There is a common misconception that you can simply tell a trusted friend or family member that they are the person you would like to take care of your children in the event of your death. Unfortunately, a conversation like this is not enough to ensure that your wishes will be fulfilled. Rather, you should have your decision explicitly written in a legal document. Two options are a Will or a Revocable Trust.

Using a Will to Appoint a Guardian for Your Child in the Event of Your Death:

A. Biological versus Stepparents

Appointing a guardian to take care of your minor child in the event of your death is a smart way of ensuring that your wishes are clearly communicated. However, it must be noted that Wisconsin law presumes that biological parents are the natural guardians of their children. Thus, if you are in a subsequent marriage and would instead prefer that your spouse (your child’s stepparent) be selected as a guardian in the event of your death, you should state your reasons as to why you believe your child’s biological parent should not be guardian in addition to appointing your desired guardian. Some examples of reasons for non-appointment include substance abuse, lack of contact with the child, abuse, unsafe conditions, stability, etc.

When a Will with such guardian designations is admitted to probate, there is no certainty that the court will respect your wishes and name a stepparent rather than a biological parent as guardian. However, clearly spelling out your reasons will increase the chance of the court appointing your desired guardian.

B. Children 14 and older

Another thing to consider is the age of your child. Wisconsin statute §54.15 allows children who are 14 years or older to choose their own guardian and the court will approve the appointment so long as it is in the child’s best interest. Children 14 and older can also object to a guardian that is proposed by the court or in a Will, even if that guardian is a biological parent. The child’s objection is another factor the court must consider when naming a guardian.

C. The Personal Representative’s Job over Minors:

Every Will should name a person who may act as Personal Representative (also known as Executor) of the estate. The Personal Representative’s job is essentially to collect all assets, pay all debts and taxes, and then distribute the remainder to the beneficiaries of the Will. If one of the beneficiaries of a Will is a minor, then the Personal Representative will distribute the minor’s assets to the minor’s guardian, rather than directly to the minor.

Using a Trust to Appoint a Guardian for Your Child in the Event of Your Death:

A. Age limits in a Will versus a Trust

Trusts are often drafted in conjunction with a Pour-Over Will, which is used to transfer to the Trust any forgotten property that was not originally put in Trust. Thus, a parent can appoint a guardian in a Pour-Over Will just as he or she can do in a simple Will. However, in a simple Will, the child’s guardian will cease to act once the child reaches adulthood, resulting in the child officially taking possession of the assets left to him/her in a Will at age 18. Some parents cannot imagine their 18-year-old child responsibly using such assets.

As an alternative to a simple Will, parents can choose to draft a Trust with a provision requiring the child to reach a certain age of majority before taking possession of the assets. With a Trust, the Trustee will manage the property that your child is intended to inherit until your child reaches the age of majority. The age of majority is entirely up to the parent drafting the Trust; however, many Trusts set the age of majority at 25, 30 or 35 years old.

B. Trustee management of a child’s property

A person called a Trustee, which is selected by the Parent and named in the Trust, is in charge of managing your child’s inheritance until he/she reachs the age of majority and is required to distribute the inheritance as specified in the Trust. Typically, Trusts allow the Trustee to distribute a part of the inheritance to your child for their health, education, maintenance, and support. What constitutes health, education, maintenance, and support is typically up to the Trustee’s discretion. However, the parent or Grantor of the Trust may get more specific and narrow the distribution to the child, for instance, educational distributions can be limited to a specific field or specialty or study.

Conclusion

Choosing whether to provide for your minor child in the event of your death via a Will or with a Trust is a serious decision and often requires a complete overview of your assets and goals. Meeting with an estate planning attorney to determine which option is best for you is the first step in making sure your minor children are cared for in the future. Contact Wynn at Law, LLC today to set up an appointment with an estate planning attorney who can assist you in choosing which document to draft and make sure your wishes are carried out.

Schedule a Consultation with Wynn at Law, LLC to Assist with the Will or Trust Drafting Process

Contact Wynn at Law, LLC today for a consultation at 262-725-0175 or visit our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has offices conveniently located in Salem, Delavan, and Lake Geneva, Wisconsin.

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Intestate Succession:

When someone who lived in the state of Wisconsin dies without an estate plan, they are said to have died “intestate” and are thus entitled to the state’s laws of intestate succession. In other words, the state decides what to do with the decedent’s property. This is why consulting an estate planning attorney is important if you would like to have a say in where your assets go after you pass.

Intestate succession is often referred to as “probate” which also refers to the distribution of the decedent’s estate. However, intestate succession refers more specifically to the pattern of distribution of the decedent’s estate to their heirs and who qualifies as an heir.

