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While you’re living and healthy, you value being able to make your own decisions about your finances, property, health care, and raising your children. Should you die or become incapacitated, you hope others will handle these matters for you according to your wishes.
The only way to assure that will happen is through estate planning. This process involves weighing various personal and financial decisions and creating legal arrangements to carry out those decisions. This brochure looks at key estate-planning tools: wills, living trusts, powers of attorney, and living wills.
What is a will?
A will is a written document that allows you to designate:
When should I write a will?
If you have accumulated some assets, and you care who will receive those assets after you die, it’s time to write a will.
Anyone with minor children definitely should have a will. In it, you can name the person you want to raise your children, should something happen to you and your spouse. Discuss this carefully with the prospective guardian, to be sure he or she is up to the job. Also, name an alternate guardian in your will as a backup.
On the other hand, if you’re a young adult, have no children, and own few possessions, you probably don’t need a will yet. The state would distribute your possessions to your parents. But if you’d rather leave your car to your girlfriend, or your prized Spider Man comic book collection to a favorite nephew, then a simple will is a good idea.
What if I die without a will?
In this case, the court appoints a personal representative who distributes your entire estate to your surviving spouse or registered domestic partner – unless you have children from outside your current marriage. In that case, your spouse or registered domestic partner retains half the marital property and receives half your individual property, with the rest of your estate split equally among all your children, from this marriage and outside it. (See also the State Bar of Wisconsin’s pamphlet, “Marital Property.”)
If you have no spouse, registered domestic partner, or surviving children or descendants of children when you die, your estate goes to other surviving relatives. State law lists the order of inheritance as follows: parents, brothers and sisters, nieces and nephews, grandparents, and descendants of grandparents. The state school fund receives your assets if you leave no heirs closer than the descendants of your grandparents.
If you leave behind minor children and have named no guardian in a will, a court must choose a guardian. Ask yourself: Is that a decision you want someone to make for you?
Having a judge decide who will raise your children can be emotionally wrenching for other family members. Also, court-supervised guardian-ships entail extra costs. Avoid the upset and expense by naming a guardian in your will.
Finally, bear in mind that if you have no will, the court will appoint a personal representative to administer your estate. Having a will allows you to choose this person. Also, you can stipulate in your will that the personal representative need not post a surety bond, thus saving money for your estate.
What types of property pass to your beneficiaries outside of a will?
If all your property falls into the above categories, and you have no minor children, you might think you have no need for a will. You may be right. On the other hand, a will may still be wise.
For example, you and your spouse, the other joint tenant, or your beneficiary could die at the same time or that person could die before you. A will would enable you to name alternate beneficiaries. Also, you could save on estate taxes, thus leaving more to your beneficiaries, by using a will to set up a trust.
What makes a will legal?
To be valid, your will must be in writing, and you must date and sign it. At least two witnesses also must sign the will. They can do this after they watch you sign it. If they weren’t present then, you can state to them that the signature is yours, and then the witnesses can sign. The witnesses should not be beneficiaries named in the will or your heirs as designated by law.
Can I write my own will?
Yes, if you comply with all the above-mentioned requirements to make your will valid. But if in creating your will, you encounter any questions or complexities you don’t understand, it’s a good idea to see your attorney. Remember, this document must spell out all the conditions for transferring your assets. And, if you have minor children, it names their guardian.
A will is an important document. You’ll want to be sure it correctly expresses your wishes and that it’s legally enforceable. A lawyer can give you advice about not only your will, but also other aspects of estate planning you might otherwise overlook. We’ll discuss some of those later.
How does someone challenge my will?
A person can attempt to prove in court that:
How can I change my will?
You have two options. You can simply write a new will, which automatically replaces an older one. Or you can add a supplement, called a codicil, to your existing will. For a codicil to be valid, it must satisfy the same legal requirements as those mentioned for a will.
Where should I keep my will?
Place your will where it’s safe from theft, fire, or other damage. A safe-deposit box is one possibility. You also may deposit it with the register in probate for your county.
