Want A Life Estate? Do it NOW

There has been a lot of discussion amongst ourselves here at Lubinski, Reed & Klass, S.C. and among other elder law attorneys, around the State as to how best advice our clients interested in planning for nursing home assistance in light of the changes to estate recovery in Wisconsin. How these new rules affect one of the more popular planning tools in medical assistance, life estates, has been a major topic.

The State of Wisconsin Department of Health Services has released a memo indicating that, amongst other things, life estates created ON OR AFTER August 1, 2014 would be subject to Estate Recovery.  Generally, this means that the State will value the life estate as of the date of death of the life estate holder and be reimbursed for the medical expenses it paid of behalf of that person and/or that person’s spouse up to the value of the life estate.  As the memo is written, this rule will not apply to life estates created before August 1, 2014.

There is a small window of opportunity for people that wish to make a gift of their home and retain the right to live there by using a life estate, without this new recovery rule applying.  There are still many unanswered questions regarding these estate recovery rules.  A life estate is not a good plan for everyone.  If you are interested in looking into this further, contact an experienced elder law attorney as soon as possible.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

Maybe Lawyers Aren’t So Useless After All

A question I get rather frequently is: “Can’t I just go online and do this myself?  Why should I pay you to draft my will?”  If you have this thought, I encourage you to read this article.

If you personally don’t understand the law regarding wills, and how precise language can completely change your intent, then printing a form off of the internet is a bad idea.  Saving money in attorney fees now can cost your loved ones much more in the future.  It pays to make sure that someone who knows how to draft a will does it correctly.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

 

Pregnant Texas Woman Kept Alive Against Her Wishes: Why You Need a Health Care POA

There is a very sad situation occurring in Texas.  A pregnant woman had a blood clot in her lung and collapsed.  The details are a little unclear, but according to the woman’s family, doctors are keeping her alive on life support against her wishes because she is pregnant.  As I said, it is unclear what her medical status is, if, as the family claims, she is actually in a persistent vegetative state.  It is also unclear if her wishes are in writing pursuant to a valid Health Care Power of Attorney (HCPOA) or simply oral.

What I can tell you is that the law being discussed in the article also exists in a similar form in Wisconsin.  Essentially, unless you have a valid, written, HCPOA that contains language that specifically allows your agent to make decisions for you when you are pregnant, a medical facility in Wisconsin cannot end life support.  A medical facility could potentially be prosecuted for death to an unborn child if they do.

Regardless of your opinion on the issue, you should discuss it with your attorney and have it properly drafted to meet your wises.  If you don’t, your life, and the life of your unborn child could be prolonged against your wishes.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

 

Do You Know Where Your Land Is Going When You Die?

Do you know how your jointly-held real estate is titled?  I think if I surveyed 100 clients, 90 of them would have no idea.  It is not uncommon that someone wouldn’t know the answer to the question, especially if they have not used an attorney in a real estate transaction before.  I can’t tell you how many times a client didn’t know that there was more than one way to hold title to jointly owned real estate.  Mostly, an option is never presented if an attorney is not handling the transaction.

If you own property with a spouse, real estate is typically owned as “survivorship marital property”.  This means that when one spouse dies, title passes to the survivor.  A simple form would be filed with the register of deeds in the county where the land is located to remove the decedent from the title.  This is fairly standard and obvious, and not really the point of this article.  The issues that occur in joint ownership occur when the owners are not married.

If you own real estate with a non-spouse, there are two ways in which property is typically held.  One is as “Tenants-in-Common”.  If two owners have own real estate as Tenants-in-Common, each owns an undivided one-half interest in the property.  When Owner A dies, his/her one-half interest will pass pursuant to his/her wishes (typically via will or intestacy).  The surviving owner, Owner B, will continue to own his/her one-half interest with the new owners owning the other one-half.

The second common way jointly owned real estate is typically held is “Joint Tenancy”.  Here, if there are two owners that hold property as joint tenants, when Owner A dies, his/her interest will pass to Owner B.  This is accomplished exactly like the survivorship marital property example above.