There is a common misconception that the property of those who die without a Will goes entirely to the state. This is only true in rare circumstances; Wisconsin uses this as a last resort when the state cannot identify any of the decedent’s heirs or family members. Part of the reason why this is so rare is because the state can usually identify at least one heir – even if that person is a distant cousin the decedent never met. The next paragraph outlines how Wisconsin identifies which heirs inherit.

Who receives my property and in what order do they receive it, if I die without a Will?

The pattern of intestate succession in Wisconsin starts with spouses – if you die without a Will, but you are married, then your surviving spouse receives everything. This is true even if you die with both a surviving spouse and surviving minor children, as the state presumes that your surviving spouse will use the inherited assets for the benefit of the children. This could result in an unfortunate situation in which your surviving spouse does not share the estate with your surviving children, leaving your children with no inheritance and no legal remedy.

If you pass with no surviving spouse nor surviving children, then the State of Wisconsin looks up your family tree to find your next heirs, which are your parents and/or your siblings. However, if you pass with no surviving parents nor siblings, then your estate will be distributed to your surviving grandparents. The probate process will continue along your family tree until a relative, no matter how distinct is found. Finally, if the state cannot identify any of your family members, then your entire estate will “escheat” or “go to” to the State of Wisconsin and will be added to the Wisconsin’s school fund.

Throughout this entire pattern, there are quite a few nuances. For one, the “issue” (legal term for children) of your heirs can inherit a deceased heir’s share by “right of representation.” For example, if you pass with no surviving spouse, children, or parents, but you have a surviving brother and a deceased sister who has a surviving child (this would be your niece or nephew), then your niece/nephew can inherit your sister’s share by right of representation. In this scenario, your niece/nephew  would receive half your estate and your surviving brother would receive the other half of your estate.

Other nuances to consider include: children from a previous marriage, children who have been adopted by an heir, and many other family relationship questions. The unpredictability of the intestate succession process can result in the deceased’s assets going to a family member that the decedent has not spoken to in years or may have never even met.

What is included in the probate estate:

Another nuance to intestate succession regards what property is even included in the probate estate. Probate property is all property the decedent owned solely or as a tenant in common at the time of passing. Property owned jointly is not included in the probate estate because it transfers to the surviving joint owner. Non-probate property includes any of the decedent’s assets that have a payable on death or transfer on death designation, such as life insurance, retirement accounts or bank accounts.

How does the intestate succession process start?

For the intestate succession process to begin, someone must open a probate case. To do so, it must first be decided whether an informal or a formal probate will be opened. This is a legal decision that should be made with the assistance of an attorney as the decision can depend on numerous factors. Examples of factors to consider include the size of the estate, the number of claims or creditors against the estate, the ease of contacting interested parties, and the ease of determining who the heirs are.

Schedule a Consultation with Wynn at Law, LLC to Assist with the Probate Process

Contact Wynn at Law, LLC today for a consultation at 262-725-0175 or visit our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has offices conveniently located in Salem, Delavan, and Lake Geneva, Wisconsin.

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First, a word about probate. Probate is a court process that oversees the administration and distribution of the assets of a deceased person. As part of the process, the court system validates a person’s Last Will and Testament, if they have one. While the probate process is not “scary,” it can eat up a lot of time and money. That is all the more reason to turn to an experienced Estate Planning attorney for help in how to avoid that unnecessary cost and delay.

A Trust skips the probate process

How does a Trust skip the probate process? A Trust is an entity separate from you that holds your assets while your alive and sets forth how you want your assets handled after your passing. Since a Trust is a separate entity from personally, when you pass away your Trust continues. Since a Trust cannot “pass away” anything titled in the name of the Trust would not be subject to the probate process. Properly titling assets in the name of a Trust, often referred to as “funding,” avoids probate on those assets. This is why an experienced attorney will talk you through the process of retitling assets into your Trust.

Listing assets, changing titles

After the Trust is set up, the Trust ‘owns’ the property. A Trust is only worth the assets that are titled into it. This is the step that trips up many who don’t use an attorney for the trust. For many things – jewelry or collections as examples – the trust simply lists the assets in detail. Real estate is a bit different in that the deed or title (see related article) has to be changed to list the trust as the actual owner of the property. This isn’t complicated. Still, when this step is overlooked, your assets could end up in probate.

Avoid double counting and under counting

Your retirement plans and insurance policies already have beneficiaries. This money doesn’t end up in probate, but the assets also don’t flow into a trust, unless you’ve set the trust as the beneficiary. That tactic can seem confusing, but it points out the importance of looking at beneficiaries of things like life insurance and IRAs at the same time as the trust is created. You might have even forgotten who you listed as the beneficiary over the years since opening the IRA or policy.

