Month: August 2012

Your Overall Wisconsin Estate Plan Should Also Consider Your Digital Assets

Do you have a plan in place to protect all of your assets following your death? Before you answer, consider this: social media and cloud computing have changed the way most people do business. Personal and professional information about you may be available on the internet through websites such as Facebook, Twitter, LinkedIn, and blogs. Most people also have access to bank accounts, credit card information stored on websites, email, and photos online. Additionally, cloud-based file sharing programs such as Dropbox allow more and more personal and sensitive information to be stored electronically. You have the ability to monitor and protect much of this digital information while you are alive, but do you have a plan in place for protecting your digital assets after your unexpected incapacitation or death?

Although most traditional estate plans will name a personal representative who will be tasked with caring for and distributing your physical assets following your death, many do not specify how your electronically stored information should be handled. This may be a mistake. If you have an online presence, it is a good idea to state in your overall estate plan exactly how you would like your digital assets handled after you die. Additionally, specific instructions regarding management of your digital assets should you become incapacitated may be included in your living will.

It is important to note that the same individual does not need to be chosen to handle both your physical and online assets. Regardless of who you select as your online executor, you should choose someone who is likely to follow your wishes and willing to spend the time necessary to fulfill your requests. Additionally, specific information regarding your wishes for each of your accounts should be provided to your online executor.

Increasingly, the privacy policy of the cloud-based services you utilize will determine how much information you will need to provide to your online executor. In some instances, a personal representative will be required to have your password in order to make any requested changes. In other cases, a death certificate will suffice. To be safe, it is a good idea to maintain a list or inventory of all of your cloud-based accounts and passwords. This can be difficult, however, as passwords tend to be updated frequently.

If you own a business, maintaining a digital asset plan is especially vital. For example, digitally stored information regarding business or client information may be difficult to retrieve without proper planning. Additionally, partners or those who inherit your business may need access to a password protected computer, smartphone, or other device. Although it is vital for you to protect sensitive client or business information, you must also have a carefully considered succession plan in place.

If you have not considered creating a digital estate plan, now is the time to do so. Contact a skilled Wisconsin estate planning attorney to assist you.

Protecting the Financial Health of a Surviving Spouse in Wisconsin

On average, women in the United States live five years longer than men do. Up to 70 percent of the women who are part of the baby boomer generation are expected to outlive their spouses. In fact, the trend has already begun. In 2006, there were approximately two million baby boomer widows. As the 78-million baby boomers living in the U.S. grow older, that number is expected to climb as high as 20 million.

According to financial planners, many baby boomer women lack experience managing financial assets. In fact, about 40 percent of married women reportedly let their spouse handle all of their retirement planning needs. Unfortunately, many Americans have failed to properly fund their retirement, savings, and investment accounts. Additionally, one survey found nearly 80 percent of women believe they lack the ability to make informed financial planning decisions. In addition to the emotional turmoil experienced by many boomer widows, harsh financial realities often result. Careful advance planning can help everyone who loses a spouse avoid financial ruin.

The first thing spouses of any age can do to protect one another’s financial future is to begin the estate planning process. Do not wait for an illness or unexpected tragedy to begin taking measures to plan for the financial health of loved ones following your death. It is also important to ensure each spouse has access to all banking and other financial accounts. Wherever possible, assets and financial accounts should be titled jointly or in a joint trust to ensure they may be utilized by a surviving spouse immediately. Otherwise, a widow or widower may be required to wait for the probate process before gaining access to the assets. If one spouse handles all of a couple’s financial matters, his or her partner should be made aware of all life insurance policies, account numbers, important contacts, and pins or passwords. By thoroughly documenting all financial accounts, neither spouse will be left in the dark or placed in the position of attempting to make sense of random financial statements following the death of a partner.