Be sure your personal representative knows where your will is. Some people also give a copy to their personal representative. You’d want to do this, for instance, if you include funeral preferences in your will. Usually the reading of a will doesn’t happen until after a funeral. So you’d want your personal representative to have a copy on hand, to be able to carry out your funeral wishes.
Is a will written in another state legal in Wisconsin?
To be valid in Wisconsin, the will must comply with the laws of one of the following: Wisconsin, or the place where you properly signed your will, or the place where you lived when you properly signed your will.
Be aware, however, that Wisconsin has a marital property law and a same-sex domestic partnership law. If your will is from a jurisdiction with no such laws, you should have an attorney review your will. That way you can assure it still achieves the results you intend.
What is a trust created by a will?
You can use your will to create a trust upon your death. The trust holds your property for another person’s benefit. For example, a trust may provide an income for your spouse. Or it can hold property for your minor children until they become adults.
You name a trustee to oversee the trust. The trustee can be either a trusted individual (a friend, relative, or professional advisor) or a financial institution (a bank, brokerage firm, or trust company). The trustee is responsible for protecting the assets, paying out income earned, and terminating the trust as your will instructs.
What is a living trust?
You can create a living trust to control your property while you are alive. The trustee then would control your property after you die. Under this arrangement, you sign documents to give your property to the trust. As long as you’re living, the property usually is treated the same for tax purposes as if you still owned it.
An advantage of a living trust is that property can pass to heirs after you die without going through probate. A drawback is that buying, handling, or selling assets held in a living trust may be more cumbersome while you’re alive. Ask your attorney how a living trust would affect your property.
For more information, see the State Bar of Wisconsin’s pamphlet, “Revocable Living Trusts.”
If I have a living trust, do I still need a will?
Yes. A will would be important for several reasons. You may have property that never got transferred to your trust while you were alive. You would need a will to transfer that property to your trust after your death. Or your estate might receive money after your death. For instance, if your death was the result of an accident, your estate may receive wrongful death benefits. Again, you would need a will to transfer this money to the trust.
You also need a will in order to name a personal representative and a guardian for your minor children. That’s not part of setting up a living trust. A personal representative can take certain actions on behalf of your estate that a trustee cannot, such as pursuing a wrongful death claim.
What is a durable power of attorney?
This authorizes another person, called an agent, to act for you in financial matters. The agent’s rights to act on your behalf depend on what you say in your durable power of attorney document. These rights might include the authority to sign legal documents, pay bills, buy and sell real estate, and take other actions on your behalf. Choose a person you trust absolutely.
A durable power of attorney can take effect in one of two ways. If you wish, it can take effect immediately. Or you can provide that before the durable power of attorney takes effect, two physicians must state, in writing, that you are incapable of handling your affairs. The latter is called a “springing” durable power of attorney.
A durable power of attorney ends at your death. Your agent retains no further authority to handle your finances. If you want your agent to settle your financial affairs after you die, you need to name that person as your personal representative in your will.
What is a durable power of attorney for health care?
This arrangement gives your agent the authority to make health-care decisions for you when you’re unable to make them yourself. This is a heavy responsibility for anyone to assume. Be sure you discuss your health-care preferences with your agent, so he or she knows what you’d want. This makes the agent’s job much less difficult during what may already be a stressful time.
To create a durable power of attorney for health care, you can use the standard state form. Or, an attorney can create an individualized document for you. Either way, a durable power of attorney must meet specific requirements for it to be valid.
Can I have the same agent for both finances and health care?
Yes, one person can serve as both. If you feel you need to name two different agents, be sure they can work together. This would avoid a situation, for instance, in which your agent for finances could interfere with health-care decisions by refusing to pay certain medical bills.
What is a living will?
A living will is a separate legal document, not a part of your will. And, it’s not the same as a durable power of attorney for health care. The latter allows your agent to make health-care decisions for you. A living will, on the other hand, allows you to state in writing your preferences about life-prolonging medical treatment.
