Credit reports are generated by three credit reporting agencies (CRAs) – Equifax, Experian, and TransUnion. Your credit report may vary depending on which agency the report comes from, as creditors can choose which bureau to report to and not all creditors report to every bureau. To pull your credit report for free from any of the CRAs, visit annualcreditreport.com.

What is Included in a Credit Report?

Contrary to popular belief, most credit reports do not contain your credit score without paying an additional fee. Rather, a credit report contains information related to your borrowing and payback history, as well as other information valuable to lenders. For example, it is typical to find the following types of information on your report:

• Past and current credit accounts/loans,
• Payment history – such as on-time, missed, or late payments (including amounts in collections)
• Foreclosures and repossessions,
• Bankruptcies,
• Past and present addresses,
• Relevant public record information such as liens, civil suits, and judgments, and
• Companies who have accessed your credit report

Why Would I Need to Access My Credit Report?

a. Applying for a loan

It is a good idea to access your credit report prior to applying for a loan or any other large credit-related purchase. This allows you to be prepared for what your lender will see and make sure that the report is accurate. It is not uncommon for a credit report to contain errors, which is why it is recommended to check your report from all three agencies at least once a year.

b. Scanning your report for errors

Any errors on your report can be disputed with the credit bureau who issued the report, the company whose information is inaccurate, or with the Consumer Financial Protection Bureau (CFPB). The CFPB recommends first disputing the error with the credit agency (Experian, Equifax, or TransUnion) by explaining the error and providing any supporting documentation. The CFPB’s website provides sample templates for filing disputes and other helpful dispute-related information, which can be accessed here. If the agency finds an error, it will report the error to the other two agencies.

What About Credit Scores – How Do I Find Mine and What Affects It?

The three credit agencies discussed above also create a credit score, which is a 3-digit number ranging from 300 to 850. Credit scores can also be accessed by most credit card companies/lenders. However, each agency’s credit reporting algorithm is different, which will result in different scores.

One well-known credit scoring agency is FICO, which generates a FICO-score. A FICO-score is the same thing as a credit score, just based on FICO’s credit reporting algorithm. The FICO scoring system is similar to most other credit scoring companies and thus a helpful guide for what factors affect your score. Under this system, there are 5 key factors[1]:

1. 35% of your score is based on your payment history:
   • Includes late payments – the later they are, the worse for your score
   • Includes accounts sent to collections
   • Includes bankruptcies, liens, foreclosures, and other public info
   • Takes into account the time the time since a missed payment and frequency of missed payments
2. 30% is based on your credit utilization:
   • Calculated by comparing your available credit to the amount you utilize – lower utilization is better for your score
3. 15% is based on the length of your credit history:
   • Old accounts can help boost your score
4. 10% is based on new credit accounts/ how many total accounts you have open:
   • Opening new accounts requires a lender to do a hard inquiry, which can temporarily lower your score
   • Opening may new accounts within a short period of time may lower your score
5. 10% is based on the types of credit you have (your credit diversity):
   • It is better for your score to have a mix of accounts – such as a mortgage loan, car loan, and credit card loan

What is the Deal With “Freezing” my Credit and When Should I do That?

A credit freeze temporarily stops lenders from accessing your credit report. People may freeze their credit if they have been the victim of fraud and are worried that the fraudster is attempting to open new accounts in their name. Freezing your credit will not lower your score and is free to do, but you must remember to un-freeze your credit (and dispute any fraud on your report) prior to opening a new account. To freeze your account, visit each of the three agencies’ websites and follow the instructions.

Conclusion

The best advice when dealing with your credit report and credit score is to be proactive – check what is on your report regularly and make sure it is accurate, dispute errors, and initiate a credit freeze when necessary. Do not be passive when it comes to your credit – investing in your financial health requires more than checking your score.

Schedule a consultation with Wynn at Law, LLC today to discuss your debt relief options and how the options affect your credit report and credit score.

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.

[1] How are FICO Scores Calculated? | myFICO

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Wisconsin’s Managed Forest Law (MFL) and Forest Crop Law (FCL) programs encourage private landowners to use their property for sustainable forestry by offering reduced property taxes.[1] The MFL program is the only program currently open for enrollment, as the FCL program was closed in 1986. Private landowners have the choice to enroll in the MFL program for either 25 or 50 years.[2] Those enrolled in the program work with the DNR to create a plan to accomplish objectives such as: production of timber trees for harvesting, protection of wildlife, and preservation of recreational activities such as kayaking, swimming, and hiking, in addition to other forest health goals. The production of timber trees is the main objective of the program.

