Month: March 2012

An Advance Care Directive is Part of a Successful Wisconsin Estate Plan

In 2009, approximately 42 million people in the United Stated regularly provided care to an adult who required assistance with daily activities. Another 61.6 million provided care at some point during the year. As the nation’s population ages, more Americans will likely be required to assist aging or disabled parents and other loved ones. Unfortunately, caregivers are not always authorized to make medical decisions for the people they provide assistance to.

One of the easiest and most important steps an individual can take is to create an advance care directive. An advance care directive will generally include a durable power of attorney, a living will, and name a health care proxy. A durable power of attorney will designate an individual to make financial decisions for an incapacitated person. A living will provides instructions for care at the end of a person’s life and will normally specify whether artificial measures such as life support should be used. A health care proxy is similar to a power of attorney except it designates someone to make medical treatment decisions for a person who is no longer able to make such decisions or communicate with doctors.

Understandably, discussing an aging parent’s medical wishes is not always easy. By creating an advance care directive, an individual may be able to alleviate some of the decision-making burden often placed on family members such as children. Oftentimes, loved ones may disagree with one another regarding an individual’s care, or children may have a difficult time making tough medical decisions for a parent. An advance care directive can eliminate emotional obstacles and prevent a caregiver from being required to petition a court for decision-making authority through a guardianship or conservatorship.

Advance care directives are not just for the aging and disabled. Anyone can become incapacitated unexpectedly whether by accident, stroke, brain aneurism, or a variety of other causes. By failing to create a living will and a health care power of attorney, an individual who becomes incapacitated may be subject to health care decisions he or she would not have wanted. Because of this, it is a good idea to contact an experienced estate planning attorney to assist you with creating your advance care directive.

Wisconsin Appeals Court Holds Gifts in Contemplation of Death Were Not Delivered

A Wisconsin appeals court has ruled a dying man’s intention to forgive debts to several of his relatives in anticipation of his death were not valid due to a lack of proper delivery. 88-year-old Roger Hansen died before signing the last draft of a will in which he forgave mortgage loans made to his brother’s children and grandson totaling approximately $278,000. Because he died before his will was signed, his estate was distributed according to Wisconsin’s intestate succession laws and the mortgage loans were included in Hansen’s estate.

The relatives who obtained loans from Hansen argued early drafts of his will along with a letter to his attorney provided sufficient proof Hansen intended to forgive the loans. A Dane County Circuit Court Judge agreed and allowed the mortgage loans to be removed from Hansen’s estate. Another relative who did not have a mortgage loan from Hansen, but who was to receive an inheritance as part of Hansen’s intestate succession appealed the circuit court’s ruling.

The District IV Wisconsin Court of Appeals recognized Hansen’s intention to forgive the mortgage loans, but reversed the lower court’s ruling because the requirements for a gift in contemplation of death were not satisfied. According to the court, a gift in contemplation of death provides an exception to the statutory requirements of a will in Wisconsin. For such a gift to be valid, the gift grantor must intend for the gift to become complete at his or her death, must be contemplating death from a specific ailment which later takes the gift grantor’s life, and the gift must be delivered.

Although the relatives with mortgage loans argued delivery of the gift occurred when Hansen sent instructions to his attorney, the appellate court disagreed. According to the Court of Appeals, since Hansen failed to instruct his attorney to deliver the information to the would-be gift receivers, the gift was never delivered. The court stated the purpose of Hansen’s instructions was merely to provide guidance regarding his will and did not evidence his intent for delivery to the debtors.

One lesson from this is that if you are ill, an imperfectly drafted instrument that is signed is more valuable than a perfect one that is not signed. As I learned in the military, a good plan in time is better than a perfect plan too late. At Krause Law Offices LLC, we offer home and hospital visits and can produce documents in a hurry for cases where our clients are ill or facing major surgery. Sometimes this extra effort can save our clients’ loved ones hundreds of thousands of dollars. In cases like this, once a plan is in place, we can work to improve it if there is time.

Proper estate planning is essential to ensure your assets are transferred in accordance with your wishes at your death. It is even more crucial if you have minor children or own a family business. Common estate planning tools include wills, trusts, insurance, limited liability companies, powers of attorney, health care documents and more. If you have questions regarding completing a unified estate plan to protect your family, contact a skilled Wisconsin estate planning attorney today.

Using Estate Planning to Protect Your Wisconsin Family

Over half of American adults and approximately 92 percent of adults under the age of 35 have not written a will. Most assume they do not need a will because any assets left behind will automatically be inherited by family members. Although assets may be distributed according to state intestacy laws, the process can be lengthy. With proper estate planning, however, you may be able to avoid placing any additional emotional or financial burden on your family after your death.

It is a good idea to create a will once you begin acquiring assets or start a family. In addition to designating how your assets will be distributed upon your death, your will designates an executor who will manage them until they are distributed. If you are a parent, you should also select a guardian who is likely to survive until your minor children reach the age of majority in the event both parents pass away.

Other useful estate planning documents include a durable power of attorney and a healthcare proxy. A durable power of attorney will allow your designee to make financial and legal decisions on your behalf if you become unable to do so. Similarly, a healthcare proxy allows a designee to make medical decisions for you if you become incapacitated and cannot do so yourself. By designating a power of attorney or healthcare proxy, you may save your family from being required to take the matter to court in the midst of an unexpected healthcare crisis.

Creating a trust for your assets may be helpful in some instances. A trust may also provide you with more control than a traditional will can. The type of trust in which you place your assets will depend on your financial goals. For example, a trust can be established to make distributions based on the age of your children or be used to care for a special needs child. You can even set up a trust to provide the financial resources to care for a pet. Trusts may also be designed in such a way they are inaccessible to creditors.

It is essential to stay abreast of estate tax changes which may complicate or undermine your estate planning goals. Currently, $5.12 million in assets are exempt from federal estate taxes, but that number will change in 2013. Also, keep in mind each state handles estate taxes differently. Although Wisconsin does not currently charge an estate tax, it has in the past and this could soon change. Certain types of trusts such as a grantor retained annuity trust may also reduce your family’s estate tax obligations. Other avenues for reducing estate taxes include giving property or cash to family members over time and paying for educational or medical expenses. A qualified estate planning, wills, and trusts lawyer can explain your estate planning options.

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