In a living will, you can declare that you wish medical professionals to withhold or withdraw life-sustaining procedures or non-orally ingested food and water – if you are in an incurable condition, or you’re near death, or you’re in a persistent vegetative state.
Your living will takes effect only when you become incapacitated, cannot speak for yourself, and there’s no hope for your recovery.
Your durable power of attorney agent also can make these sorts of end-of-life health-care decisions for you, if you grant that power. If you have both a living will and durable power of attorney for health care, the latter rules if there is any conflict between the two.
The current law regarding living wills went into effect Nov. 25, 1991. If your living will was written before then, you should have your attorney review it to be sure it still expresses your wishes.
Revocable Living Trusts
If you were to die or become disabled, you'd want your dependents to be financially secure. And you'd want someone to manage or distribute your assets just as you would yourself, if you could. The only way to assure these outcomes is to do estate planning.
A revocable living trust is one of several estate-planning tools. You can read about others in the State Bar of Wisconsin's pamphlet, Answering Your Legal Questions About Wills/Estate Planning.
Should a revocable living trust be part of your estate plan? No simple guidelines exist to answer that question. People with various levels of wealth and in different circumstances may, or may not, find a revocable living trust useful.
Your legal or financial adviser can help you decide whether this option is right for you. This pamphlet answers several questions to provide you basic information.
What is a revocable living trust?
A trust is a written agreement that names someone to be responsible for managing property for the benefit of others. A revocable living trust (also called a "living trust" or "revocable trust") is one type of trust.
It's a "living" trust because you create it while you're alive. It's "revocable" because, as long as you're mentally competent, you can change or end the trust at any time, for any reason. You need no one's permission to do so. In Wisconsin, a trust is revocable only if it states so in the trust agreement. Usually a living trust becomes irrevocable (not open to changes) when you die.
A trust involves three parties:
Who can be the trustee?
Any competent adult may be a trustee. Usually, you name yourself, or you and your spouse, as the trustee because you want full control of the property while you're alive. Many people, however, select a friend, relative, or qualified corporation (one to which the state has given trust powers) to serve as trustee.
If you choose one individual as a trustee, you also should name a successor trustee (a second person or a corporate trustee). This party can act if the first trustee dies or is unable or unwilling to continue as trustee.
Anyone you select as trustee should have the proper training and qualifications to carry out the trustee duties. These include managing the property, paying out income from the trust to beneficiaries, and distributing property to beneficiaries after you die.
Who can be a beneficiary?
When you set up a revocable living trust, you usually name yourself as the first beneficiary. If you're married, you might decide to name both you and your spouse as first beneficiaries. The trust also must specify who will receive your property after you die. This makes it clear to the trustee how you want your property distributed.
You need not put anything into the trust when you set it up. Some people put only a small dollar amount (say $10) into a trust initially. This is known as an "unfunded" trust. It's intended for future use, such as during old age or in case of disability. Until then the trust remains essentially empty, but it is in place if you wish to add more to it. In the meantime, you enjoy the benefits of not having your property tied up in a trust. You might use an unfunded trust as an alternative to a future guardianship or conservatorship.
When you decide to add substantial property to your trust, it becomes funded. From then on, the trustee has duties to perform. Some people put all or most of their property into the trust in the beginning. Others put in some property at first and add more from time to time – for instance, when a certificate of deposit matures. Still others set up a trust so that much of their property gets transferred only after they die. To accomplish this, you'd use a simple will called a pour-over will. It funds the trust with any property you didn’t put into the trust during your lifetime.
How does a revocable living trust differ from a will and a living will?
Both a will and a living trust enable you to provide for your beneficiaries and direct how your property will be distributed after you die. With a living trust, you turn over some or all of your property to the trustee to manage while you're alive. With a will, you keep your property and manage it yourself while you're alive. A living trust also lets you do something a will can't do: Spell out how you want your property managed if you become disabled during your lifetime. Finally, a living will is a completely different type of document. In it you state your preferences about life-prolonging medical treatment and procedures.
What can a revocable living trust do?
What can’t a revocable living trust do?
A revocable living trust:
Can there be court supervision of a revocable living trust?
