1. Tenants in Common

Taking title to real estate as tenants in common is sometimes a deliberate choice or can be the default when no other method is specified. In a tenancy in common, two or more people can share ownership rights to real property with each owner having a right to use and possess the entire parcel, regardless of the fractional share each owner paid. So, for example, if A pays $40K and B pays $60K for the property, this does not mean that B gets to divide the property up consistent with his 60% share and exclude A from it. Rather, both A and B must share the entire property.
The 50/50 rule applies to most aspects of a tenancy in common. For example, owners are equally responsible for maintenance costs and taxes. Only one property tax bill will be issued for the parcel, thus it is the responsibility of the parties to divide costs up as they see fit. The most efficient way to do this is through a tenancy in common agreement. Further, each owner is said to own his or her interest “severally”, meaning that he or she is free to sell or dispose of his or her interest, and no consent of the other co-owner is necessary to do so. It is easy to see some of the pros and cons of a tenancy in common, compiled below:

Pros of a tenancy in common:

• Allows individuals to pool their resources so that they can afford property,

• Each party can own different sections of the property if specified by a tenancy in common agreement, and

• Property taxes and other expenses are split between all owners

Cons of a tenancy in common:

• There are no survivorship rights in a tenancy in common, which means that when one owner dies, his/her share does not pass to the other owner, but rather to the decedent’s estate,

• Each owner must share the entire parcel with the other owner, unless the parties agree otherwise, and

• Owners may end up with unanticipated co-owners as a result of each owner’s right to freely transfer or sell their interest or when one owner passes away.

2. Joint tenancy

A joint tenancy, like a tenancy in common, allows two or more people or entities to share a property equally. However, unlike a tenancy in common, joint tenants have survivorship rights, meaning that if one owner dies, his or her share passes to the remaining owner or owners.
Joint tenants, like tenants in common, must share the entire parcel with the other owners. There is still the option of drafting a joint tenancy agreement to fractionally divide each owner’s share. However, there are some unexpected nuances here. For example, if joint tenants agreed to fractionally divide the parcel and one joint tenant decides to lease his or her share, most would presume that the owner offering the lease gets to keep all proceeds from the lease. However, this is incorrect – the typical presumption is that the lease proceeds must be split 50/50 or equally with the other owners.

Pros of a joint tenancy:

• Survivorship rights when one owner dies; his or her interest passes to the remaining owner(s), thus affording the opportunity to become a sole owner,

• Each owner can own specified sections of the property if specified by a joint tenancy agreement, and

• Property taxes and other expenses are split between all owners

Cons of a joint tenancy:

• Each owner must share the parcel with the other owners, unless the parties agree otherwise, and

• Equal rights and responsibilities of all owners mean that if one owner takes a loan out against the property, all co-owners may responsible.

3. Marital property

Wisconsin, being a marital property state views all property as owned by the marriage, not each individual in it. Thus, each spouse automatically owns a ½ share of all property acquired in the marriage, unless a marital property agreement specifies otherwise. For Wisconsin transplants who have acquired property out-of-state before moving to Wisconsin, property is recognized as quasi-community property, which is complex and helps courts determine how to divide property upon divorce or death.
Marital property, like property taken in joint tenancy, has survivorship rights. In the marital context, this means that if one spouses dies, the surviving spouse receives the deceased spouse’s half of the property. A common example is a home held in title as marital property. If both spouses are on the deed to the home, then the entire home goes to the surviving spouse. Depending on each couple’s situation, this may be either a pro or a con. Some of these pros and cons are outlined below:

Pros of marital property:

• Survivorship rights: If one spouse dies, his or her share goes to the surviving spouse

Cons of marital property:

• Frustrated interests: If one spouse wants to sell, but the other does not, it can cause a gridlock on being able to sell the property. Both spouses need to agree to sell.

• Even if one spouse was the one to acquire the property at first, the other spouse may acquire a ½ share if the property is used as a primary residence or marital funds are used to pay or upkeep the property. This can be a con in the context of divorce or estate planning.

Summary:

Now that you understand the three ways co-owners can take title to property and the cons that may arise when co-owners interest become frustrated, you may be wondering what solutions are available when co-owners cannot come to an agreement.

One option is asking the court to petition the property, which will be discussed in our upcoming blog post. Stay tuned and read on!

