Articles Posted in Estate Planning

Wisconsin is one of nine states with community property laws that can have a major impact on how couples conduct their estate planning and pass on property to their heirs. The law holds that any property acquired during the course of a marriage is equally owned between spouses and in the event of a divorce, must be split 50/50. Wisconsin is one of a handful of states that take the law further to apply to probate laws.

Married couples in Wisconsin are allowed to have property as survivorship marital property, also known as community property with right of survivorship, which passes on the deceased spouse’s half of the property upon death. What this means is that when one spouse passes away, the house, cars, furniture, and other real estate automatically become the sole property of the surviving spouse.

Wisconsin Statute 766.60(5)(a) reads: “On the death of a spouse, the ownership rights of that spouse in the property vest solely in the surviving spouse by nontestamentary disposition at death.” This law was promulgated in 1986 as part of Wisconsin’s adoption of the Uniform Marital Property Act (UMPA) which sought to create more consistent spousal property laws across the country.

funeralPlanning for your burial is another important part of one’s estate that can often be overlooked when it comes time to planning other aspects like creating a last will and testament, assigning an executor, or creating various types of trusts to avoid tax implications of dividing an estate. However, if you have a family or need to observe certain religious burial practices, it is vitally important that you create an Authorization for Final Disposition to ensure that your final wishes are carried out at your burial.

 

An Authorization for Final Disposition allows individuals to make advance arrangements for their funeral viewing, suggest which religious observances should be followed, and suggest a source of funds to pay for the burial. The Authorization for Final Disposition also gives instructions on what type of funeral ceremony, memorial service, graveside service, or other last rite the individual may desire and inform family members whether a burial, cremation, or other disposition or donation of the remains is desired.

 

Without a signed Authorization for Disposition letter, Wisconsin law provides a hierarchy of surviving heirs who have the authority to make decisions on final burial arrangements. Wisconsin’s order of priority for burial procedures is as follows:

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HOME-300x199When it comes time to plan your estate, there are many way to pass on real estate to avoid paying costly expenses. One transfer method with tax advantages that may work for some folks is known as the estate deed. Essentially, an estate deed allows you to transfer your home to beneficiaries but still live there and avoid estate taxes and the probate process.

When you create a life estate, you will own the property along with whomever you designate as a beneficiary. The person living in the home is known as the “life tenant” and has exclusive rights to the property during his or her lifetime. The life tenant can be one person or individuals with joint tenancy, like a husband and wife. It is important to note that the life tenant has the responsibility to maintain the property, pay taxes, and retain insurance on the dwelling. Continue reading

A Wisconsin man who claims that notorious California cult leader Charles Manson, who orchestrated the gruesome Manson Family murders in the 1960s, was his biological grandfather recently filed paperwork challenging a will Manson allegedly wrote giving his estate to a long-time penpal. The legal moves could set up months of courtroom sparring between the two sides and potentially other biological heirs who Manson allegedly disinherited from his estate in the will produced by the California penpal.

A Los Angeles Superior Court judge will first have to rule on the appropriate venue to hear the challenges over the estate, including who would be entitled to Manson’s property, money, image, and song catalogue. Manson died at a hospital in Kern County in November but was incarcerated in Corcoran State Prison in neighboring Kings County. His supposed heir believes Los Angeles to be the proper venue to hear the probate proceedings as Manson lived there before he was imprisoned for orchestrating the 1969 killings of pregnant actress Sharon Tate and eight other people.

In the will produced by the man who befriended Manson, the deceased specifically disinherited two known sons and any other unknown children but left the penpal all the rights to the estate and his body. It is believed Manson specifically asked the willholder to find burial arrangements alternative to that of the cremation process California state prisons take if an inmate dies without a party to accept responsibility for the deceased’s burial.

Reviewing your estate plan and updating the beneficiaries on your retirement accounts is important anytime you have a major life change. A last will and testament does not generally cover who will receive the benefits from your retirement accounts when you pass away, which makes review and revision all the more important when necessary.

Some of the most important times to update your retirement accounts include after a divorce, remarriage, and having children. Other examples of when you will need to revise the beneficiaries on your retirement account could be if you have designated a charity to receive your benefits and it is no longer solvent. In either case, it can be especially difficult for heirs to challenge the designation in court and recover what should be theirs.