Yes. Usually people prefer the informality of operating the trust without court supervision. But a trustee or beneficiary can ask a court to get involved. The court could review the trustee's decisions or supervise the trustee in accounting matters, property management, or general fairness issues.
Should I have an attorney prepare my trust?
Both an experienced attorney and a financial adviser can offer personalized advice. An attorney also can make sure the legal documents are prepared properly and fit your situation. Do-it-yourself kits and formbooks are available, but these tend to take a one-size-fits-all approach, rather than meeting your unique needs.
The do-it-yourself materials are cheaper than hiring an attorney. But if the trust isn't tailored to your needs or if the documents are poorly prepared, major problems and big costs may arise later. Often you'll come out ahead by paying more to have it done right in the first place.
What about "special offers" I see advertised?
Proceed with caution. Scam artists try to take advantage of older people's fears about what will happen to their estates. Some unscrupulous businesses sell revocable living trusts, even if unneeded, to gain access to your private financial information. Then they try to sell you other financial products.
Beware of anyone who calls to offer an in-home appointment to explain why a living trust is right for you. Immediately walk away from anyone who tries to pressure you into buying a trust. Take your time to be certain you're getting what you want and need.
If you have questions or complaints about a trust you purchased or were asked to purchase, contact the State Bar Consumer Protection Committee.
If you die without a valid Will, state law will control the distribution of your assets. This may not be what you want. The court will appoint a person, usually your spouse or next of kin, to administer your estate. Normally, in Wisconsin, this person is called a personal representative, and in other states this person may be called an administrator, or executor. Basically, the personal representative collects all of the assets of your estate, files an inventory of your assets with the court, notifies creditors, and pays proper claims against the estate. The personal representative also pays taxes and files tax returns, distributes the assets to the beneficiaries, and then makes a final report to the court.
It is important to note that non-probate property will not be controlled by your Will. Non-probate property will be distributed automatically to the person named as co-owner, or to a beneficiary named in a life insurance policy or a retirement plan, or an annuity, for example. Therefore, it is important to review the various assets that you own and how they are titled to make sure they are being distributed according to your wishes.
A Will allows you to control what happens to your property and enables you to designate a guardian for your minor children. If a minor child was an heir to your estate, and you did not have a Will, then the court would have to appoint a guardian for that minor child and the guardian would hold the money until the minor child reaches the age of eighteen. A Will allows you to create a trust to hold those assets and designate an older distribution age, such as twenty-five or thirty, or any other age you may desire, but still provide for their earlier needs according to your directions. If you have a disabled child, it is especially important that you have a specially drafted trust to meet the needs of your disabled child.
After you have had a Will drafted for you and it has been signed and properly witnessed, then you should store it in a safe place, such as a safe deposit box, or your safe at home, or with the local Probate Court, or wherever you keep your important documents. It is important to make sure that your family knows where your original Will is kept and that they can get at it after your death.
If an adult is mentally unable to manage their financial or personal affairs, then a court needs to appoint a guardian to handle the affairs for that adult. At times, obtaining a guardian can be an expensive process. In addition, the court may appoint someone you would not want to handle your financial or personal affairs. However, if you have a Durable Power of Attorney for finances, or a Durable Power of Attorney for Health Care, you are able to appoint someone you trust to manage your financial affairs and to make your health care decisions. By appointing a competent and reliable person as your agent, it may prevent the court from having to appoint a guardian for you. The Financial Power of Attorney document can give the agent power starting the moment you sign the document, or it can spring into effect only after a doctor states that you are no longer able to handle your financial affairs. A financial power of attorney needs to be a “durable” power of attorney so that it will continue even after you become incompetent. It is very important that you give serious thought to who you are going to name as your financial agent because they will have complete control over your assets. On many occasions, an agent has acted improperly and taken the money of the person who entrusted them with the duty of handling their financial affairs as they have the power to act without court consent or review unless someone brings them before the court.