Another way to financially protect a surviving spouse occurs when the primary earner in the household waits to collect Social Security. Although baby boomers are eligible to begin collecting Social Security at age 62, the monthly payments will be reduced. Unfortunately, if the primary earner in a household chooses to collect their benefit at age 62, that reduced payment amount also passes on to the surviving spouse following their death. In contrast, individuals who wait until age 70 to collect Social Security will receive a larger monthly payment that may assist a surviving spouse for many years to come.

Perhaps the most important thing a married couple in Wisconsin can do to protect one another from financial ruin is to consult with an estate planning attorney, along with a financial planner and an insurance expert. In order to fully protect your loved ones, it is essential to create or update estate planning documents prior to your death. By taking care of this before an issue arises, you and your spouse remain in control. If instead you choose to rely on the courts to ascertain your intent, it will likely be both costly and time consuming for your widow or widower and other loved ones. Because your end of life wishes may change, it is a good idea to have a capable Wisconsin estate planning lawyer review your estate plan on a regular basis.

A Living Will May Still Leave Loved Ones in Wisconsin With Questions

The concept of creating living wills began about 50 years ago. A living will is a document that outlines your exact medical treatment wishes should you become incapacitated or otherwise unable to express those wishes. The subject often gains national attention when a family disagrees regarding how to care for a loved one who unexpectedly falls into a vegetative state. Too often, a court battle between the relatives of an individual who has not created a living will ensues in such cases.

Today, nearly 30 percent of Americans have created a living will designed to express their desires in the event of a coma, persistent vegetative state, or terminal illness. Unfortunately, medical technology has advanced in ways many people do not consider and a physician is not always able to predict medical outcomes. Consequently, many living wills leave loved ones struggling to make medical choices where the document is silent, especially with regard to questions regarding a patient’s future quality of life.

You can download simple Wisconsin Living Will form at the Department of Health Services web site.

Although some health care organizations have advocated for greater flexibility in living wills, others believe a health care agent should be appointed as part of your overall estate plan. According to Robert M. Veatch, a Professor of Medical Ethics at Georgetown University, an individual can avoid vagueness in a living will document by choosing a trusted relative or friend to speak on their behalf in the event of a medical emergency.

Dr. Angela Fagerlin, Co-Director of the Center for Bioethics and Social Sciences in Medicine, said many people do not articulate their wishes properly in a living will. She also stated family members often have a difficult time interpreting a loved one’s written wishes. In a 2001 study of 400 patients, she found relatives were only able to accurately predict their loved one’s wishes about 70 percent of the time whether or not a living will was provided. Still, even where a person chooses to appoint a health care agent, a living will can guide the choices of the person selected. A living will may also serve as evidence regarding an individual’s wishes.

Strokes, heart attacks, and other health issues can arise without warning. If you are concerned about the impact an unexpected health complication may have on your family, you should consult with an experienced estate planning lawyer. By creating both a living will and a health care power of attorney as part of your comprehensive estate plan, you may be able to relieve some of the burden placed on your loved ones following a sudden illness or incapacitation.

Milwaukee Case Demonstrates Why Merely Creating a Will is Not Always a Sufficient Estate Plan in Wisconsin

Many people create a simple will and feel they have provided for their loved ones and heirs. Although they can potentially be valuable estate planning tools, wills also have many shortcomings. Because a will is essentially a list of instructions regarding how a decedent’s assets should be distributed, it normally has little value until the estate enters the probate process. In probate, a judge is tasked with determining whether a will is valid and how the assets in an estate are to be distributed. Unfortunately, as the Derzon case described below demonstrates, the probate process can be lengthy, expensive, and public.

In 1959, David Derzon began a collectibles business that is still currently operating in Milwaukee. When he died in 2007 at age 83, he left the bulk of his approximately $3 million estate, including the family business, to his 59-year-old wife, Rebecca. Prior to David’s death, Rebecca’s own will stated the Derzon estate would pass to David’s two children from a previous marriage and her half brother. A few months after David’s death, however, Rebecca’s will was rewritten. When Rebecca died unexpectedly less than one year after her husband, her will left the entire Derzon estate to her half brother and sister, nieces, and nephews.

