Month: November 2013

Special Plans for Disabled Children: Estate Planning for Families with Children with Special Needs

Every family has its own unique set of needs and goals with relation to estate planning, and every family needs a plan. But in few cases is the need for doing careful, detailed advance planning greater than with families who have children with special needs. Due to both their needs, and the nature of government assistance benefits, the right kind of planning is essential to maximizing the special-needs child’s long-term well-being.

A recent article in the Green Bay Press Gazette tells the story of several families who have children with special needs. One of these families is the Larsens, who have two sons, Alex and Matthew, who have a rare condition known as Prader-Willi syndrome. Matthew has an average level of functionality for someone with the syndrome, which is typically means an IQ of around 70. Alex is higher functioning.

Fortunately for Alex and Matthew, their parents wisely engaged several aspects of advance planning for their sons. In 2005, the Larsens created wills that include supplemental needs trust provisions. These trusts can be essential for children with special needs. In many situations involving children with special needs, the child receives government assistance benefits from programs which are need-based. These benefits are especially vital for children like Matthew Larsen, who cannot live alone and who, once he leaves his parents’ home, will live in a group home.

Winds of Change: Wisconsin Legislature Weighing Overhaul to Trust Statutes

A bill that has passed the Wisconsin Senate and is currently pending before the Wisconsin Assembly would bring about the first major change to the state’s statutes governing trusts in more than four decades. The bill, known as Senate Bill 384, would, in large part, write the Uniform Trust Code (UTC) into Wisconsin law, bringing the state’s trust statutes into alignment with the roughly two dozen states who have already adopted the UTC in whole or in part.

Supporters of the bill told the Milwaukee Business Journal that replacing Wisconsin’s current statutes governing trusts with the UTC would offer many benefits. The new statutes would make it easier on Wisconsinites to do many tasks, ranging from amending an existing trust to setting up special trusts that have more recently come into wider usage, such as pet trusts.

The bill received bipartisan support in the Senate, passing by a vote of 32-1. Governor Scott Walker has stated his intent to sign the bill if it reaches his desk, according to the Journal. The proposed new statutes, which are modeled upon the National Conference of Commissioners on Uniform State Laws’ UTC, represent considerable input from several entities closely familiar with trusts, including the State Bar of Wisconsin and the Wisconsin Bankers Association.

No More Outright Distributions; Give Your Heirs Protected Assets

When your heirs receive their inheritance, will the gift be vulnerable to attack in bankruptcy, divorce or fortune-seeker’s lawsuit? It is not a myth: There really are people out there that wait for a person to inherit money, then prey on the beneficiary.

In most cases, when an estate is distributed, the heirs receive their gifts outright (directly to them in their name. This makes the assets vulnerable.

The good news is there is protection for your heirs if you use a Beneficiary Protection Trust. Instead of giving assets directly to heirs, the assets are put into a protective trust, then the trust is given to the heir. Because the trust is the legal owner, lawsuits against the heir cannot affect the trust.

The heir is also able to largely control distributions and exchange of assets in the trust, so there is no worry about the heir feeling they have no control. They are actually the trustee of their own trust, at least as long as there is no attack on the trust.

At the first sign of attack on the heir or the trust, the trust starts to lock down to preserve the assets. There are 3 successive levels of protection, depending on the severity of the attack.

Trust practitioners may be concerned that this type of trust can be defeated because of the doctrine of merger. When the trust beneficiary and the trustee are one and the same, the trust can be legally dissolved (Restatement 3d of Trusts §69). This problem is a concern when drafting these trusts, but as long as there is a contingent beneficiary (if the original heir dies) then the trust cannot be defeated by merger.

These trusts are not used by many estate planners in Wisconsin yet. We at Krause Law Offices LLC have licensed the language developed by the large California firm who helped to bring this type of distribution into common use there.

Always a Good Decision: Health Care Providers Join in Extolling the Benefits of Planning for Incapacity, End-of-Life Choices

Medical practitioners and social workers across Wisconsin have joined the chorus of estate planning attorneys throughout the state in hailing the advantages of planning for the possibility of mental incapacity and the certainty of death, and the important health care decisions that often must be made in these situations. Through proper planning and document execution, all Wisconsinites have the ability to assert control over the end-of-life care they receive, and who makes care decisions for them when they cannot.

At a recent conference, Honoring Choices Wisconsin received praise for its promotion of this type of planning, the Wisconsin State Journal reported. Honoring Choices Wisconsin is an initiative of the Wisconsin Medical Society, and based upon the Respecting Choices program started at the Gunderson Health System in LaCrosse two decades ago. The programs correctly explain that truly complete end-of-life and incapacity planning involves much more than just executing health care powers of attorney or living wills, although these are important tools.

Complete planning also involves a dialogue with your health care agent, so that you (and your agent) can feel confident that he/she understands what your preferences and desires regarding your care once you cannot make your own decisions. As John Maycroft, policy and strategic initiatives director with the Wisconsin Medical Society, told the Journal, “It’s about a conversation that helps equip your agent to make decisions for you if you’re in a position where you can’t speak for yourself.” Additionally, the medical society’s website noted that proper incapacity planning can also substantially improve the quality of your end-of-life care.

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