In the last article, we covered the Pourover Will. The pourover helps you take care of assets you may have overlooked by sweeping them into a trust. In our next article, we’re going to cover Powers of Attorney that will help you take care of yourself.

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There are three types of wills about which you should give some thought. The Last Will and Testament is what most people know about and refer to generally as a “Will.” In addition to the Last Will and Testament, there is also a Living Will and a Pourover Will.

The Last Will and Testament

There are dozens of online templates that suggest you can do this yourself. The problem with that is simple: How many have you done? An experienced attorney will help you create a legally binding document that specifically suits your needs, expresses what your final wishes are, and is tailored to Wisconsin law. That’s so important, because the tool speaks for you after you pass on, directing how you want assets divided and appointing who will be in charge of acting on your estate’s behalf.

The Living Will

The Last Will and Testament becomes effective at your passing, while the Living Will speaks for you when you are unable to speak for yourself due to injury or illness. This document makes known your wishes regarding life prolonging medical treatments. This tool, also called an advanced directive, is every bit as important as the Last Will and Testament. However, a University of Pennsylvania Philadelphia study found that less than a third of adults have a Living Will.

The Pourover Will

We’re covering Trusts next in this series, but you should know that this particular tool can save the day for your loved ones. When you forget or neglect to add all property into your planning documents over the years– and people do forget to go back and revise their estate plan when circumstances change – this tool puts the forgotten property into a Trust. This tool got its name because any assets you failed to title into your trust prior to your passing will “pour over” into the trust after you are gone.

Stay up to date

You’re going to want to review all of these Wills and your wishes periodically, too, because ‘life happens.’ In the following two articles on the Estate Planning Toolbox, Wynn at Law, LLC, guides you through Trusts and Powers of Attorney.

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A lot can happen between one year’s holiday celebrations and the next. Some people pass, little ones are added to the family, sometimes relationships change for the better or worse. The value of your assets could change, too – hopefully upward. Your will, trust, insurance policy beneficiaries, gifts, and ownership interests, as a result, could change as well.

Use your best resource

Everyone should consider having an experienced estate planning attorney assist them in drafting or changing these estate planning documents. For example, Wynn at Law, LLC has worked on wills and trusts for single clients and couples in all stages of life, even couples or grandparents seeking to take care of minor children.

Estate planning is a broad, sometimes intimidating term. But it’s simply about caring. You decide how your assets are to be passed on to others. So, estate planning is about generosity first and foremost. It’s also about consideration of your family’s time, as well, because you can avoid questions, fights, and even probate by clarifying your wishes. A third objective also shows your caring and forethought by minimizing state and federal taxes your heirs may face.

Why you won’t delay

Often times, people will think about the changes they will want to make in beneficiaries once they’ve been reminded by seeing everyone over the dinners and celebrations. They are the clients who make appointments for January.

But, it’s very easy to sit down with an attorney before and during the holidays because the family is gathered near. Sometimes signatures might be required. A Power of Attorney might need to be appointed or changed. Is there a better time than when loved ones are gathered together? Ensure your loved ones are taken care of in the future this holiday season.

Elena Shashkina image, used with permission

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A Power of Attorney for Healthcare designates someone to represent you when you are unable to make decisions or unable to communicate decisions about your healthcare. This healthcare “agent” will be someone you trust to make all necessary medical decisions on your behalf and respect your wishes regarding life support, religion, and personal choices.

Why You Need a Healthcare Power of Attorney

A Power of Attorney for Healthcare covers situations that a living will does not. A living will takes affect if you are terminally ill, in a permanent vegetative state, or other similar condition defined by Wisconsin law. What happens if you are only temporarily in a coma or temporarily unable to communicate? This is where a Power of Attorney for Healthcare is used.

Power of Attorney for Finances

A Power of Attorney for Finances authorizes someone to represent you in financial matters. This “agent”, acting on your behalf, will have the authority to perform financial tasks, such as withdrawing money from your bank account or signing documents. A Power of Attorney for Finances can be effective immediately or after a future event.

Why You Need a Financial Power of Attorney

A Financial Power of Attorney is useful immediately if a person is leaving town and cannot be present for an important transaction, such as the sale of real estate. Most people design their Power of Attorney for Finances to be in effect upon a future event. This future event is usually if a person becomes mentally or physically unable to make important decisions. For instance, if you develop dementia or become comatose, someone would need access to your business and/or personal bank accounts to pay bills, etc.