There are positives and negatives to these forms of ownership, and I have not addressed the majority of them in this post.  Be certain that you have a plan if you decide to purchase real estate with another person, especially if that person isn’t your spouse.  You need to know the consequences of your form ownership before it is too late.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

Sixteen Year Old + A Million Dollars = ???

To follow up on my earlier post about beneficiary designations, it is also extremely important to consider minor beneficiaries.  Do you really want your teenager to have unfettered access to your million dollar life insurance policy?  How about your pension?  IRA?

Making sure that your minor beneficiaries are taken care of financially after you pass away is not as simple as it might seem.  One step is to make certain there is something in your Will to protect your assets from your minor beneficiary until you believe they can handle it.  This can be done in a variety of ways, including, but not limited to: testamentary trusts or Uniform Transfer to Minors Act accounts.

Step two follows along with my earlier post on beneficiary designations.  As with adults, your Will does not control what happens to certain assets (i.e. life insurance, annuities, etc.) upon your death, unless the beneficiary is your Estate.  In order to make sure your assets pass to your minor beneficiaries in the best way possible, your attorney should review each individual policy or account to see how beneficiary designations are allowed.  Some accounts will allow a testamentary trust to be named as beneficiary, some require other language or methods to make sure the assets are protected.

Of course there are many methods by which your goals can be accomplished other than what has been mentioned in this post.  The best advice is to speak with your estate planning attorney.  If you have young children, or other minor beneficiaries that could inherit something from you, this is an area that needs to be addressed.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

Wisconsin’s New Medicaid Law: A Word of Caution

The latest state budget, signed into law in June, included a number of important changes to Wisconsin’s Medicaid Program.  Rather than totally reinventing the wheel, I want to provide a link to the excellent series of blog posts written by an attorney in southern Wisconsin, which explains various parts of the new law.

This a very complex topic, so most people who don’t have hands on experience with Medicaid are probably going to have a difficult time understanding why the law change is so important. I would like to leave you with this piece of advice: If you or your spouse, or your parents are on Medicaid, are in need of Medicaid now, or might need it in the future, it is vital that you contact an attorney who understands this area of law. There are new procedures in place that affect one’s ability to sell a home, which were not in place previously. In addition, the new Wisconsin laws seem to require that if a Medicaid applicant wants to transfer the family farm or other business to a family member, it must be done with a cash sale at fair market value, in order to pass muster. Doing things incorrectly can have even more wide-ranging and long lasting effects than before, so contacting an attorney who can deal with these issues has never been more important.  It is possible that much of this new law will be struck down if challenged in court, which will only further confuse planning in the future.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

 

What If I Don’t Have a Will?

A common question we get at our office is “What happens to my belongings if I don’t have a will?”  A large number of people don’t have wills either because they don’t believe they need one, don’t think they can afford to have one drafted, or are apathetic.

In Wisconsin, if you die without a proper will, you have died “Intestate”.  The rules of intestate succession are provided in Wisconsin Statute Sec. 852.01.  The most basic family situations have property flowing to the following classes of people, if they are alive at your death: 1) spouse/domestic partner, 2) issue, which is loosely defined as: children, grandchildren, great-grandchildren, etc., 3) parents, 4) siblings, and deceased siblings’ children (nieces and nephews), 5) grandparents (1/2 to maternal, 1/2 to paternal, or their surviving issue), 6) The State of Wisconsin school fund.

A few things are obvious from the above list: First, it is pretty unlikely that your property will escheat to the state (please note that escheat is not the same thing as owing the state money at your death.  The above progression is after all bills are paid).  Second, things get pretty complicated pretty quickly if there are few close relatives alive.  Sometimes finding these people is a tremendous challenge.