B. Eligibility Requirements

1. To qualify for the MFL program, you must have at least 20 acres of contiguous land, which can either be composed of one 20-acre parcel, or two 10-acre parcels that touch one another.
2. At a minimum, 80% of the MFL land must be capable of producing merchantable timber.[3] The other 20% of the MFL land can be land that is unsuitable for wood production, such as swampy or sandy land.
3. The length of the portion of land that is capable of producing timber must be at least 120 feet wide. Sections less than 120 feet are still permitted, so long as the width ratio is 4 to 1, or less.[4]
4. If the MFL is renewed or entered into the program in 2017 or later, then the land may not contain any buildings, except those used exclusively for storage.^[2] However, if your parcel is larger than 20 acres, you may designate only part of it as MFL land and use the non-MFL land for building purposes. Structures and fixtures needed for sound forestry are allowed, but must be agreed upon with the Wisconsin DNR.[5]
5. The MFL land may not be within a recorded subdivision.[6]
6. The parcel that the MFL parcel falls within must be up-to-date on property taxes.^[2]

C. Public MFL Land Versus Closed MFL Land

MFL land must either be designated as “open” or “closed” to public recreation. If the land is designated as open, then there must be access to the public by foot for the following activities: hunting, fishing, hiking, sight-seeing, and cross-country skiing.[7] There are numerous other requirements for MFL land that is open to the public and what “open to the public by foot” requires.[8] Although open MFL land requires a few more requirements and monitoring efforts, landowners enjoy a lower tax rate than MFL landowners with land designated as “closed”.

If you are interested in finding open MFL land near you, visit the Wisconsin DNR’s Public Access Land Map at the following link: Wisconsin DNR. Although the public does not have to let an owner of open MFL land know that they will be accessing the land, the DNR recommends letting the owner know as a courtesy and also for safety purposes.^[2]

Those who wish to designate their MFL land as “closed” should note that each municipality may only allow up to 320 acres total to be designated as closed. All 320 acres can be under the same ownership, thus pushing new MFL prospects out, unless they designate their land as open. However, MFL owners whose programs took effect on or after April 28, 2004 may modify their “open” or “closed” designation up to 2 times during the term of their program.

D. Management Plan

A management plan is the governing document for a landowner’s participation in the MFL program and is laid out by an initial discussion with a Certified Plan Writer or the Wisconsin DNR itself.  Certified Plan Writers can either work independently of the WDNR or can be contracted by the WDNR. Either way, the management plan must be prepared by a Certified Plan Writer or the department.[9] The management plan contains some mandatory rules, such as harvesting timber per the plan’s standards, tree planting and treatment, soil control, etc.

Failure to comply with the management plan results in a $250 non-compliance fee per mandatory provision, which are collected by the municipality where the land is located. These fees can stack up quickly in the event of more than one mandatory violation and if they are not paid timely.[10] In addition to Certified Plan Writers, local Tax Law Forestry Specialists are available to assist with the questions regarding management plans and to remind landowners of mandatory practices.

E. Perks of the MFL – Forest Certification and Selling Your Trees

Those enrolled in the MFL program can also voluntarily enroll for membership in the “MFL Certified Group”, which allows members to sell timber as “certified” to the open market once timber becomes ready to harvest.^[2] This means that the timber has the seal of being sustainably produced, and enrollment in the group provides members with educational resources. To harvest the timber, a landowner should consult a professional forester, a list of which can be found on the DNR’s website.

F. Selling or Transferring Designated MFL Land

Sellers of real estate enrolled in the MFL program are required to disclose the status of the MFL land to prospective buyers in either the residential or vacant land condition report. After a property sale is completed, the new owner must either file a transfer form to keep the land designated as MFL or voluntarily withdraw from the program within 30 days.[11]

A seller has 10 days after acceptance of the land purchase contract to provide the buyer with required information involving: a disclosure stating that the land will continue to be enrolled in the MFL program, the program’s length (25 or 50 years), and a disclosure informing the buyer that the DNR will continue to monitor the forest for compliance with the MFL plan.^[2]

Buyers and/or sellers are entitled to withdrawal from the program at any time, but are subject to withdrawal fees, discussed below.