Your “agent” must be at least eighteen years of age and of sound mind. Choose someone you trust. The authority your “agent” has is totally up to you. You may grant your “agent” the authority to only sign a single document during a single transaction or you may grant your “agent” the authority to act on your behalf regarding all your financial matters.

Speak with our Walworth County Estate Planning Attorney

Our Walworth County Estate Planning Attorney can design a Power of Attorney for Healthcare and/or Finances encompassing your wishes and ensuring the State of Wisconsin’s legal requirements. You should always be prepared in case of an emergency or accident. Contact our Walworth County Estate Planning Attorney by phone at 262-725-0175 or by email via our website’s contact page. Wynn at Law, LLC has estate planning law offices located in Lake Geneva, Delavan, Salem, and Muskego.

*The content and material on this web page is for informational purposes only and does not constitute legal advice.

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Who Inherits When a Loved One Dies With a Will in Walworth County?

If someone dies with a Last Will and Testament, they are said to have died “testate.” The Last Will and Testament describes who inherits the deceased’s assets. Each beneficiary and what item(s) they will inherit are listed in detail. The Last Will and Testament also describes who is named Executor, the person that will handle the deceased’s estate.

Who Inherits When a Loved One Dies Without a Will in Walworth County?

If someone dies without a Last Will and Testament, they are said to have died “intestate.” The State of Wisconsin‘s succession laws govern who inherits from an intestate estate. The deceased’s assets could end up going to a family member that is estranged or to someone they have not spoken to in years. To ensure your assets are dispersed according to your wishes, it is imperative that you create a Last Will and Testament.

Immediate Actions to Take When a Loved One Dies in Walworth County

1. Notify relatives and friends
2. Notify the physician
3. Notify the coroner’s office
4. Follow up with organ donations, if appropriate
5. Arrange for the care of minors, if applicable
6. Arrange for the care of pets, if applicable
7. Protect assets by locking the house, vehicles, business, and placing valuables in a safe place
8. Contact decedent’s attorney to assist with handling the estate
9. Check insurance policies
10. Make funeral arrangements
11. File the appropriate forms with the Walworth County Register in Probate within 30 days of your loved one’s passing

Contact Our Walworth County Estate Planning Attorney

If you need assistance creating a Last Will and Estate, contact our Walworth County estate planning attorney. We will assist you with creating a Last Will and Testament that distributes your assets according to your wishes. Obtain peace of mind regarding your estate by contacting our Walworth County estate planning attorney today. Our Walworth County estate planning attorney can be reached via phone at 262-725-0175 or via email using our website’s contact page. Wynn at Law, LLC has estate planning offices in various locations throughout the Walworth County area, including: Lake Geneva, Delavan, Muskego, and Salem.

*The content and material on this web page is for informational purposes only and does not constitute legal advice.

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What Are The Various Types of Digital Assets?

In general, digital assets consist of any type of information stored online, in the cloud, or on a person’s computer, phone, or server. Samples of digital assets are: emails (Outlook, Hotmail, Gmail), online investing information (E*Trade), online financial information, online bank accounts, online bill payment accounts (PayPal), social media profiles (Facebook, Twitter, Instagram), online photos, online videos, blogs, websites, domain names, online video game accounts, avatars, medical and prescription information (Patient Portals, Walgreens), all files storage on your computer, your smartphone data (address book, contacts, photos), etc. Some people may have digital assets with a monetary value, such as online businesses, photographers, authors, etc. Your digital property and memories will be lost if family members are unable to retrieve and access your data.

Why Must I Protect and Plan for My Walworth County Digital Estate?

Traditionally, financial information and bills are sorted at the deceased’s estate. In today’s day and age, many people pay bills online, through the creditor website or through their bank’s online bill pay program. With so many companies going paperless, all of your estate assets and debts may be inaccessible strictly through a paper trail.

If you have a social media profile, such as on Facebook, what will happen to your profile? You must leave specific instructions and login information for family if you want a say in what happens to your Facebook profile. If you do nothing, family may argue about whether to leave your page as a memorial or to delete it. There may be strong feelings attached to these options. If no one has your login information after your death, your family must contact Facebook to have your profile either removed or memorialized. Which would you prefer? Which would your family prefer?

Lastly, many states do not have laws enacted to protect digital assets after your death. Who will own this information? Your photos, videos, and family recipes are at risk. Is the information transferable?