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Wills

If you have a will that was drafted in a different state before moving to Wisconsin, it will still be valid so long as it satisfies Wisconsin’s requirements of a valid will. These requirements include having the will in writing and having at least two disinterested witnesses at the time of signing.

In Wisconsin, your will may be changed through a codicil, which allows an individual to make amendments or changes at any time during their life. Some reasons that you may need a codicil to your will after moving to Wisconsin include, but are not limited to, changes to property, location of assets, location of beneficiaries, etc. For example, you may need to change the executor of your will if they live out of state. This is not only for practical reasons, in that the executor may have to handle matters in the decedent’s state, but also because Wisconsin law requires nonresidents to appoint an in-state resident to accept service of process and further, non-residency itself may be enough to disqualify an executor. See Wis Stat § 856.23.

Trusts

A living trust, also known as a revocable trust, is transferrable between states. However, it is important to speak with an attorney to update your trust to include any new assets and discuss whether moving your trust’s situs, aka its home, is advisable. On the other hand, an irrevocable trust’s situs may or may not be transferrable depending on the language of the trust. You should speak with an experienced estate planning attorney to understand the implications of having your trust’s situs in or out of state.

Similar to wills, it is advisable to have your trust’s situs as your state of residency. This is because unlike wills, which are attached to a person, trusts are entities governed by their respective state’s laws. Having a trust in a state other than your state of residency may require that your successor trustee hire an attorney in the state of the trust’s situs. Speaking with an attorney regarding your trust’s situs can help you understand other implications such as state fiduciary and inheritance taxes.

Transfer on Death Deed

A transfer on death deed allows property to be transferred to your beneficiaries without going through probate. If you have an existing transfer on death deed, it may need to be tweaked to reflect Wisconsin’s marital property laws. Moving to Wisconsin may make you to reconsider who is the beneficiary of your transfer on death deed. If it is the case that the beneficiary no longer seems appropriate, then you should speak with an attorney to revoke the deed and/or draft a new one.

Powers of Attorney

Your estate planning will typically include two kinds of powers of attorney (POA) – a financial power of attorney and a heath care power of attorney. The authority of someone granted to serve as a power of attorney is acknowledged in all states. However, moving is a perfect time to re-examine your agent selection. Wisconsin has adopted the Uniform Power of Attorney Act (UPOAA), along with 25 other states, which streamlines the laws governing POA’s. So, if your POA was created in a state that has not adopted the UPOAA, your POA could be challenged, and you should consult an attorney to clarify agent and grantor responsibilities.

Contact us today for a consultation at 262-725-0175 or our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has three office locations: Lake Geneva, Delavan, and Salem.

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What is Foreclosure?

Let’s start by answering the question “what is foreclosure?” Foreclosure is the legal process by which a lender takes possession of a home after the borrower has failed to meet repayment obligations. In most cases, the lender attempts to recover their losses by selling the home at auction.

Why does foreclosure happen?

There are many reasons why borrowers fall behind on mortgage payments and face the possibility of foreclosure on their homes.

Unemployment – For millions of Americans, loss of a job can leave them suddenly in dire financial straits. Unemployment benefits only cover a portion of your wages and may not be enough to cover your monthly mortgage payments alongside your other living expenses.

Divorce – A major life change like a divorce can come with major financial ramifications. If neither spouse is willing or able to continue making mortgage payments independently, the couple may need to sell the home in order to avoid foreclosure. 

Death of a family member – Not only is the loss of a family member emotionally devastating, but it can also be financially draining. In addition to contending with funeral costs and medical bills, you may also find yourself suddenly unable to make mortgage payments without the income of a deceased spouse.

Illness or injury – An illness or injury can put you out of work and leave you with mounting medical bills, making it difficult to continue making on-time payments on your mortgage.

Other debts – If you find yourself overwhelmed by high-interest credit card debt you may fall behind on your home mortgage payments.

How Does Foreclosure Work in Wisconsin?

The foreclosure process varies by state. While many states allow a nonjudicial or “power of sale” foreclosure, Wisconsin is among 22 states that only allow judicial foreclosures wherein lenders must go through the court system in order to foreclose on a property. 

