority to "the beneficiary or beneficiaries designated by the employee," which, in this case, remained the ex-wife. Under the federal law, Judy's relationship to Warren was irrelevant.

The wife appealed the ruling and the U.S. Supreme Court has agreed to take the case. What makes the facts of this case such a cautionary tale is that the dispute, and subsequent protracted litigation, was entirely avoidable. There are many common mistakes people make with estate planning, with the chief one being never creating a plan at all. However, even those who create a plan fall into traps too often, with the Hillman case hinting at two of those.

Some parents dream of the day when their children will take over a family business. For those whose children have the same passion for the same line of work or business, seeing this occur can be a "dream come true." For others, their dream becomes complicated if for some reason their child or children are not remotely interested in the family business, or the children have different levels of interest. Consequently, having a plan in place is important so that the business is handed down appropriately.

If there are no children interested in continuing to run the family business, there are a couple of alternatives. One is simply to sell the business altogether. The other would be to name someone outside the family to be the successor. In either of these situations, the children would not be burdened with the day-to-day operations but they could still benefit from the sale or the profits from it.

Where it gets sticky is when there is one child who wants to take over the family business and the other who doesn't. Unfortunately, giving shares of the business to the children equally might create future conflict if there are disagreements about the way the company is being run, among other things.

There are advanced planning tools available that can facilitate an equal and equitable transfer. This will help to avoid unpleasant situations that can arise from simply giving the business to the kids and letting them sort it out.

Here are some estate planning tips on how inheritance equalization can be accomplished from an experienced Wisconsin probate and estate planning lawyer. These tips are particularly important because in many family-owned businesses most of the assets are tied up in sweat equity. If there is one child that has been more involved in the business than others, you have to consider whether their illiquid equity will factor into the distribution of the assets of the estate to the other children.

One solution is to equalize inheritance between children with the use of life insurance. Essentially, the children who are going to take over the business will inherit stock in it and those who are not involved will receive an equal amount from a life insurance policy naming them as beneficiary, in addition to other assets that are not business related.

Another option is to simply sell the business, or name a successor from outside the family to run it. In either of these scenarios, the children can benefit from its sale or the profits from its continued operation.

If you do not have adequate assets outside the business and are unable to insure your life for enough to even things out, your next question should be: Which goal is primary? 1. to make certain that your children are treated fairly and equally, or 2. to make sure the business has the best chance of surviving.

Wisconsin's 2009 statute creating a domestic partnership registry survived a key court challenge, as a state appeals court upheld the constitutionality of the law recently. Even though the statute survived the lawsuit, its scope is still limited in nature, making a thorough estate plan a must for same-sex couples.

In its December ruling, Wisconsin's 4th District Court of Appeals ruled that, when the state's voters decided in 2006 to amend the state Constitution to ban gay marriage, that referendum did not bar the establishment of the sort of same-sex partnership registry created by the legislature three years later. Because the domestic partnership registry affords registered same-sex couples 43 enumerated rights, as opposed to the 200+ rights or privileges granted to married couples under state law, the court decided that the registry legislation did not create a "legal status identical or substantially similar to that of marriage," and, as a result, was constitutional.

Although the Wisconsin registry provides several essential rights, it only goes so far, and registering a partnership with the state is not a substitute for careful, complete estate planning. As Fair Wisconsin, a rights group that defended the partnership legislation before the Court of Appeals, explained in its reference guide regarding the registry: "these privileges are limited and do not take the place of having a health care power of attorney, disposition on death authorization, HIPAA authorization, and similar documents that provide much stronger protections."

The registry legislation does not give registered partners any rights regarding important items like funeral or burial arrangements or care for minor children. Additionally, certain couples may not qualify for registration. For example, if one partner is transgender, and the state does not identify them as members of the same sex, the state may not allow them to register under the law.

The law, however, does provide several essential rights and privileges, including the right to visit a registered partner in the hospital and to inherit from a deceased partner, even without a will. Recent cases in other states highlighted the importance of rights like visitation. In one 2007 example, an Indiana man sought guardianship over his partner of 25+ years after the partner suffered a stroke. The stricken man's parents asked the court to appoint them guardians.

When we purchase new cars the dealership issues us a maintenance schedule that we must follow in order to keep it in proper running order and to ensure that we comply with necessary warranty requirements. The same thing holds true when we purchase a new set of tires. In order to get the most mileage out of them and for proper wear, rotate them every 7,000 miles.