Contact Our Walworth County Estate Planning Attorney

The fact is that Wisconsin is not keeping up with how digital assets are handled in an estate after a death. This will create stress, arguments, confusion, and possible extra expenses for your living family. Your first step is to prepare a list of all your digital assets and login information. Contact our Walworth County estate planning attorney to ensure the Personal Representative of your Last Will & Testament is given the proper information and instructions to manage your digital assets. You can contact our Walworth County estate planning attorney via phone at 262-725-0175 and via email on our website’s contact page. Wynn at Law, LLC has estate planning offices located in Delavan, Salem, Lake Geneva, and Muskego.

*The content and material on this web page is for informational purposes only and does not constitute legal advice.

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Southeastern Wisconsin Retirement Account Planning Terms

Before we begin to describe some of the most popular retirement account plans, we need to provide you with a few definitions. The first is the term “tax-deferred” or “defer taxes”. You will hear this a lot. This means you won’t pay taxes on the money until you start withdrawing it. As a result, the retirement money you save will continue to grow faster over time. The next term is “IRA”. IRA stands for “Individual Retirement Account” and it is just that, a retirement account provided by financial institutions with tax advantages to help people save for retirement.

List of Southeastern Wisconsin Retirement Account Plans

There are many different types of retirement accounts. All have different features and benefits. Let’s take a look at the different retirement account planning solutions.

Traditional IRA – With a Traditional IRA, you choose when and how often you place funds into the account. Contributions may be tax deductible. Earnings grow on a tax-deferred basis. Contributions are subject to statutory limits.

Roth IRA – With a Roth IRA, you make contributions with after-tax dollars. If certain requirements are met, the money you take out of the Roth IRA will be tax-free. The Roth IRA accrues earnings on a tax-deferred basis. Contributions are not tax deductible, but once the money is in the Roth IRA, it will never be taxed again. You choose how much and how often to place money in your Roth IRA. You can withdraw money from your Roth IRA before retirement without any penalties.

SEP IRA – An SEP is a retirement plan established by employers, including self-employed individuals. Employers make tax-deductible contributions on behalf of eligible employees, including the business owner. The employer will receive a tax deduction for making the contributions. Employees will not pay taxes on any SEP IRA contributions. Withdrawals and earnings from the SEP IRA are taxed. Many times, an employee must set up a Traditional IRA at a bank where the employer will make the SEP contribution. Each bank is different on whether the funding IRA will be a Traditional or SEP IRA. Since a Traditional IRA funds an SEP IRA, the funds are also subject to many Traditional IRA rules. (We know this one gets confusing.) An SEP IRA is a good option for self-employed individuals as you can fund your own retirement account and the maximum annual contributions limits are higher than other IRA accounts. You can also deduct the full amount of contributions from your income tax.

Simple IRA – Similar to an SEP IRA, A SIMPLE IRA is a retirement plan established by employers, including self-employed individuals. With a Simple IRA, employees contribute money to the plan before taxes. The savings are tax deferred. Employers are required to make either matching contributions or non-elective contributions. A non-elective contribution means the employer has chosen to make a contribution to all eligible employees retirement plans and the contribution is not based on the amount the employee has contributed. Employers get a tax deduction for their contributions. A Simple IRA is very similar to a 401(k).

Qualified Retirement Plan – A qualified plan is established by an employer to provide retirement savings for employees. Qualified retirement plan contributions and earnings are typically tax deferred. Employers receive a tax deduction for their contributions. A qualified plan may be a defined-benefit plan or a defined-contribution plan. A “defined-benefit” plan means the retirement savings are determined by an employee’s salary, years of service, and age. A “defined-contribution” plan means a certain amount or percentage is contributed by the employer each year on behalf of the employee. Withdrawals may be subject to penalties. 401(k)s, stock sharing plans, and profit sharing plans are all “defined-contribution” retirement plans.

403(b) Plan – A 403(b) plan is a retirement plan for certain public school employees, employees of tax-exempt organizations, and members of the clergy (pastors, priests, ministers). This type of retirement account is established and managed solely by the eligible employee.

Above, we have reviewed the most popular types of Southeastern Wisconsin retirement accounts. Yet, there are still many other types of plans available, such as SARSEP Plans, Payroll Deduction IRAs, Profit-Sharing Plans, Money Purchase Plans, ESOPs, Governmental Plans, 457 Plans, 409A Nonqualified Deferred Compensations Plans, and more.

Retirement Account Planning in Southeastern Wisconsin

If you are seeking assistance with retirement account planning in Southeastern Wisconsin, please contact our office. Our Retirement Account Planning Attorney can be reached via phone at 262-725-0175 or via our website’s contact page. We offer a free initial consultation.

*The content and material on this web page is for informational purposes only and does not constitute legal advice.

Photo by Flickr Creative Commons Tax Credits

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