These are important stages to be able to identify and understand. The sooner you contact Wynn at Law, LLC in Lake Geneva, Wisconsin, the quicker Attorney Shannon Wynn can begin working with you to navigate the foreclosure process.

In Wisconsin, the entire process can take up to a year or more. In general, the foreclosure process has the following stages:

1.    Missed Payments

The foreclosure process begins when you start missing payments. While there is often a grace period of up to two weeks after your payment due date, during which time you can make payment without penalty. However, once your payment is considered late, your lender may send you a warning and/or report the late payment to the credit bureaus.

2.    Foreclosure Lawsuit

The timeline may vary, but loans are generally considered to be in default after three missed payments. When this happens, your lender can file a foreclosure lawsuit against you in court. You will have a limited amount of time to respond, or else the judge may grant the lender a default judgment. This is your opportunity to fight the foreclosure.

3.    Redemption

Next, you will enter the redemption period. This is your chance to come to an agreement with your lender and/or pay what you owe within a specified amount of time in order to stop the foreclosure process.

4.    Sheriff’s Sale

If you cannot pay the amount owed or have not reached an alternative arrangement with your lender, the home will be put up for sale at an auction-like sale called a Sheriff’s Sale.

5.    Confirmation of Sheriff’s Sale

For some sales, the bank may be the highest or only bid at the auction. In this case, it is considered “bank-owned” or “real estate owned” (REO) and will be listed by a real estate agent[SW3]  after the sale is confirmed[SW4] . There will be one final hearing in front of a judge, called a confirmation hearing, to make sure the Sheriff’s Sale was done right and that the highest bid was reasonable.

6.    Eviction

If you do not vacate the house before the specified date, you will be evicted from the property.

How to Prevent Foreclosure in Wisconsin

When faced with the prospect of losing your home, it’s easy to feel helpless and alone. But there are steps you can take, even in the midst of financial hardship, to prevent foreclosure. Now that COVID forbearance programs are ending, it is important to be aware of how you can prevent your home from being foreclosed upon.

Contact Your Lender ASAP

First, if you experience a financial setback (such as losing your job or suffering a serious illness) that may prevent you from making your mortgage payments, communicate with your lender as soon as possible. Don’t wait until you’ve missed multiple payments.  If you are experiencing hardship, your lender may be able to work with you to keep you in your home and avoid the (costly) foreclosure process. In fact, there are many alternative repayment options and loan modifications available, but if you wait too long to take action, you may forfeit your ability to take advantage of them. You may need to provide your lender with proof of hardship in order to qualify for modifications to your loan.

Be sure to keep records of all communications with your lender regarding your ability to make payments. In the event that you are served with a foreclosure lawsuit, it will be important that you can dispute any allegations you believe to be incorrect. And, of course, be sure to open and save all mail you receive from your lender.

Pre-Foreclosure Options

Once you communicate to your lender that you are having trouble making mortgage payments, you may discuss possible options for avoiding foreclosure. Some potential options include:

• Loan modification – if you contact your lender early, you may be able to arrange some modifications to your loan terms such as a reduced interest rate, or lengthened term to reduce your monthly payment.
• Forbearance – in a forbearance agreement, your lender may agree to allow you to make reduced payments, or pause them altogether, for a period of time. This may be a viable option if you can demonstrate that your financial hardship is temporary, and you should be able to resume payments in the future.
• Reinstatement – if you can make up for missed payments and pay the delinquent amount within a specified amount of time, you may halt the foreclosure process.

Remember that foreclosure is a legal process, and you have the right to seek legal representation to protect your interests. A Wisconsin foreclosure attorney can advise you on the best steps to take and even fight for you in court.

Wisconsin Foreclosure FAQs

How will foreclosure affect my credit score?

Foreclosure on your home will negatively impact your credit score and will appear on your credit report for seven years from the date of the first missed payment.

Do I have to move out of my home when it is in foreclosure?

Typically, you do not have to vacate your home until the confirmation of Sheriff’s Sale.

Can I file for bankruptcy to avoid foreclosure?

Filing for bankruptcy can delay foreclosure and help you stay in your home, but it is definitely not a cure-all solution. Before declaring bankruptcy, consult a foreclosure attorney who can explain all of your options and help you choose the best course of action.