Another thing to realize is there are further complications in the statute when there are multiple marriages and multiple sets of children involved and someone dies intestate.  In this situation, the decedent’s spouse will only receive HALF of the decedent’s property (less some exceptions), while the other half would go to any issue that is not from the spouse.  This seems to be the most common situation where property passes unexpectedly, usually much to the chagrin of both the spouse and the children of both the surviving spouse and the other mother(s).  Many thousands of dollars are spent on attorney fees arguing about who gets what, when the situation could have been avoided with a relatively inexpensive will.

Keep in mind that these rules only apply to probate assets.  The probate/non-probate asset explanation is the subject of another post, but simply put, if you a direct beneficiary on something (life insurance, pension, annuity, 401(k)), these rules will usually not apply.

The bottom line is that it is better to be safe than sorry, especially given the variety of family situations in today’s world.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

Beneficiary Designations and Estate Planning

When we meet with clients to discuss their estate planning, we always ask about beneficiary designations on such things as life insurance and retirement accounts.  What most people don’t realize is that depending on how your assets are held, having these beneficiary designations set up correctly can be as important as having a will or other planning device.

Beneficiary designations allow assets to pass outside of the will, and outside of the reach of probate.  Whether this is good or bad depends on your individual circumstances.  What most people don’t realize is that unless the policy or account names your Estate as beneficiary at your death, what your will says is meaningless as to who receives the value of these policies or accounts.

Incorrect beneficiary designations can cause all sorts of problems after death.  Young children can inherit large sums of money.  Disabled individuals can inherit, and lose their disability benefits.  Beneficiary designations may name individuals that you no longer wish to inherit your estate.  Plans themselves may create odd situations if the named beneficiary is deceased.  These are just a few of many problems that could arise.

Beneficiary designations are very important to discuss when putting together your estate plan with your attorney.  Bring a list of your life insurance policies, IRAs, annuities, 401(k), Pension, etc. along with you to your appointment.  If you have copies of the actual policies, bring those as well.  It is too important to ignore the possible ramifications of these designations.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

Why You Should Hire an Attorney to Make Sure “The Nursing Home Doesn’t Get All Your Money”

 We do a lot of planning for clients who are concerned about “The nursing home getting all of their money.”  What these clients are concerned with is planning for Medicaid or Medical Assistance.  There are many ways that planning can be accomplished to make sure your heirs inherit your estate, rather than having those funds paid to a long-term care facility.  Even if you are very close to needing long term care, there are things that can be done to protect some of your assets.

Beyond planning, the application and qualification process for Medical Assistance is very confusing and complex.  Even though social workers and health and human service employees are very helpful and knowledgeable, they will not be able to help you in transferring and retaining the correct assets in order to qualify for aid.  In addition, if you do something wrong, and you forget to mention it, the penalties for lying can be serious.

This is an ever-changing area of law, and new rules are created all the time.  Also, everyone has a different individual situation, and this is a very complex area of law, so there isn’t much in the way of specific advice I can give you here.  The best advice I can give you is that if you are thinking about this: call someone who knows what they are doing!  Trying to navigate this by yourself, even if you are fairly sophisticated, can cause serious problems and leave you or a loved on in a financial and emotional lurch.

In closing, it is important to plan ahead, both through estate planning and when navigating through the application process.  It is not worth it to save money on attorney fees, only to make matters worse.  Especially when an average month in a nursing home is currently over $6,000.00 per month.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.

“But honey, you promised in writing…”

Couples are going to attorneys to draft “relationship contracts” to cover everything from vacations, to what happens when the lights go out.  It is an interesting concept, although I’m trying to wrap my mind around how having these things in writing helps, as the article suggests.  I want to be clear, and the article is as well, that many of the things suggested in the article that are contracted for are unenforceable in a court of law.  Next time your significant other denies they made any promises to you about something, pull out your contract.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, nothing contained in this communication was intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.  No one, without our express prior written permission, may use or refer to any tax advice in this communication in promoting, marketing, or recommending a partnership or other entity, investment plan or arrangement to any other party.