O'Flaherty Heim Birnbaum Kirchner & Curtis Ltd.

Estate Planning & Elder Law

Estate Planning

The overall objective in estate planning is to make sure all of your estate planning documents are integrated to achieve your goals pertaining to tax planning, distribution of your property, and probate matters.  The following estate planning tools and other matters such as long term care and tax planning are important.  Subspecialties include:

  • Guardianship or Conservatorship
  • Long Term Care Planning
  • Medicaid and Medical Assistance Planning and Divestment Issues

Wills and Probate

Personal representative is nominated to gather assets, pay debts and taxes, and distribute your property in accordance with your plan of disposition.

Wills may include a Testamentary Trust; Eg. Trust for a minor grandchild until they reach a certain age.  A trust set up in a Will and established by and supervised by the Probate Court following probate of the Will.  Annual accounts required.

What is “probate?”  Court supervision of administration of “probate” property in accordance with provisions of Will; time frame is 12 to 18 months and legal fees plus:

  • Inventory fee: .2% (eg. $500,000 = fee of $1,000)
  • Personal Representative fee: 2% (Eg. $500,000 = fee of $10,000)

Revocable Trusts

Primary purpose: substitute for a will to avoid probate.  Property held in trust is not property subject to probate and so no probate is needed to distribute such property.  No personal representative needed, no court administration or court fees.  Cheaper than probate.  No inventory fee.  No publication of Creditors notice.

Quicker than probate.  Trust can be settled in 30 days.

No public filings, so privacy of estate plan is maintained.

Successor trustee also acts when physical or mental incapacity occurs thus serving as a substitute for guardianship.  Very flexible estate planning vehicle.

Mechanics:  trust created by settler (or “grantor”), transfer property to trust, trustee manages property for the beneficiary, upon death of beneficiary the trust is wound up by a successor trustee who will, according to terms of the trust, distribute property, fund and manage a continuing trust for a spouse and/or other new trusts.  (Compare to Testamentary Trusts which require annual court filings.)

No loss of control of property because settler, trustee and beneficiary can all be the same person.  Is revocable and can be amended at any time.  Appropriate for small as well as large estates.  More difficult to contest than a will.  Joint Revocable Living Trust for married couples.  One Document instead of two wills for each spouse.

Pour-over Will – upon death this will directs a personal representative to transfer (“pours”) property upon death into the trust which was not transferred to the trust prior to death.

Tax Planning

Regardless of whether you have a will or living trust, a married couple can include a credit shelter (“bypass trust”) to reduce estate taxes.  “Gross estate:” includes probate and nonprobate property such as life insurance and all property in a living trust.  Federal Annual gift exclusion amount: 2010 $13,000.

Unified Credit applies to both gift taxes and estate taxes.  Federal Applicable Exclusion Amount in 2011: $1,000,000.  Unlimited Marital Deduction.

Credit Shelter Trust (“Bypass Trust” or “Family Trust”) – to receive the applicable exclusion amount so that estate tax reduced when second spouse dies.  The first spouse’s credit is not wasted.  Disclaimer mechanism is most flexible funding arrangement.

Advanced Techniques

  • Irrevocable Life Insurance Trust;
  • Generation Skipping Transfer Tax and Dynasty Trusts;
  • Family Limited Partnerships;
  • Business Succession Planning
  • QTIP Trust
  • Special Needs Trust

Durable Power of Attorney

  • Designated Agent manages finances and property if person is determined to be incompetent by a physician;
  • Durable or “Springing”
  • Estate planning powers (Eg. Gifting, transferring to trust, beneficiary changes for retirement plans
  • May nominate Agent as guardian if required.

Health Care Advanced Directive

Health Care Power of Attorney – appoints someone to make health care decisions on your behalf when you are incapacitated.  Can include instructions to your agent similar to living will.

Declaration to Physicians (Living Will) – directive to your medical provider to discontinue to use of artificial life-sustaining procedures when (1) terminal condition or (2) persistent vegetative state.

Marital Property Agreement

The State of Wisconsin adopted marital property which is similar to community property in 1985.  Marriage is recognized as a partnership with equal ownership of assets regardless of how the spouses may have their property titled.  Wisconsin law encourages spouses to have a Marital Property Agreement which classifies their property either as marital or in some cases certain property as individual property.

Elder Law

  • Guardianship or Conservatorship
  • Long Term Care Planning
  • Medicaid and Medical Assistance Planning and Divest
Estate Planning & Elder Law