Uncategorized

Wills and Estates: There’s A Reason Why Laws Exist

Wills
When it comes to wills, trusts, and estate plans, the formalities really do matter.

A man executes a will leaving his property to three people. Later, he executes a new will removing one of the heirs. Finally, he executes a third will, leaving his property to the original three people but doesn’t get the will witnessed. Which of these three wills is in control?

If this question sounds like something from a lawyer’s bar exam, that would be about right. It sounds like the first will should be in control, since his intentions were made clear in the first will, even if it was not executed correctly. This was explained by nwi.com in the article “Estate Planning: Will formalities are important.” However, there are many different factors that go into determining which of these three wills should be the one that the court accepts. This is a good illustration of why a will should be prepared with the help of an estate planning attorney.

First, is the third will valid? If there were no witnesses, it seems very clear that it is not. Except for very unusual circumstances, a will is only valid if it is in writing, signed by the person who is its “creator,” which is the “testator,” and witnessed by not one , but two witnesses.

The next question is, how about that second will? Is it valid? Was the second will revoked, when the third was created, even though it was not properly executed?

There are two basic ways to revoke a will: physical destruction or written instrument. If the will was not destroyed, then the revocation of the second is considered to have occurred by the creation of the third will. Most wills contain a recital revoking all previous wills and codicils, which serves as a written revocation.

However, there’s a problem. Because the third will is most likely void, then it could not have revoked the second will. Will revocations also need to be witnessed, and since the third will was not witnessed, the recital contained in the third will revoking the prior wills is also void.

It, therefore, seems that the second will is valid in this situation. We say it seems, because there may be other factors that might also make the second will invalid: we don’t have all the facts.

The lesson from this article is that when it comes to wills, trusts and estate plans, the formalities really do matter. Procedures and formalities are considered more important than intent.

Another story that illustrates that point comes from an attorney who was involved in an estate matter where the person who made the will tried to take out several beneficiaries, by taking a razor blade to the document and physically removing their names from the will. The estate battle began after he died. The intention was clear—to remove the beneficiaries from the will. However, because the proper formalities were not followed, the beneficiaries were not properly removed from the will and they received their bequests after all.

If you have a will and estate plan and you wish to make changes to it, sit down with one of our Madison area estate planning attorneys to discuss the changes you want to make, and have the documents properly revised, following all the required steps. Don’t try to do this yourself: your wishes may not be followed otherwise.

Reference: nwi.com (March 10, 2019) “Estate Planning: Will formalities are important”

New Year’s Resolutions: Start With Your Estate Plan

Recent studies show that about half of Americans still make resolutions, but fewer than 10% of us are successful in maintaining them, says The Sentinel in “Elder Care: New Year’s resolutions.” This year, try making your resolutions simpler and more time-sensitive, and maybe you’ll have more luck maintaining them. Start with your estate plan. A call to our estate planning attorneys to make an appointment won’t take a lot of time, and it will get the process started.

Getting your estate plan in order in 2019 will prevent your family from unnecessary stress and costs in the future. Here are a few examples of what can happen to families who don’t plan properly.

A married couple owns a home and some investments. To protect their assets, they create a Revocable Living Trust and transfer all their assets into the trust. They believed that by doing so, they’ll avoid probate and preserve assets from long-term care costs. However, while a revocable trust can avoid probate, if properly created and funded, it has limited other benefits.

When the husband needed nursing care, the couple was surprised to learn that putting their largest asset—their primary residence—in a revocable trust resulted in a situation where the home was counted as an asset for Medical Assistance to pay for care.

As Wisconsin residents, their principal residence may be excluded for consideration for eligibility—if certain conditions are met. However, federal law specifically directs that real estate in a revocable trust is a countable resource. Had they placed the residence in an Irrevocable Asset Protection Trust five years prior, or even kept the residence out of a trust, they would have had more options.

Not having a will is never a good idea. A local musician had a successful career that resulted in him having a good deal of wealth. He had a son from his first marriage and when his son was born, he told his wife that he wanted his assets to pass to his wife upon his death. If she died before him, he wanted his assets to go to his son. However, he never had a will made.

The first marriage ended in divorce, and he became estranged from his son. He had a daughter with a new partner and planned to leave everything to his new partner. If she passed before him, he intended to leave everything to his daughter. However, once again, he failed to have a will made.

With no will, state law governs who receives his assets. In the musician’s case, assets pass in the following order:

  1. Surviving Spouse
  2. Children
  3. Parents
  4. Siblings
  5. Issue of Siblings
  6. Grandparents
  7. Uncles and Aunts
  8. Cousins
  9. The State of Wisconsin

Notice that none of these is his current partner. The only way she could have inherited his assets would have been for him to have a will. While he had told his partner that he did not want his son to get anything, under his state’s law, his assets are to be split equally between his children.

With an estate that included songs that were copyrighted, both of his children (and any individuals claiming to be his children), may receive income streams. The court must first determine who his legal children are before any assets can be distributed. A will would have prevented this entire mess.

These are just two examples of what happens when planning is not done correctly, or not at all. Make it one of your New Year’s resolutions to call your estate planning attorney.


Reference: The Sentinel (Jan. 4, 2019) “Elder Care: New Year’s resolutions”

How Do I Calculate My Estate Taxes?

Most people are aware that estate taxes are owed on asset transference, but people tend to be foggy on the details, until it’s too late to do anything about it.

Handling the affairs of a loved one’s estate can be stressful and difficult. However, to receive the full benefit of the gift a loved one leaves you, it’s critical to be prepared for the taxes that gift will incur. This is the advice in Investopedia’s article, “Estate Taxes: How to Calculate Them.” The article explains the potential tax liability, upon transfer of an estate after death. …

Retirement Savings: Ahead of the Curve or Behind the Eight Ball?