One of the main issues involved in the Derzon litigation is the mental and physical state of the couple at the time their wills were created. David’s two sons claim their father was recovering from brain surgery and unable to understand the implications of his decisions at the time his 2007 will was signed. David’s children also believe Rebecca’s half sister, Lori Laatsch, improperly influenced her to change her will in 2008.

According to David’s sons, Rebecca, who reportedly died from an accidental alcohol overdose, was extremely depressed following the death of her husband and suffered from substance abuse issues at the time her last will was created. Additionally, the children allege Laatsch, who inherited 75 percent of their father’s business, went years without speaking to Rebecca and only befriended her near the end of her life. To further complicate matters, the revised will reportedly states it is a draft despite that it was signed by Rebecca. The attorney who prepared it claims Rebecca insisted on signing it immediately during a March 2008 meeting at the family collectibles store.

According to David’s children, Rebecca was an accepted member of the Derzon family and they had a good relationship with their father’s second wife. Still, the 2008 revision was not the first time Rebecca altered her will. In 2006, she amended it to lower the percentage of her estate that each son would inherit and included her half brother for the first time. Ironically, litigation over the will began when Rebecca’s half brother attempted to get a copy of several records from Rebecca’s attorney. Since Rebecca’s death, many court battles have ensued over relevant documents and other records.

In August, Milwaukee County Circuit Judge Jane Carroll will rule on whether Rebecca’s half sister exercised undue influence over the woman. The burden of proof, however, is on those challenging the will’s validity. The lengthy and expensive probate battle may have been avoided entirely if the couple had instead chosen to create a comprehensive estate plan.

Cases like this are some of the most heart-breaking parts of our practice at Krause Law Offices LLC. Challenging a will is an uphill battle, so it is important to get an estate plan right before it is too late.

At Krause Law Offices LLC, we often draft plans for couples or individuals in their second (or beyond) marriage. These plans often contain language that prohibits a surviving spouse from changing the distribution percentage after one spouse dies. Another technique is to plan the estate so that a portion goes into an irrevocable trust upon the first spouse’s death, and is preserved for that spouse’s children, while still providing income for the surviving spouse for a number of years, or for life.

The Role of Incapacity in Wisconsin Estate Planning

Because Wisconsin residents are living longer, their chances for becoming incapacitated before they die have increased dramatically in recent years. Recognizing the potential for incapacitation as part of your Wisconsin estate plan is important in order to avoid unnecessary legal battles and guardianship proceedings (sometimes called “living probate”).

If the capacity of an individual was unclear at the time their estate plan was created, the documents may be questioned either by those who seek to inherit, or by a probate court. Luckily, demonstrating the capacity to create a will or other planning document in is fairly easy and according to now codified Wisconsin case law, anyone who objects to a decedent’s testamentary capacity must do so “by clear, convincing, and satisfactory evidence.” Still, it is important to create your estate plan before an unexpected illness or incapacitation arises.

Today, most estate plans in Wisconsin will include a revocable living trust, a will, a power of attorney for both healthcare and finances, and a living will. A revocable living trust, financial power of attorney, and health care power of attorney will normally name someone else to take over decision-making in the event of the creator’s incapacity. In this way, a comprehensive estate plan preemptively provides for any potential impairment. Additionally, a thorough estate plan may spare your loved ones from going through the process of living probate.

Living probate in Wisconsin is a guardianship proceeding for your financial and healthcare matters. As with the probate process, living probate has the potential to be both lengthy and costly. A living probate proceeding will involve attorneys, doctors, and any interested persons who may be affected by an appointed guardian’s decisions. Should a loved one object to the appointment of a would-be guardian, the process will often be extended while the court determines whether an incapacitated person’s best interests would be served by the appointment. Ultimately, all decisions in a living probate proceeding will rest with the court. By creating a thorough and complete estate plan, you have the ability to select who will make decisions on your behalf and avoid the potential for a living probate proceeding. For assistance with creating your comprehensive estate plan, you should contact a capable Wisconsin probate attorney.

Scroll to Top