Should you fail to designate a beneficiary altogether or that individual passes away before you do, your beneficiary may be determined by state law or the provision that governs your account. Federal regulations govern profit-sharing plans, 401(k)s, and money purchase pension plans and will automatically go to your spouse if you are married. Unless your spouse signs and notarize a document stating otherwise, no one else may be designated as a beneficiary for these types of accounts.

Acting as the personal representative to an estate comes with a lot of responsibility, none the least of which is ensuring that all the proper paperwork is filled out and submitted to the proper authorities. While Wisconsin has essentially done away with the estate tax, executors still need to turn in tax returns on behalf of the deceased and ensure any outstanding taxes from the estate’s income are paid.

According to the State of Wisconsin Department of Revenue, more than one-tax form is required for deceased taxpayers. Those forms include:

  • Individual Income Tax Return

While planning for a catastrophic accident is something we may never want to think about, creating a power of attorney for someone to act in our best interest in the event that we become incapacitated is an important aspect of estate planning. Even in cases in which we make a full recovery, we still may need someone to take care of our finances or act on our behalf for a period of time while we recover.

In Wisconsin, these legal arrangements are called “durable powers of attorney” and allow someone to name another individual as the “attorney in fact” to make important healthcare decisions when someone faces an end of life scenario. Some of the scenarios where someone may have to exercise their durable power of attorney over another could be cases where someone is on a respirator or has severe brain damage and  unlikely to make a recovery.

Wisconsin law 155.01 et seq. Allows individuals to create a durable power of attorney for:

Creating a will and planning your estate is an incredibly important process that all adults need to think long and hard about, especially if they have children. Without a last will and testament, vital decisions about your estate will be left up to the courts or someone who might not be the best choice to oversee the process.

If you are married and believe you might not need a will because your spouse will naturally inherit the home and raise the children, you may not be taking into account some of the worst case scenarios. Should the unthinkable happen and both you and your spouse pass away with minor children, the decision over who will raise the children will be up to the courts if neither of you took the time to craft a will.

In that scenario, a court will need to choose a guardian to raise the children and oversee any assets that pass down. Letting a judge decide who will take care of your children can end up being an extremely emotional situation for some families, particularly if surviving family members disagree over who is best suited to take on the responsibility. If for no other reason than the sake of minor children, couples need to create a will spelling out who exactly will become their children’s guardian.

Planning for your family farm’s future is a unique combination of estate and business planning, requiring attention to detail and understanding of family dynamics. Furthermore, because some farms can be capital intensive and have many assets, family farmers need to take into account how taxes and the probate process might have an impact on the state of the farm after it passes to the next generation.

While every family farm is unique, there are some common considerations that Wisconsin farmers usually take into account when creating their estate plans. Because these decisions can have a significant impact on the quality of life during retirement and the farm’s existence, families need to be proactive and open with each other about the farm’s future.

First and foremost, family farmers need a succession plan on whether or not a child will continue to run the family business. These days, as more and more rural young people move to the suburbs and the cities, most parents cannot count on the children to stay on the farm and run day-to-day operations.

The time it can take for an estate to pass through probate court in Wisconsin depends on many factors including the size of the estate, debts to be paid, and whether or not any interested parties contest the language of the deceased’s last will and testament. While there are any number of issues that may come up during probate, planning ahead and taking a few simple steps can help expedite the process as quickly as possible and ensure your heirs and beneficiaries receive their share of the estate.

Wisconsin probate laws require estates be closed within 18 months but some counties have even adopted ordinances aimed at reducing the amount of time to 12 months. If, for whatever reason, the executor cannot pass the estate through probate in time, he or she may ask the court for an extension for more time to perform the necessary duties to account for assets, liquidated holdings, and pay creditors if necessary.

For small estates with few assets and creditors, the process may take as little as six months if the executor in charge of the estate does his or her due diligence in cataloging assets and informing creditors about the deceased’s passing. Furthermore, the personal representative of the estate must file income tax returns for the deceased as well as income tax returns for any income earned by the estate after the decedent’s death.