“Intestate” is the term used to describe the estate of someone who dies without a will or a trust. Each state has laws called “intestacy laws” that govern how probate assets are distributed, if someone dies without having a will, at minimum. These laws establish the inheritance hierarchy based on a person’s family structure. As explained in The Daily News’ article “’Are You My Heir?’-Who Inherits When You Die Without a Will,” all of your assets will pass to your next of kin, also known as your “heirs-at-law” or heirs in accordance to the state’s laws of intestacy. Continue reading
Do not buy into the myth that estate planning is only relevant for wealthy individuals who need tax planning. A comprehensive estate plan is an easy way to make sure your wishes are followed should you become incapacitated, and upon your death.
One of an estate planning attorney’s main responsibilities is ensuring that clients understand the importance of addressing these matters before they become an issue, reports the New Jersey Herald in the article “The importance of putting plans in writing.”
Ensuring that your property is appropriately managed and disbursed upon your incapacity or death, is no longer limited to physical or financial property. Your estate plan now needs to include digital assets, the online accounts that are in your name, says the Journal of Financial Planning in the article “Don’t Forget Digital Assets in Estate Planning.”
If your will or trust hasn’t been updated in the past few years, chances are good it has no provision for your digital assets. This could create a larger problem than you’d think. Bank accounts, investment accounts and small business records stored in the cloud may not be accessible to heirs. That doesn’t even include sentimental items: treasured photos and videos that never made it to paper or your computer’s hard drive. Continue reading
Many estate plans fall into the “I love you” estate plan. This isn’t always how it goes, but it’s the rule rather than the exception, according to nwi.com’s article “Estate Planning: Excluding a loved one from the plan.”
The exceptions are mainly because the family dynamic requires it. For instance, the person is not married or doesn’t have children. However, sometimes even a regular old-fashioned “Mom and Dad and Brother and Sister” family has a reason why one or more of the kids are left out of the will. Continue reading
Do you remember that episode of the U.S. version of “The Office” where Michael Scott thinks he can seek bankruptcy protection from his creditors simply by walking into the office and stating, “I declare bankruptcy!” Obviously, that is not how bankruptcy works. Yet, when it comes to estate planning, some people operate under a similar misunderstanding of the law; they think they can shield their assets from their creditors by placing it in a trust.
How the Law Treats Revocable Living Trusts
Now, there are ways to use trusts as a legal means of asset protection, but when it comes to a revocable living trust–the most common form of trust used in estate planning–that is not the case. A revocable living trust is a means of avoiding probate, not a way to avoid paying back your creditors. Continue reading
“In the coming decades, baby boomers in the U.S. are expected to transfer an estimated $30 trillion in assets to subsequent generations. For many families in Minnesota, that will include the family cabin.”
One of the key markers of summer in many areas is crowded roads, as folks head out of the city to their summer retreats, like the Outer Banks of the Carolinas or the Berkshire Mountains. They know it’s summer in Minnesota, when the roads are filled with families headed to lake cabins. The tradition may not last another generation, according to MinnPost’s in “The uncertain future of cabins in Minnesota.” Continue reading
In an early episode of the long-running family sitcom “The Simpsons,” Homer and Marge are looking to buy their first home. They come across a house they like, except for the fact it is filled with cats. When Homer suggests removing the animals, a cheerful real estate agent explains, “Actually, according to the Will, the cats own the house. You’d be their tenants.” Continue reading
Although trusts are not difficult to create, they do require a certain degree of administration. If you are presently serving as a trustee, particularly of an irrevocable trust, you must take care to faithfully execute the trust instrument’s instructions. If you do need assistance with trust administration, you should not hesitate to contact a qualified Madison probate and trust administration attorney for assistance.
Wisconsin Court Orders Ex-Trustee to Pay Sister $100,000
Recently, a Wisconsin appeals court affirmed an order removing the trustee of an irrevocable trust precisely because he failed to follow the trust’s instructions. The trust was first established over 20 years ago. The person who made the trust, known in legal terms as the settlor, operated a bed and breakfast in Lake Geneva, Wisconsin. The trust owned a 30% interest in the limited partnership that actually owned the property. Continue reading
When you are creating a will or revocable trust as part of your estate plan, you need to think carefully before selecting someone to act as a personal representative or trustee. Many people just go with their nearest relative, such as a spouse or eldest child, but a fiduciary’s role is not ceremonial. An executor or trustee must be financially responsible and demonstrate the willingness to comply with legal deadlines and court orders. Failure to do so can lead to a substantial delay in administering your estate or trust.
One reason many Wisconsin residents create a trust is to reduce their estate’s potential estate tax liability. For example, with a qualified terminable interest property (QTIP) trust, married couples can maximize the potential estate tax deduction for their combined property. Basically, the way a QTIP trust works is that the first spouse to die leaves a “life estate” in his or her property to the surviving spouse. This means the surviving spouse may continue to use and receive income from the deceased spouse’s property. The property itself remains in trust until the second spouse’s death, at which time the trust assets are distributed to a final beneficiary, such as the couple’s children.
Wisconsin Court Holds Father’s Will Did Not Create QTIP
Creating a QTIP trust is not necessarily difficult, but it is something that must be done carefully to ensure there is no confusion as to your intentions. If you did not clearly intend to create a trust, do not expect a judge to make one for you after you die just to help your estate save money on its estate tax bill. The law is not that generous.
Here is a recent case in point. Four adult children attempted to sue the law firm that handled their father’s estate more than 30 years ago for malpractice. The children maintained that their father had intended to create a QTIP trust and the attorneys failed to do so after his death, eventually leaving the children with an estate tax bill of over $260,000. Continue reading