G. Withdrawing from the MFL Program and Associated Fees

Withdrawal from the MFL program may either be voluntary or involuntary. Voluntary withdraws may occur at any time, but are subject to a withdraw tax, which can be significant. The withdraw tax is typically calculated by multiplying the tax rate the property was subject to in the year prior by the assessed value of the land in the year prior, and then multiplying that number either by 10 or the number of years that the property was part of the MFL program, whichever number is fewer.[12] However, the withdraw tax can be calculated in a different manner, as it depends on how the land was entered into the MFL program.^[2]

Voluntary withdraws can also be accomplished for only part of the MFL land, such as if the owner wishes to construct on part of the MFL land. This type of construction withdraw is subject to a few more conditions, which can be found in Wisconsin Statute § 77.88(3)(b). The Wisconsin Department of Revenue can help landowners estimate the withdraw tax, but such service is subject to a fee.[13]

An involuntary withdrawal may occur for violation of the stipulated MFL obligations, such as constructing a building on productive forest land, and is subject to a $300 withdrawal fee in addition to a withdrawal tax.^[2] In addition, each failure to comply with a forestry practice, as specified in an owner’s management plan, is subject to a $250 noncompliance assessment.[14] For more information on withdrawing from the MFL program, landowners are encouraged to contact their local Tax Law Forestry Specialist.

Conclusion:

If you own land that you are considering enrolling in the MFL program, reach out to a Certified Plan Writer (CPW) to discover your options. CPWs are required as part of the process, so it is not a bad idea to consult one early to ensure that all requirements are met. If you are in the market for land and find out that it is part of the MFL program, make sure you understand what the requirements of the program are and what the withdraw taxes will be, if applicable. Tax Law Forestry Specialists are also helpful resources to understand the MFL program’s implication on property taxes.  A list of CPW’s and Tax Law Forestry Specialists, as well as more information on the MFL program can be found on the DNR’s website: https://dnr.wisconsin.gov/topic/ForestLandowners

While Wynn at Law does not assist with the enrollment or withdraw of MFL land, we assist with the purchase or sale of land that is enrolled in the program.

Schedule a consultation with Wynn at Law, LLC today to discuss the purchase or sale of real estate that is enrolled in the MFL program.

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.

Sources:

[1] Wisconsin Department of Natural Resources website. Managed Forest Law | | Wisconsin DNR

[2] Wisconsin Department of Natural Resources Program Summary 972b04e8-4a3e-49f8-aaee-fb537b0a7d51.pdf (widencdn.net)

[3] Wis. Admin. Code § NR 46.17(1)(a)

[4] Wis. Admin Code. § NR 46.17(2)

[5] Wis. Admin Code § NR 46.17(3)(c)

[6] Wis. Admin Code § NR 46.15(18)

[7] Wis. Admin Code. § NR 46.20(1); Wis. Stat. 77.83(2)(a)

[8] See Wis. Admin. Code § NR 46.20; See also Wis. Stat. §77.83(2)

[9] Wis. Stat. 77.82(3)

[10] See Wis. Stat. 77.876(1)-(2)

[11] Wis. Admin Code § NR 46.23(1)

[12] Wis. Stat. § 77.88(5)

[13] https://www.revenue.wi.gov/DORForms/pr-296f.pdf

[14] Wis. Stat. § 77.876

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What to Know Before Using Your Property as an Airbnb, VRBO, or Other Short-Term Rental In Wisconsin:

1. Know Wisconsin State Law Governing Short-Term Rentals

In 2017, Wisconsin enacted a new short-term rental law to combat restrictions that municipalities and other local governments were placing on short-term rentals. The law defines short-term rentals as those for residential dwellings that are offered for rent for less than 30 consecutive days.[1] This law is codified as Wisconsin Statute 66.1014, and has been termed the “Right to Rent Law” as one of its main purposes is to prevent “political subdivisions” (defined as: cities, towns, villages, or counties – which will be referred to as “municipalities” in this blog) from prohibiting property owners from renting their residences for seven consecutive days or longer. Therefore, municipalities can place restrictions on rentals that are shorter than 7 days, so long as they do not conflict with State law. Municipalities may also place restrictions on rentals that are between 7 and 29 consecutive days, but these restrictions must still allow a short-term rental host to rent for at least 180 days a year. The Right to Rent law also requires anyone who rents their residence for more than 10 nights a year to purchase a touring rooming house license from the Department of Agriculture, Trade and Consumer Protection (DATCP). These licenses cost $110 per year and require a one-time inspection fee of $300.[2] The law allows municipalities to also require their own licenses, which must be purchased in addition to the DATCP license to lawfully conduct short-term rentals. The last state player in the short-term rental game is the Wisconsin Department of Revenue, which requires an owner of a short-term rental to report and pay Wisconsin state sales tax on rentals.[3] Websites like Airbnb and VRBO will collect and remit the sales tax for you.[4]^,[5]  These websites also collect other county and local taxes, if applicable. Essentially, the Right to Rent law sets the framework for what laws municipalities may enact. The law encourages municipalities to enact their own ordinances on short term rentals to limit nuisances and keep residents happy. Each municipality can choose its own registration and inspection requirements, fees, and other limitations. This is why it is extremely important to know your municipality’s short-term rental requirements.

2. Know Your County and Municipality’s Laws and Ordinances Governing Short-Term Rentals

Before going straight to renting your home, first consider whether your county has any restrictions. Walworth County has its own ordinance, which requires short-term rental owners to obtain a County License.[6] The County License has a $500 fee for the first year and a $200 annual renewal fee thereafter.[7]^,[8] Along with the County license, an owner must submit the property rules that apply to the rental, which have certain requirements of their own.[9] Keep in mind that Walworth County and the State of Wisconsin have additional requirements for short-term rentals that are serviced by a private septic system, serviced by a private well, and located on a lake. To ensure that all County requirements are met, be sure to read up on Walworth County’s Code of Ordinances and consult the County’s Land Use and Resource Management Department. Other municipal code regulations on short-term rentals that may apply include:

• Proof of property and liability insurance,
• Number of parking spaces that must be offered,
• Proof of floor plan specifications,
• Fire inspection,
• Business registration,
• Nuisance regulations,
• Quiet time hours,
• Local property manager requirements

3. Know Your Homeowner Association’s Restrictions on Short-Term Rentals

Something you may have noticed about the Right to Rent law is that the definition of “political subdivision” does not include a homeowner’s association. This means that associations can place complete restrictions on short-term rentals. The trend with associations within Walworth County seems to be placing a ban on short-term rentals altogether to stay consistent with the association’s goals and other rules. Banking on using a residence located within an association as a short-term rental is risky, as the association could vote to prohibit short-terms rentals in the future. If your residence is part of a homeowner’s association, you should make sure to read the association’s rules and bylaws. Another thing to look out for are associations that are currently inactive – the creation of a homeowner’s association should show up on the title work that is ordered when you purchase or sell a residence. An inactive association is still an association that can be brought back to life by its members, whether those members are composed of the owners of residences within a subdivision plat or a developer. If your residence is part of an association, this is the first place you should look to in determining whether a short-term rental is allowed.

4. Consider the Advantages and Disadvantages of Short-Term Renting

If you are considering using your property as a short-term rental, not only should you make sure that you are abiding by state law, local law, and any homeowner’s association restrictions, but you should also consider the advantages and disadvantages of short-term renting. Financially, short-term renting can not only brings in more income than a long-term rental, but also may allow rental owners to claim tax deduction benefits for things such as property maintenance, insurance, and utilities. Additionally, as a short-term renter, you can be flexible and choose to rent as much or as little as possible. While the financial freedom and flexibility that comes with short-term renting is quite enticing to those looking to begin their short-term rental journey, you should also be aware of some disadvantages. Unfortunately, short-term rentals can drive up housing prices. Also, as this blog has shown, the laws regarding short-term rentals can vary between municipalities, which means that if you have multiple rentals in different locations, you will have to keep track of each municipality’s rules to avoid potential expensive fees. A third downfall is the noise and nuisances that rental properties may create – noise violations, theft, and property damage to name a few. Lastly, be sure to check your homeowner’s insurance policy as some insurance carriers will not cover any damage that occurs at a property when the home is being used as a short term rental.

Conclusion

Wynn at Law, LLC assists clients who are looking to purchase property to be used as a short-term rental, clients selling short term rentals and clients who are purchasing property already used as one. Attorney Shannon Wynn or Attorney Ciara Doherty can help navigate buyers as to where to look to ensure a short-term rental is allowed, can review and explain title work that may have restrictions on short-term renting, and can help buyers feel empowered and informed throughout the entire process.