Wynn at Law, LLC Helps Homeowners Avoid Foreclosure

If you are concerned about foreclosure or are having difficulty making your mortgage payments, get advice from a foreclosure attorney. The prospect of foreclosure is stressful and can be very complicated; you don’t need to navigate this process alone. From seeking alternative repayment options, responding to a foreclosure lawsuit, or fighting foreclosure in court, a Lake Geneva foreclosure lawyer from Wynn at Law, LLC can help you. Contact us to schedule a consultation today.

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In its simplest terms, debt consolidation is the act of taking out a new loan so that you can combine all your current loans into one, resulting in a single monthly payment. Debt consolidation ideally provides a lower interest rate and better repayment terms compared to the existing debt. There are several kinds of debt consolidation options that you might want to consider, and the choice of what route to take depends on your situation and long-term financial goals.  

Get A Free Wisconsin Bankruptcy Attorney Consultation

If you are unsure of what step to take or where to begin, a free consultation with a bankruptcy attorney is a good starting point. A Wisconsin bankruptcy attorney will analyze your financial situation and recommend the best action for your situation. There is no one-size-fits-all solution for managing debt. Consulting with a Wynn at Law, LLC attorney can provide a customized roadmap to a better financial future and help you reach your debt-free goals.

Types Of Wisconsin Debt Consolidation Loans – How Does Debt Consolidation Work?

Debt consolidation is a tool that enables you to combine all your debt and can include (but is not limited to) credit cards, medical bills, student loans, personal loans, and car loans. Debt consolidation can save you money and simplify your budget over time.  

Do Consolidation Loans Hurt Your Credit? 

Anytime you take out a new loan, a credit inquiry is required, translating to a “hit” or inquiry on your FICO score. This credit inquiry means that your score will temporarily decrease by a few points. However, the benefits of no longer missing payments and paying off your consolidated debt will likely outweigh the credit score dip. When looking at the bigger picture, this is a small price to pay so that you can get a better handle on your finances.  

What Are The Risks Of A Wisconsin Debt Consolidation Loan? 

A debt consolidation loan can be a great option if you want to simplify your finances, but this option can be more harmful than beneficial if you can’t keep up with the payments. You must be financially disciplined when you take out a debt consolidation loan.  

The monthly minimum payment for a debt consolidation loan is typically higher than a credit card’s minimum monthly payment. With this in mind, make sure that you can afford this payment for the life of the loan; any missed payments will negatively affect your credit score. 

Borrowing From Your Home’s Equity

If you are a homeowner, a popular tool that you can use for debt consolidation is to take out a Home Equity Line of Credit (HELOC). Also known as a ‘second mortgage,’ HELOCs let you borrow against your home’s equity. However, there are usually fees that you must pay, such as an appraisal fee or an application fee. Due to the costs associated with this option, a HELOC is one of the costlier solutions for debt consolidation.  

Since the line of credit is secured against your property, the annual interest rate is usually lower than an unsecured loan. However, there is a significant disadvantage to using a HELOC to consolidate debt. If you cannot make payments on it, the bank can foreclose on your home. Be sure to consult a Wisconsin bankruptcy attorney or debt consolidation specialist before deciding if this option is right for you. 

Borrowing From Retirement Accounts 

Borrowing against your retirement account is another option for consolidating debt. For example, if you have a 401k, you likely have an opportunity to borrow against the balance of this account. Since the loan is secured against your retirement investment account, this route also provides a low-interest rate and extended repayment period.  

The limit for borrowing against your 401k is typically 50% of the balance or a maximum of $50,000. The payment to this loan can automatically deduct from your future earnings. But be aware, if you don’t pay off your loan in full, you might be subject to early withdrawal penalties and expensive tax consequences. 

Balance Transfer Credit Card 

Another popular option for debt consolidation is applying for a balance transfer credit card. This credit card type generally has a lower interest rate or a promotional balance transfer interest rate, usually a 0% annual percentage rate (APR) for a specified number of months. 

Even if you are saving money initially, it is vital to note the interest rate that you will pay after that promotional period ends, especially if you know that you won’t pay off the credit card within the 0% promotional period. You should also check the credit card’s fees, like balance transfer fees and annual card fees.

Attorney Shannon Wynn is available for a FREE debt consolidation consultation to review opportunities for managing your debt.

The Pros & Cons Of Wisconsin Debt Consolidation – Is It The Right Choice For Me? 