The bottom line is that proper maintenance is necessary to make your car or truck perform well and tire rotation is necessary to get the maximum mileage out of your tires. We accept these marching orders and make certain we comply with the regular maintenance schedule.

When was the last time you thought about reviewing your estate plan to determine if it was in need of maintenance? In order for your estate plan to do everything you intend it to do, now might be a good time to examine it and see if changes ought to be made. Chances are that your family, your assets, your wishes and needs have changed over time since your initial estate plan was put into effect.

For example, if you are a mature couple, the initial simple will you had drafted for your family as a young couple would hardly be considered sufficient for your estate planning today. Perhaps your family was incomplete and as a growing family more children came along. Maybe you are no longer married to the person listed as the primary beneficiary in your will, on your life insurance policy or on your retirement accounts. Perhaps health issues have entered into the equation that need addressing, as well as provisions for the grandchildren who are now such an integral part of your life.

Just like your car or your tires, there comes a time when nothing is going to solve the problem except to replace them. The same is true for out-of-date estate planning tools that no longer are in touch with your family, assets and the current tax laws.

Here are a few tips from an experienced Wisconsin probate and estate planning lawyer to help you be on the lookout for times in your life that call for examination and maintenance of your estate plan. Even if there have been no major changes during the year, make sure to examine your plan every December so that necessary changes, if any, can be initiated at the beginning of the New Year.

Some events that might cause you to consider updating your estate plan are:

• Marriage


• Divorce


• Death of a spouse


• Birth of a new child or children


• Declining health


• Increased or declining assets


• Trustee or guardian's incapacity to serve

The fiscal cliff budget deal reached by Congress at the beginning of 2013 was complex and confusing to many Wisconsin residents but its effects are important to know, as portions of the bill can directly impact your long-term estate planning.

In December 2010, Congress and President Obama reached an agreement on a piece of tax legislation called the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act ("TRUIRJCA"). This law set the estate tax exemption at $5 million, with that amount indexed for inflation in 2012. The law expired at the end of 2012. As that expiration approached, the estate tax exemption was poised to decline sharply (to $1 million,) and potentially trigger a huge impact on estate planning.

To avert this, Congress passed the American Taxpayer Relief Act of 2012 ("ATRA"), which President Obama signed on January 2, 2013. The compromise permanently set the estate tax exemption at $5 million per individual and tied it to inflation. (The 2012 exemption is $5.12 million, with the 2013 exemption set at $5.25 million.) For those estate that exceed the exemption amount, the new law raises the top estate tax rate from 35% to 40%. Without the ATRA, the estate tax exemption would have tumbled to $1 million, and the maximum tax rate would have climbed to 55%.

The ATRA also made permanent a provision of the 2010 law that allows widows or widowers to apply the unused portion of their deceased spouses' estate tax exemption to their own, meaning that the couple may be able transfer double the applicable exemption amount tax-free. This "portability" of the estate tax exemption is not automatic and requires proper planning to accomplish.

Although many may feel that a figure of $5 million or $10 million is too large a number to apply to them, consider that it can include savings, pensions, investments, art, jewelry, IRA accounts, 401(k) accounts, property and other items often passed down from one generation to another.

The federal statute averting the fiscal cliff also had a ripple effect on Wisconsin tax law, as well. Wisconsin has a state estate tax, but it is a "pick-up" tax, meaning that it is equivalent to the federal credit for state death taxes allowed under the federal estate tax. The fiscal cliff legislation made permanent the elimination of that federal credit, meaning that it essentially eliminated the Wisconsin estate tax permanently, unless the state legislature changes the protocol for calculating state estate taxes.

Here are a few other implications of the fiscal cliff budget deal:

• Income tax rates will remain lower for those individuals making under $400,000 and couples making under $450,000. For those earning over those amounts, the income tax rate will increase from 35% to 39.6%. Those dollar amount thresholds will be indexed for inflation beginning in 2014.


• Capital gains and dividends taxes will increase from 15% in 2012 to 20% for those individuals making over $400,000 or $450,000 for couples.


• The IRA charitable rollover was extended through 2013 by the fiscal cliff deal. This means that those individuals over the age of 70 1/2 can transfer up to $100,000 to charity of their choice, directly from their IRA assets.