Articles Posted in Trusts

Are You Making Some of the Biggest Estate-Planning Mistakes?

There are some things we just don’t like to think about, much less speak about. The universal truth is we are all going to pass away one day. The legacy you leave can either simplify the process of dealing with your personal and financial property, or it can be a worrisome burden for those you leave behind.

Legacy planning is as important as your final wishes. So, as much as you avoid the topic, it can’t be — and shouldn’t be — ignored.

People often ask us to explain the difference between a revocable and an irrevocable trust. That’s a tough one because there are so many kinds of trusts and even irrevocable trusts can, within the Trust-300x225terms of the trust, allow certain things to be revoked or amended. But here’s our answer.

Most people who consider forming a trust like the concept of a “revocable” trust. The word “revocable” implies that you can amend, undo, change, alter, or revoke the trust. When someone hears that a trust is “irrevocable,” they often get concerned because that implies that things are rigid, fixed, inflexible, and control is lost.

The typical “avoid probate” trust is a revocable trust. There is no requirement that the typical “avoid probate” trust be irrevocable. Your home and other assets must simply be titled in the name of your trust when you die.

6d40ea6ed7ae7784abf574b8c6174543_300x300-300x200I met today with the children of a woman who is presently residing in a Madison nursing home due to her dementia diagnosis. The children had no idea how long term care and Medicaid financing for long term worked.

They told me that Mom owned a home, three annuities, some cash in the bank, and expensive jewelry and antiques. Their financial advisor referred them to my office. I asked them what they knew about long term care and Medicaid. They said they were starting to “hear things” but they wanted to get the truth.

I told them that if all of the assets stayed in their mother’s name, then their mother would be forced to spend her $475,000 of financial assets until she had less than $2,000 remaining. They told me that their mother was spending about $8,000 per month currently on her care. I also told them that – if Mom keeps everything in her name – then after Mom spends all of her finances, she will qualify for Medicaid, but then Medicaid will have the right to enforce its Medicaid Estate Recovery rights after Mom dies, forcing the house to sold after Mom dies to reimburse Medicaid for what they spent on Mom’s care after Mom spent all of her own money.

Not all of a deceased person’s property has to go through probate. If the property had a properly designated beneficiary, such as an insurance policy, an IRA or a 401(k), those do not go through probate.
Additionally, because of Wisconsin’s marital property law, everything owned jointly by a married couple easily transfers over to the surviving spouse. However, if real estate is only in the deceased spouse’s name there may need to be a probate. Continue reading

Top 5 Universal Estate Planning Mistakes to Avoid

As the saying goes, “Death and taxes are something you simply can’t ignore.” Both are inevitable and although most people understand this phenomenon and in turn, prepare by paying their taxes on a quarterly or yearly basis and others set up their estates to ensure that their affairs are in order and their families are protected when they make their transition. For many, however, death is simply too scary, safeDepositBoxpainful and heart wrenching and many people choose to not even think about it. Most realize that they will eventually pass on and have a general mental vision of what they want to happen to their estate but, for one reason or another, they fail to write it down or even when they do, they don’t keep it regularly updated. In fact, studies as recent as the last quarter of 2015 show that only 34% of Americans have a drafted will, while 69% have considered it but delayed doing anything concrete. Continue reading

Traveling? The Eight Estate Planning Must-Dos before Departure

airplaneIn 2014, the World Health Organization revealed that globally, there were 1.24 million road deaths, 1,320 deaths from airplane crashes, 78 deaths from train crashes, and over 4,000 deaths from motorcycle accidents. Statistically, though, motorcycle travel is the most dangerous, while train and air travel are safer.

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If you are a farmer or a rancher, you are hardworking and dedicated. Your farm or your ranch is more than just a way to make a living — it is your legacy. You have spent your life building something that you can be proud of and that you want to pass down to your children so that they can preserve what you have built and they can continue to provide for themselves and their families. Unfortunately, if you do not make an estate plan, your land and your assets may be liquidated cutting your legacy short and ending your family’s unique lifestyle choice.
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Estate planning is important for everyone but especially for those who own their own business such as farmers and ranchers. If you avoid making or updating an estate plan, your assets will be subject to state intestate laws. Instead of you deciding how your estate will be settled upon your death, the courts will make that decision for you. Below are three common estate planning mistakes farmers and ranchers make and how to avoid them.
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A coherent strategy for the transfer of assets is, of course, crucial to the success of any estate plan. But the best-laid plans will fall far short of expectations if the trusts so carefully drafted are never properly funded.

TrustIf the trust is the car, the funding is the fuel. Without gas in the tank, that beautiful sedan with the precision engine is just metal on four wheels. It’s not going anywhere. The same holds true for an estate plan . Until it’s properly funded, the “plan” is just a plan – a plan that can’t be executed. Like the car with the needle on empty, it’s not going to take you anywhere.

With basic wills, most of the funding happens after death through the probate process. By contrast, a trust can – and should – be funded while the trust maker is still alive. With proper trust funding we can assure that the client’s designated assets will be governed by the terms of the trust agreement. Without it, assets not properly transferred to the trust will generally fall to probate.

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estate planEstate planning is an important topic for everyone. Accidents and serious medical conditions can arise suddenly and it is important to be prepared. The need for effective end-of-life planning impacts everyone, even the rich and famous. Celebrities help highlight the need to prepare your Wisconsin estate planning documents.  Take for example Stieg Larsson, author of the highly successful Girl With the Dragon Tattoo trilogy. Hollywood’s recent movie adaptation of the novel grossed more than $140 million. Unfortunately, Larsson died suddenly at age 50 from an unexpected heart attack. The author never prepared a living trust or will. Consequently, a lengthy legal battle over his $40 million estate ensued between his girlfriend of 32 years, with whom he shared a residence, and his family. Larsson’s estate was eventually awarded to his relatives.

Years later, Larsson’s family is still engaged in a court battle with his girlfriend over an unpublished novel that is allegedly in her possession. Larsson could have avoided the legal battle between his loved ones simply by preparing a living trust or will that clearly expressed how he wanted to divide his assets. By creating your Wisconsin living trust or will, you decide who receives your property and other assets upon your death. If you fail to provide for your loved ones in a trust or will, Wisconsin courts will distribute your estate according to Wisconsin intestacy laws, which may exclude certain people you would have wanted to include.

It is also crucial to create a health care power of attorney and a financial power of attorney well before any medical issues arise. If you are unexpectedly incapacitated, a health care power of attorney allows the individual you select to make any necessary medical decisions for you without heading to court. Making end-of-life medical and financial decisions can be tough on family members and often results in fighting. For example, although the late Etta James prepared a financial power of attorney that designated one of her sons as her decision-maker in 2008, her husband of 42 years challenged the document and claimed it was created after she became incompetent from dementia. Eventually, her husband and her sons reached an agreement regarding James’ care, but this does not always occur. You can protect yourself and your loved ones from legal battles by appointing medical and financial decision-makers well ahead of unexpected medical situations.

1221950_to_sign_a_contract_1 sxchu notify.jpgEstate planning is an essential tool to ensure your money and other assets are transferred pursuant to your wishes upon your death. If you are bequeathing money to a loved one in your will, it is important to keep in mind that large sums of money can be quickly and easily squandered. Financial advisers who work with individuals who suddenly receive a windfall say the money often vanishes quickly. Proper estate planning and the use of wealth transfer tools can ensure the financial well being of your family is protected. Continue reading