Appointing a guardian for your children is extremely important. It allows you to have a say in who will care for your child’s finances (a guardian of the estate) and who will care for your child’s daily needs (a guardian of the person.) If you do not choose a guardian yourself, it will be left up to the court to choose a guardian for your child, and your family will have to argue to the judge about who should receive the child.
For a checklist of possible topics to consider when choosing a guardian, please see the following link.
2. You have not given your spouse the right to manage your healthcare
In Wisconsin, the law does not allow spouses to make decisions on each other’s behalf without a power of attorney or court order that grants them permission to make healthcare decisions. To that end, it is extremely important that you take the simple step of executing a power of attorney for healthcare.
3. You have not given your spouse the right to manage your finances
If you become incompetent, or are otherwise injured and unable to manage your finances, your spouse will not have the legal right to manage some of your property without being authorized to do so by a power of attorney document or a guardianship. The types of situations that would be impacted include: sale of the home or sale of real estate in the name of both spouses, selling a vehicle titled using ‘and,’ filing taxes, managing a retirement account, and protecting the spouse’s right to property against estate recovery, just to name a few.
A power of attorney for finances can give your spouse the right to handle these situations.
4. You want to ease the burden of forcing your family to go through probate.
Probate can be a burdensome process. While it is feasible for a layman to work through the probate process, it can be confusing and time-consuming, particularly if the personal representative (the person you pick to deal with your estate) lives in a different state, as everything for the probate will have to be filed in the state in which you lived. The result is a process that can take, on average, between 4 and 9 months.
In the event that you need a lawyer to handle probate on your behalf, you can expect to pay on average between $1500 and $4000. To that end, it is suggested that you consider having an estate plan created that includes a revocable trust. Be sure, however, that you talk with a lawyer, who can give you guidance on how revocable trusts function.
5. You want to maximize how your assets could be used to pay for long-term care
Average nursing home costs are steadily rising. Currently, in southeastern Wisconsin, a shared-room in a nursing home costs a minimum of $100,000 per year. While you could spend down all of your money before finally asking the state for help in paying for your care, other options are available. One option is to make sure that you give your children the authority to place your money in a pooled trust, such as a WisPACT trust. This trust, authorized by the government, allows you to set aside your money when you are needing care in order to pay for things that Medicaid does not cover. While this is not the choice that everyone should make, it is important that you leave it as an option to yourself by giving your agent under your power of attorney the right to put your money in the trust if you need it. If you do not give your agent the authority, they will not be able to set up this trust for you without having a court give them the authority.
6. You want to leave assets to an individual with a disability
Leaving assets outright to an individual with a disability can put their access to public benefits at risk. It is extremely important that you talk to an attorney about how to best pass your money to that individual.
7. You want to ensure that your children will receive the maximum benefits from an inherited retirement account
If retirement accounts are not passed to your beneficiaries appropriately, they may be forced to take distributions from the trust over five years, which, dependent on the type of retirement account and their level of income, can cause them to pay larger amounts of tax on the distributions. When appropriately passed, a retirement account can allow the person receiving the account to take distributions over their lifetime, allowing the funds in the account to grow and avoiding paying higher income tax on the amounts.
8. You want to make sure that your children’s creditors will not have access to their inheritance
Nobody likes to think that their child will have issues with creditors or that they would get a divorce. An estate plan can help set up a trust so that your children’s creditors and spouses will not have access to their inheritance.
9. You want to make decisions now about what should happen if you are in a persistent vegetative state
If you want to choose what happens to you in the event that you are in a persistent vegetative state, a living will is a good idea. The living will allows you to make a few choices about life-sustaining measures while you are in a persistent vegetative state. Doctors will be required to follow these decisions, no matter what input anyone else gives them. The living will is a great option for those who do not have someone they trust to make decisions for them.
It is just as important, however, to make sure that you leave instructions with your agent for how you would like to be treated in the event you need different types of care. Therefore, as a part of your estate plan, be sure to tell your agent about your desires and leave a set of written instructions for them to follow.
10. You want to leave some money to support a church, cause, or other charity
If you do not create an estate plan, you will not have the opportunity to your assets to anyone other than your relatives. A good estate plan can allow you to leave your assets to make the impact you desire.
11. You want an affordable, individualized estate plan
After seeing the fees that other attorneys charge for estate planning services, and the failure of some attorneys to include important, individualized provisions for their clients, I am determined to give a chance for everyone to have a complete estate plan drafted.
Therefore, from today through September 30th, Attorney Derrick Heller-Neal is offering “Pay What You Can” estate planning services.
If you have had a child and do not have an estate plan, or if you know someone who has not had an estate plan for any reason, please contact me so that we can create one: no matter what you can pay.
Attorney Derrick B. Heller-Neal