What is an “estate”?
An “estate” is simply everything that you own – your home, bank accounts, retirement accounts, investment accounts, life insurance, personal property, vehicles, etc.
So, is “estate planning” just planning for my stuff?
No, estate planning is the process of planning for your incapacity and death, taking into account your assets, so that the decisions you would want made for yourself, your loved ones, and your stuff continue to be made even if YOU aren’t the one making them.
Who needs an estate plan?
Everyone can benefit from an estate plan because we are all susceptible to incapacity, and we will all pass away one day. The differences are in the types of estate plans that may be needed based on your particular circumstances, family dynamic, asset portfolio, health scenario, and whether guardianship/probate court avoidance is a goal.
How often should I update my estate plan?
You should review your estate plan every 3-5 years or after significant life events, such as marriage, divorce, having children, or changes in Wisconsin laws.
I have a will, isn’t that all I need?
A will is a document that serves a very specific purpose – to guide the probate court in how to distribute your probate assets at your death. In Wisconsin, if you have assets in your individual name, which do not have a beneficiary form, and those assets collectively exceed $50,000, your will must be admitted to probate for a probate administration in order to get those assets to your beneficiaries. Your will tells the court who you nominate to be your personal representative, who you nominate to be guardian of any minor children, and who you would like to receive your probate assets after your debts, expenses, and taxes have been satisfied. Your will has no force or effect on assets that transfer to beneficiaries by other means such as jointly held assets, or assets with completed beneficiary forms, even if there is a provision in your will directing that asset to someone specific. Also, it is important to note that your will is not applicable during periods of your incapacity.
My neighbor has a trust, what is that?
Trusts serve a variety of purposes in the estate planning realm. Trusts allow us to divide the idea of ownership into the component parts of control, management, and enjoyment. The main type of trust used for core estate planning is a revocable living trust. This type of trust is created during a person’s life, and he/she can revoke, amend, or modify it at any time. It is a will replacement tool, and also allows for some incapacity planning. The key to an effective trust, however, is that assets must be properly aligned with the trust, meaning either titled in the name of the trust, or directed to the trust by beneficiary form. To the extent the assets are properly coordinated with the revocable living trust, probate is avoided and generally a more efficient post-death administration process is accomplished.
It is important to note that there are a variety of irrevocable trusts that are used for advanced planning purposes such as nursing home planning and advanced estate and gift tax planning. Revocable trusts do not add protections for nursing home planning purposes, but may include some advanced estate tax planning for married couples.
What happens if I die without a will in Wisconsin?
If you pass away without a will, the State of Wisconsin has default statutory will for you, which may or may not align with your wishes, and the probate court will administer your estate through an intestate probate process. This is often the least efficient, most expensive post-death administration process for families and beneficiaries.
What is a financial power of attorney?
A Financial Power of Attorney (POA) allows you to appoint someone to make financial and life management decisions on your behalf if you’re unable to do so.
What are health care directives or advanced directives?
Health care directives, also known as advanced directives, name who you would like to make your medical decisions when you can’t, who is allowed to speak with your medical team about your care, outline your healthcare preferences if you’re unable to communicate them, provide your wishes regarding end of life care, name who signs to release your body for funeral and burial, and provide your burial/cremation and funeral preferences. In Wisconsin, your Health Care Directives may include a Health Care Power of Attorney, Living Will, HIPAA Authorization, and Authorization for Final Disposition.
I filled out health care documents at my doctor’s office, isn’t that all I need?
Many health care providers have basic statutory forms that you can complete if you have not done any estate planning. These documents are often limited to just a basic Health Care Power of Attorney, Living Will, and HIPPA Authorization. Many estate planning attorneys consider these statutory forms the minimum standard for what one should have for medical purposes, rather than the recommended and preferred standard.