Are you saving enough for retirement, asks US News & World Report in the article “Are Your Retirement Savings Ahead of the Curve?” Maybe the better question to ask is more specific: How much income do you think you’ll need to replace your salary to pay for your chosen retirement lifestyle? Remember that even when you are not working, you’ll still need to cover healthcare costs, car replacements, home repairs and the everyday expenses that add up quickly.

Here are some important points to help you as you plan for retirement income: …

Are You Sure You Want THAT in the Cloud?

There are some clear benefits to storing your will and documents online. You and your spouse (or other authorized people) can access them anytime, from anywhere. We are used to putting our lives online.  However, there are also some downsides to consider before doing so, according to a helpful article from CNBC titled “Here’s what you need to know before storing your will online.”

It’s good to have all your important documents in one place. Make sure that the people who will need access, such as executors, know that you’ve done so or the cloud storage may well be pointless.

Online storage can also facilitate family conversations about estate planning. Even tech savvy adult children who scoff at parents who don’t engage in social media, will be impressed by a decision to go digital.

However, there are pitfalls. …

VA Pension Planning – Wartime Veterans Pension

The Veterans Administration has a program for wartime veterans and their widowed spouses to guarantee a minimum income for veterans or widow(er)s who qualify. If a veteran is 65 or older or is permanently or totally disabled for a reason or reasons that are unrelated to their military service and their income is below certain threshold they may be eligible to receive this VA pension benefit.

There are 3 levels of benefit, Basic, Housebound, and Aid & Attendance. …

Protecting Assets When Parent Already in the Nursing Home

I met today with the children of a woman who is presently residing in a Madison nursing home due to her dementia diagnosis. The children had no idea how long term care and Medicaid financing for long term worked.

They told me that Mom owned a home, three annuities, some cash in the bank, and expensive jewelry and antiques. Their financial advisor referred them to my office. I asked them what they knew about long term care and Medicaid. They said they were starting to “hear things” but they wanted to get the truth.

I told them that if all of the assets stayed in their mother’s name, then their mother would be forced to spend her $475,000 of financial assets until she had less than $2,000 remaining. They told me that their mother was spending about $8,000 per month currently on her care. I also told them that – if Mom keeps everything in her name – then after Mom spends all of her finances, she will qualify for Medicaid, but then Medicaid will have the right to enforce its Medicaid Estate Recovery rights after Mom dies, forcing the house to sold after Mom dies to reimburse Medicaid for what they spent on Mom’s care after Mom spent all of her own money.

Since the timing of your legal planning to avoid losing assets to nursing home expenses is so critical, we are not going to be able to save as much for them as we would for those who are more pro-active and engage the right legal help when they are still healthy.

The children will be back in the office next week to sign a slew of legal documents to ensure that they will save and protect about $300,000 of Mom’s assets from losing it to the nursing home. While we weren’t able to save everything because this planning started while Mom was already in the nursing home, we are going to be able to save hundreds of thousands for this family – even if Mom resides in the nursing home for many, many years.

The estate lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.

Contact our office by calling (608) 268-5751 to schedule a consultation or use our online contact form.

Consequences Of Failing To Address The Nursing Home and “Medicaid Planning” Issue

One of the biggest problems that senior citizens ages 65 and older face is that they are frustrated by the fact that they have worked hard and sacrificed to save a nest egg for their later years only to face the possibility that they could lose everything to a long term care medical need, while others who spend and don’t worry about their finances can rely on government assistance to pay for all of their skilled nursing home costs

Sometimes older parents and grandparents even wake up in the middle of the night worrying about how much their children will struggle to have to provide care for their aging parents while the children watch the family finances go down the drain.

Does A Retirement Plan Pass Through Probate? Part One.

No, it does not. It transfers by beneficiary designation. Much like life insurance that goes to the individual named in the policy, the retirement plan goes to the individual named on the beneficiary designation in the plan document. If you don’t have a beneficiary designated or the individual that you designated is deceased, the account value can wind up in your probate estate; and if this happens, the only choice is that all the taxes are due right away, and there is significant inflexibility. But in general, it will avoid probate.

The Legacy You Leave Online

With the new age of digital everything, comes a new problem that anyone that has social profiles needs to plan for. What will happen to your digital accounts when you die?

Here are what some of the major online providers have set up for these circumstances.

Google
Google doesn’t have a specification on who can manage your account, but what they do have is a provision that allows Google to contact whomever you have set up if you do not log in to your account for a specific period of time. You simply add the contacts to your Google profile. You are also given a choice to have all of your accounts deleted after a period of time. As with all things Google, they make it very easy for you to set up and understand. From your Google account, you go into Settings> Account> Inactive. It allows you to set the amount of time you want your account to remain inactive before they notify anyone and you can add email addresses of up to 10 people for them to contact.

Facebook
Facebook allows you to set up a legacy contact. This person will be the person that maintains control of your account after you die.

Twitter
Twitter only allows a family member to deactivate your account after you die. They do not give anyone access to your account information or allow someone to take over the account on your behalf.

Instagram
Instagram does not set up a legacy contact, but they will memorialize your account for you after you die. This means all pictures stay up and your profile stays visible to your followers.

Microsoft
Microsoft has a process in place for this situation. Your family member will need to contact Microsoft and ask about the Next of Kin procedure. After approving and determining that this is your next of kin, Microsoft will send a DVD to the person with all of your account data and documents.

There are no platforms that will allow anyone to maintain complete control over your accounts once you pass. If you want someone to have total access to your accounts, to post on your behalf or manage anything within that account, the best thing to do is give the people or person you wish to do this a list of your passwords for the accounts you want them to have access to.

The estate lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.

Contact our office by calling (608) 268-5751 to schedule a consultation or use our online contact form.

Scroll to Top