The health care power of attorney document is a very important document because if two doctors state that you are no longer able to make healthcare decisions for yourself, it gives your named agent the power to make all health care decisions for you, including the power to place you in a nursing home or community based residential facility, if you grant them the power to do so. It also give them the power to discontinue tube feeding if you allow them to do so. It is recommended that you add some language into the health care power of attorney document regarding your end of life wishes. If you have a health care power of attorney document which states your end of life wishes, then it may not be necessary for you to also have a “Living Will”. If you do not have a health care power of attorney, or if you do not grant your agent power to place you in a nursing home, then it would be necessary to obtain a guardianship for you, if it was determined that you were unable to make your own health care decisions and/or if it became necessary for you to be placed in a nursing home and that specific power was not given to the agent in the health care power of attorney document.
Other, more advanced estate planning tools include a living, or revocable trust. A living or revocable trust is established and maintained during the grantor’s lifetime and may be changed or terminated during that time. Oftentimes, a revocable or living trust is used to avoid probate. By creating a trust, the grantor transfers control of the assets to a trustee. In the case of a revocable trust, the trustee may be the grantor. The specific powers and duties of the trustee and when the trust income and principal may be distributed to the beneficiaries are determined when the trust is initially drafted. In some instances, you may want a trust to be created to reduce the amount of federal or state estate taxes which may be due at the time of your death. An irrevocable trust can also be created to transfer assets out of an individual’s estate such as an irrevocable life insurance trust. In addition, a married couple may need a marital property agreement to equalize their estates which may also save estate taxes upon the death of the second spouse. Second marriages can provide a need for special planning to avoid disinheritance of children from the first marriage and still provide for the second spouse.
In conclusion, every adult should consider having basic estate planning documents put in place for them which, at a minimum, should include a Will, health care power of attorney document and a financial power of attorney document. It is advisable that an attorney be consulted when putting these documents together so that your wishes are followed and the documents are properly drafted and signed. When calling for assistance in regard to these documents, a client should not be shy about requesting how an attorney charges for these services and what the approximate cost will be for these documents.
Martinson Law Offices is dedicated to the highest level of service and professionalism in handling family law matters. We use specialization and depth of experience to benefit our clients.
The attorneys at Martinson Law Offices have over 50 years of combined experience in various areas of law.
Clients have personal contact with Martinson attorneys from start to finish of your case. We will not hand you off to a legal assistant!
The attorneys at Martinson Law Offices have built their firm on honesty and trust. Rest assured that your private information stays with us.
Jeffrey J. Martinson graduated with honors from De Pere High School. He earned a Bachelor of Business Administration degree from UW-Madison Business School in 1986 and graduated Cum Laude from the UW-Madison Law School in 1989. Jeff is the owner of Martinson Law Offices and has been in practice since 1989.
Martinson Law Offices is a civil law practice. Martinson Law Offices has served the area since the mid-1960s. Jeff’s practice includes numerous estate planning matters, probate matters and family law cases. Jeff has served as a court-appointed Guardian ad Litem in many areas of law, including probate, paternity, family, juvenile and guardianship matters.
Jeff is a member of the Wisconsin Bar Association and the Brown County Bar Association. He has also been admitted to practice law in the United States District Court, Eastern and Western Districts of Wisconsin. He is a past president and member of the Calvary Lutheran Church council and has served as president and member of the Bay Area Lutheran Homes, Inc. Board of Directors. He serves on the Board of Directors for The Center for Childhood Safety, Inc. Jeff is a member of the Estate Planning Council of Northeast Wisconsin and serves on its Board of Directors. He has also served as an adjunct instructor for the Paralegal Program at NWTC in Green Bay. Jeff volunteers at the Aging and Disability Resource Center in Green Bay and participated as a judge in the county’s Teen Court program.
John E. Martinson received his Bachelors Degree from UW-Madison in Economics and Psychology in 1956. He attended law school at UW-Madison and graduated in 1958.
John is a member of the Wisconsin Bar Association and is admitted to practice law in the United States District Court, Eastern and Western Districts of Wisconsin.
John is semi-retired and is "of counsel".