Schedule a consultation with Wynn at Law, LLC today to discuss the purchase or sale of short-term rented real estate.

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.

SOURCES: [1] Wis. Stat. 66.0615(dk)

[2] DATCP Home Tourist Rooming Houses (wi.gov)

[3] DOR Homeowners and Individuals Selling Short-Term Lodging (wi.gov)

[4] Collection and remittance of taxes and lodging taxes | Help (vrbo.com)

[5] Occupancy tax collection and remittance by Airbnb in Wisconsin – Airbnb Help Center

[6] Walworth County, Wisconsin Code of Ordinances. Chapter 26, Art. VII. ARTICLE VII. – OFFERING A RESIDENTIAL DWELLING AS A SHORT TERM RENTAL | Code of Ordinances | Walworth County, WI | Municode Library

[7] Wisconsin Division (walworth.wi.us)

[8] Wisconsin Division (walworth.wi.us)

[9] See Walworth County Code of Ordinances, Chapter 26, Art VII, Sec. 26-343.

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1. Consider how easy it would be to sell the home

The last thing on a first-time buyer’s mind is the sale of the home they are about to buy; however, this is a crucial consideration if you ever want to step up in the home-buying game. It is likely that the proceeds from the sale of your first home will be used to purchase your second home, and that your second home may contain a few more bedrooms, an extra bathroom, or other features that were not in the budget at the time of your first home purchase.

To ensure that you can reap enough of a profit to make the step up to a bigger and better second home, you should be paying attention to the market and considering whether your home will eventually sell for more than you purchased it for. To help keep your home value up, you should make sure that you allocate money from your yearly budget to keep up with the maintenance of the home. Part of this allocation should be for an emergency fund in the event that an expensive and unexpected repair arises. Other things to consider are the desirability of the location, its related school district, distance to shopping, how well the surrounding homes are maintained, etc.

2. Ask for a home inspection contingency

A great way to reduce your risk of inheriting an expensive repair with a home is to make your offer contingent on an inspection. If possible, try to attend your home inspection and ask the inspector questions – if the inspector notices something that needs to be repaired, they may be able to give you a rough fee estimate and other insightful information.

Know how this contingency works. To ensure you know your rights when it comes to a home inspection, you should hire a lawyer. A lawyer can advocate for your interests if the inspection report either makes you no longer want to purchase the property or makes you only want to purchase subject to certain conditions and repairs. A lawyer can also help you understand the type of inspections you may have, how many, when, and other deadlines that need to be met to preserve your rights under an inspection contingency.

3. Shop around for your mortgage

If you are financing your home with a mortgage, you should shop around or consider using a mortgage broker, who can shop around for you. Lenders will offer different interest rates, and the best way to ensure you are receiving the lowest rate is to call around or use a broker. You do not have to begin the underwriting process with each lender to obtain a rate estimate, rather you can call around and ask hypothetical questions such as what your rate would be with your current credit score, the amount you anticipate putting down, and by providing your debt-to-income ratio.

4. Understand your title insurance policy

A title insurance policy not only protects you against some issues that may later arise with ownership of the home, but also provides insight into any judgements, liens, mortgages, restrictions, and/or covenants that may encumber the property. Understanding these documents is important for a variety of reasons, but especially if you plan on building an addition, constructing a pool, a shed, or making any other significant property modification that requires a permit or understanding association rules if the property is in a subdivision.

It is not uncommon for unexpected things to show up on a title policy, which is why hiring an attorney to explain the title policy and review other title work, including your final closing statement, is a good idea.

5. Consider what each party has to gain from a transaction

Nearly every party you encounter who assists with the purchase of your home has an interest in ensuring that the sale goes through – your loan officer only receives their cut if the loan is approved, an agent only receives their commission if the home closes, and even the title company only makes out on their title fees if the sale is successful. The only party who does not have an interest in the sale going through is an attorney, as attorneys are not paid based on a successful closing, and an attorney’s only focus is to help you, whether that is to help you buy the property or help you in getting out of the purchase.

The excitement of purchasing a home can be overwhelming and emotional, which is why it is crucial to approach the process with a clear head. A disinterested party, such as a real estate attorney, can help you navigate the legal aspects of the home-buying process, avoid potential pitfalls, negotiate effectively, and ensure a smooth closing. Contact our attorneys at Wynn at Law, LLC for assistance with the purchase of your home – we can help you navigate the entire process from start to finish, whether you are represented by an agent or not.

