Month: October 2013

It’s Not Too Late: Estate Planning and End-Stage Terminal Illness

It is perhaps the most traumatic and stressful news a person can receive: you or a loved one has been diagnosed with a terminal illness and only has an extremely short time to live. In these situations, you may think of hundreds of things that need to be done, and estate planning may not be one of them. You may assume that it is too late. Do not make this mistake. If you are alive and mentally competent, you owe it to yourself to investigate creating a plan.

One of the first things you should do is consult a qualified estate planning attorney. Your attorney will ask certain questions to deduce whether you or your loved one has the necessary mental capacity required by the law to make or change an estate plan. Should someone question your plan later, your attorney may be able to provide information that tends to show that you were competent at the time of the plan’s creation or amendment. Additionally, written documents from doctors attesting to competency may also prove beneficial.

This documentation is especially helpful if you think someone may later file a court challenge contesting capacity. Even if you don’t anticipate problems occurring, this paperwork is all very important because any estate plan created or changed shortly before death has a heightened risk of facing a court challenge to its validity, even if everyone seems to get along and you are clearly competent. That should not dissuade you from getting a plan; it just means going the extra mile to ensure a wealth of written proof exists to show that you were competent.

Zero Carbon Footprint! We are Proud to Give Back

Krause Law Offices LLC is carbon neutral. Actually, we have reduced our carbon output (through purchasing offsets) so that we are making up for others’ carbon use.

Through our partnership with, we have purchased carbon offsets to make up for our use of electricity, airline flights, and even our employees’ commutes to work! Combined with our commitment to use only 100% post-consumer recycled paper for our clients’ documents, we hope to keep our world nice for those who will come later.

We spend our days helping clients transition wealth to future generations through trusts and other planning. It is only proper for us to do whatever we can to leave a beautiful place for them to enjoy that wealth. What is more valuable than a healthy environment in which to live?

Please consider becoming carbon neutral.

Krause Law Offices LLC

How Many Passwords Do You Have? If Something Happens to You, What Happens To Them?

Many sources, including the Wall Street Journal, have recently devoted space to covering issues related to estate planning and online accounts. While it is essential to ensure that your estate plan addresses how to deal with your web-based financial accounts, such as your checking account, retirement account or Paypal, having a truly complete digital estate plan involves much more than just handing down passwords. It means ensuring that your loved ones have access to a variety of online resources that, while easily overlooked, may contain a wealth of items with substantial sentimental or economic value.

As we’ve discussed here before, having a digital estate plan is essential to allow a trusted relative, friend or professional to access your online accounts. In this way, they can retrieve or destroy (according to your stated wishes) your online personal effects like digital photographs or documents, or retrieve your online financial information.

You, as the client, hold one of the biggest keys to ensuring that you and your attorney can craft a truly comprehensive digital estate plan for you. That key is to maintain a list, whether paper or electronic, of all your electronic assets and the access information for each item, including usernames, passwords and security questions and answers.

How Long Since You Looked at Your Will or Trust? If You Haven’t Recently, You May Want To

Most estate planning professionals will tell you that one of the biggest mistakes you can make is failing to update your estate plan. That’s because if you die with an estate plan that is not up-to-date, your plan likely won’t function the way you wanted, and may leave out beneficiaries you wished to remember, or provide an inheritance to someone you did not want to receive one, as we’ve talked about on this blog here before.

Perhaps the most obvious circumstance where you would want to update your estate plan is when a beneficiary dies. If the death is to a child, and you wish his/her children to receive that share, your existing plan may already cover that. But say that you left a significant amount to a beloved cousin, a trusted friend, or even perhaps a second spouse you married later in life, who has children with whom you have no blood relationship. You probably will want to consider updating your plan to make certain that all of your assets go to your loved ones, not people who you may not even know, who simply share a kinship with your loved one.

Birth may also trigger the need for an estate plan update. For example, if your plan leaves a specific amount to each grandchild, and one of your children welcomes a new addition to his/her family, an update may be in order. This update may simply name this new baby as a grandchild and indicate his/her inclusion in the grandchildren’s inheritances, or you may need to consider reducing the amount you leave each grandchild, now that there are more of them.

Focus on Minor Children: An Estate Plan Can Keep them Sheltered (and send them to college)

It may come as a surprise to you that more than half of all parents have no estate plan in place — not even a basic will. As your family celebrates the wonderful aspects of their lives, it may seem like an awkward or remote time to focus on an untimely death or incapacity. But, with so much at stake, one of the most responsible things new parents can do is make sure that their estate plans are in order to ensure that, in the event of the unthinkable, their children will receive the sort of care they would want.