The goal of debt consolidation is to save money and reduce the stress of debt repayment. Let’s look at a scenario; if you have a lot of credit card debt with varying high-interest rates and you decide to consolidate all your debt into a lower percent interest credit card, you will instantly save money.  

Another benefit of debt consolidation is simplicity. Instead of juggling multiple payments, you can make a single payment every month that covers all your debt. You can even set up automatic payments toward the loan from your bank account for peace of mind to avoid missing a payment. 

While your score may dip initially, taking out a debt consolidation loan will help improve your credit score over time. One factor that makes up your credit score is credit utilization, which evaluates the balances you owe versus your credit limit. The lower the credit utilization is, the better your credit score will be. Since the debt consolidation loan will help you pay off your debt, this will lower your credit utilization, resulting in an improved credit score. 

Requirements For Debt Consolidation – How To Qualify For A Debt Consolidation Loan? 

Every financial institution or lender has its own set of guidelines for qualifying a borrower for a debt consolidation loan. The common factors for eligibility are your credit score and debt to income (DTI) ratio. 

The higher your credit score, the better your chance of getting approved and obtaining a low interest rate. If you have a low credit score, you might want to consider getting another person to co-sign on the loan with you. A credit score in the mid-600’s will typically be enough to qualify you for most debt consolidation loans with a steady income and reasonable DTI ratio. 

The DTI ratio is a representation of the percentage of your gross income compared to your debt. Lenders use DTI ratios to determine if a borrower will make enough money to pay for their debt while also covering essential expenses. Financial institutions tend to favor customers who have a lower DTI because this means that the person will be more likely to cover the monthly payments.  

Debt Consolidation Alternatives

Before pursuing debt consolidation, it is recommended that you explore at least one of the alternatives below. 

Create A Budget 

Creating a budget might sound basic, but it is the easiest way to figure out if you can afford to live within your means. Start by writing down how much income you make per month and how much you have to pay in loans/bills each month.  

Then, you can figure out your disposable income, which is income that you’re free to spend on whatever you’d like. You can use part of your disposable income to pay down some of your loans. The most important thing is learning to stick to your budget and making your goals realistic.  

Contacting Your Creditors 

You can contact your creditors on your own to try to negotiate a lower monthly payment or interest rate reduction. Banks and financial institutions have hardship departments that can work with you to structure a payment plan or amend the terms of your loan to make it possible for you to continue to make payments. 

Schedule A Consultation With Wynn at Law, LLC

Schedule a free consultation with a Wisconsin Bankruptcy Attorney so that you can have a better understanding of your debt management options. Take advantage of our expertise to have a better chance of improving your financial status. Contact Wynn at Law, LLC to schedule a free debt consultation at one of our three law offices in Southeast Wisconsin. Give us a call at 262-725-0175.

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In one of our earlier articles, we talked about the Last Will and Testament — a crucial part of estate planning after someone passes. A Living Will is a legal document that sets out a person’s healthcare wishes in the event they cannot articulate the wishes. A Healthcare Power of Attorney (POA) is a separate alternative. The Living Will has your instructions — what you will and will not permit. The POA designates an ‘agent’ to make the decisions. Usually, the agent is a spouse, but can be a close friend. No matter who you choose, you have to let that agent know your wishes clearly.

The POA is even more powerful when it goes beyond healthcare decisions to include financial decisions as well. This Durable POA ensures the person making the healthcare calls has the money to pay for the procedures. The signer gets to choose how limited in scope the POA is: For example, it can be limited to using bank accounts only and not things like selling the house.

Where Wynn at Law, LLC adds value with such a POA is that the document and our Firm can be – if needed – the go-between if things get charged up among family members or family and caregivers. Things like resuscitation, painkillers, tube feeding, and organ donation can be powderkeg issues when they’re not backed up by a Living Will or a POA.

‘Why would you create a Durable POA over creating a Living Will?’ is a common question. The answer is simple: The POA agent can represent your thoughts on things for which you didn’t foresee in drafting a Living Will. You can’t plan for everything in writing in a Living Will, and the bills don’t stop just because a person is hospitalized. When you and your family come upon this intersection in life, these estate planning tools help keep the focus on the care you would have chosen and nobody has to guess.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

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