Schedule a consultation with Wynn at Law, LLC today to discuss the home buying 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.

The post Five Things I Wish I Knew as a First Time Home Buyer appeared first on Wynn at Law, LLC.

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.

The post How do I make sure my child is taken care of if I die? appeared first on Wynn at Law, LLC.

In 2019, a class action lawsuit was filed against the National Association of Realtors (NAR) and other national brokerage firms alleging that NAR’s rule (which required brokers to advertise on the Multiple Listing Service (MLS) that a seller would compensate the buyer’s agent) was a violation of antitrust laws and had artificially inflated agent commissions. A settlement in this case has been reached and went into effect on August 17, 2024. The settlement requires NAR and other brokerages to pay $418 million to eligible class members and prohibits advertisements on MLS of agent compensation. Now, MLS participants (buyer’s agents) must enter into a written agreement with the buyer/ potential buyer regarding agent compensation before touring the home.

How do I know if I am entitled to payment under the settlement?

The settlement website states that you an eligible class member who can file a claim for compensation if:

• You sold a home on MLS in Wisconsin between October 31, 2017 – July 23, 2024[1], and
• Paid a commission to a real estate agent/broker in connection with the sale.

Claims must be filed by May 9, 2025, by visiting the settlement website, www.realestatecommissionlitigation.com.

How does the NAR Settlement Affect Wisconsin?

The historical practice of sellers compensating buyer’s agents has been called into question in the wake of the media headlines associated with the lawsuit, which claim, among other things, that buyers may end up paying more. How buyer’s agency agreements will affect the real estate market is uncertain, but it may be comforting to know a few things:

• The standardized offer forms (WB forms) Wisconsin uses for real estate transactions have been recently updated to include a provision for seller compensation to the buyer’s agent.
• Buyers’ agency agreements can be flexible – the term of the agreement may be for just a few days, just for the showing, a flat fee, etc. Buyers should make sure to read the agency agreements, as they are likely to differ.
• The rules do not affect the rights of both buyers and sellers to negotiate. Rather, the new rules will likely make negotiations clearer and more transparent.

[1]  (realestatecommissionlitigation.com)

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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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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A Chapter 7 bankruptcy filing stays on a FICO record (aka ‘credit score’) for 10 years from the date you file your bankruptcy. It’s seven years from the date of filing for a completed Chapter 13. Either may sound like a very long time. But first and foremost, it beats the bind that led to the filing. The creditor calls (see related article on the Automatic Stay) are a thing of the past. The stack of bills next to your checkbook might be considerably shorter and probably better matches your paycheck.

Credit scores react first

A bankruptcy filing is serious business and should be given serious thought prior to filing. That being said, it does have some potential bright spots as a new beginning.

Hidden among the bad news that your credit score likely will go down upon filing bankruptcy is the fact that your score probably was in bad shape before the filing anyway. And heading for worse. Another silver lining is that many of your debts are gone; therefore, the bankruptcy will make your debt to income ratio much better. In both Chapter 7 and Chapter 13, delinquent accounts before filing remain on your credit report. In Chapter 7 cases, they will stay on the report for seven years. Chapter 13 debts are often paid off according to the bankruptcy payment schedule in three to five years. Since these debts are repaid all or in part, the records will be removed from your credit report sooner than Chapter 7 debts, which aren’t repaid at all.

You can get credit again

It isn’t going to happen overnight, but you will have an opportunity to rebuild credit. More, shall we say ‘aggressive,’ lenders swoop in first with high interest credit card and auto loan offerings right after filing. Resist the temptation, if possible. As you rebuild a steady track record of paying on-time things like mortgage payments, car payments, and student loan payments, better chances to rebuild credit will come. Usually a secured credit card opportunity is going to come your way first.

Once you establish a good payment record and are living within your means, lenders will see you as a decent risk. Why? They know you can’t file another Chapter 7 bankruptcy again for eight years after your previous Chapter 7 filing.

You know your pitfalls

The best outcome in a bankruptcy filing is that you’ve learned from and implemented corrections to previous money errors or have been able to put a horrible life event behind you like a medical emergency or car repossession. You’ll know the consequences of paying late, for example. You also learn to budget. And stick to it.

Image by Andrew Lozovyi, used with permission

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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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