One of the vital benefits of your estate plan if you have minor or disabled children is the option to nominate a guardian. If you have discussed with trusted relatives or friends their willingness to care for your children if tragedy were to befall you (or you and your spouse), nominating a guardian in your will allows you to communicate this to the courts. In Wisconsin, the court will appoint the guardian you name in a will unless it is not in the best interest of the child.

Additionally, your estate plan gives you the chance to control how your children receive their inheritance. Perhaps you plan to leave your children a substantial amount of wealth upon your death, but you are concerned about your child or children assuming complete control over the full amount immediately upon their eighteenth birthdays. With detailed planning, you can avoid that scenario. You can create a living trust that continues to hold your children’s wealth until the dates you prescribe. Until that time, the trustee of the trust manages the assets for your children.

You can also provide money and incentives for your children to go to college. There are many ways to write trusts that encourage beneficiaries to make certain choices in their lives, and to achieve certain milestones.

How Do You Own Real Estate? Let Me Count the Ways.

Wisconsin law defines a number of ways an individual can own and distribute real estate. Each method offers its own unique set of advantages, and may be more or less valuable to you depending on your circumstances. Having a basic understanding of these may offer real value to you in deciding whether to keep or change the current ownership structure of your property.

Some ways are: fee simple, joint tenants with rights of survivorship, joint marital property, tenants in common, life estate, mineral rights, easement, in trust, for a term of years, ground lease, and they go on.

One well-known method is joint tenancy with right of survivorship. Under this arrangement, each co-owner possesses an equal share of the property and, upon the death of either co-owner, the other takes full ownership of the property automatically. On the “plus side,” this arrangement is simple, low maintenance and, in most situations, effective for avoiding probate (on that property). This arrangement also has downsides, in that the property may be at risk of litigation by the creditors of either co-owner and a risk exists with regard to accidental disinheritance of some family members, particularly children of a previous marriage.

Many people own real estate as “tenants in common.” This means that they all share in ownership of the property like joint tenants, but if one of them dies, their share does not go to the other owner(s). The dead person’s share is transferred according to that person’s estate plan (will or intestate succession).

Another method available is the transfer-on-death deed. A transfer-on-death deed allows you to name a beneficiary who takes ownership of the property upon your death, but has no present ownership interest in the property. This means that you retain full control of the property during your lifetime, and you can change (or even revoke) the beneficiary designation as often as you want as long as you are alive and competent. This method also generally avoids probate. Similar to the joint tenancy with right of survivorship, transfer-on-death deeds can sometimes lead to unintentional disinheritances, especially if you change your will or trust but overlook making a companion change to your transfer-on-death deed. Additionally, the beneficiary has no legal authority until you die. So, if you become mentally incapacitated, and you have no durable power of attorney for finances, you will need a guardianship established so that someone may continue to manage your property for you.

Beware your Uncle’s Newfound ‘Friends’ – Some People Make a Fortune from Elders

Guardianship proceedings can be time-consuming, financially draining and emotionally exhausting. But should they always be avoided at all costs? Not necessarily. In many cases, a well-drafted estate plan, with detailed powers of attorney governing your financial and health-care matters, is entirely sufficient to meet your needs, leaving a court procedure unnecessary after your passing. In some cases, though, a guardianship or conservatorship can offer unique and essential benefits, especially when the subject is potentially under the undue influence of another.

Take the case of elderly Milwaukee County farmer Gerald Mahr, as reported by the Milwaukee Journal Sentinel. Mahr passed away in 2011, but several relatives and other loved ones headed to court this summer to contest the man’s will, which left nearly all of his estate to a carpenter who had befriended the man several years ago. The would-be heirs claimed that the carpenter exerted undue influence over the farmer and fleeced him into changing his estate plan.

Powers of attorney have many advantages. One potential advantage for many people is that they are usually easy to change or replace. This may serve as a disadvantage if a person falls under the sway of someone exerting undue influence over them. That person may take over as agent under a financial power of attorney, and potentially assume broad control over the person’s entire wealth. Mahr had powers of attorney but changed them, along with the terms of his will, five times between 1999 and 2009, with each new will allegedly offering a larger distribution to the carpenter.

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