What Does Per Stirpes Mean?

What Does Per Stirpes Mean?

by | Apr 30, 2025 | 2025, Article, Estate Planning

If you have ever completed a beneficiary designation for a life insurance policy or retirement account, you may have encountered the term “per stirpes” and wondered what exactly it meant. Per stirpes is a Latin phrase that means “by branch” or “by roots.” In estate planning—like in wills, trusts, or beneficiary designations – it is used to explain how your assets should be passed on if the person you chose as your beneficiary dies before you. When considering whether you wish to incorporate the term “per stirpes” into your estate planning, it is important that you understand the effect the term has on the distribution of your assets upon death.

Wisconsin statute. § 854.04 defines the term “per stirpes”, as well as other phrases that may be used to incorporate the same distribution pattern. If your will, trust or beneficiary designation calls for property to be distributed to the descendants of a designated person “by representation,” “by right of representation,” or “per stirpes,” this will be the order of distribution:

  1. Your estate is divided into equal shares for each of your deceased beneficiary’s children.
  2. If any of those children have passed away but left children of their own, those children receive their parent’s share.
  3. This process continues down the family line until everything is distributed.

In many cases, incorporating the term “per stirpes” into your will, trust or beneficiary designation can be an efficient way to designate contingent beneficiaries. However, you need to carefully consider whether this distribution pattern follows your intentions.

If the person you designate as primary beneficiary passes away before you, do you want the property to go directly to their descendants or would you prefer the property be distributed to their spouse? Would you want the assets reallocated among the other surviving primary beneficiaries? Are the descendants of the primary beneficiary capable of managing the property, or would they need assistance managing any inheritance they receive?

These are important questions you should discuss with an experienced estate planning attorney, who can help you prepare to the best plan for your family and goals.

National Health Care Decisions Day

National Health Care Decisions Day

by | Apr 16, 2024 | 2024, Article, Estate Planning

National Health Care Decisions Day, Estate Planning

National Healthcare Decisions Day (NHDD) is celebrated each year on April 16th. Founded in 2008, the mission of NHDD is to encourage and empower people to begin or continue conversations about their wishes for care through the end of life.

Wisconsin is one of a minority of states that does not have a “family consent” law. This means that unlike other states, if you become incapacitated as an adult, no one in your family (including your spouse, parents, adult children or anyone else) has the legal right to make healthcare decisions for you. In this scenario, a legal guardianship typically must be established through the court.  

However, by signing a Healthcare Power of Attorney, you can name someone to handle your healthcare decisions in the event that you become unable to make these decisions. Everyone over the age of 18, who is competent to make one, should sign a Healthcare Power of Attorney and name both a primary and alternate agent to handle their healthcare decisions. You should make sure your primary and alternate agents are people you feel confident will follow through with your directives and be sure to communicate to them your values and desires for your healthcare.

In addition to a Healthcare Power of Attorney, you may also sign a Declaration to Physicians or a “living will.”  This document sets forth guidelines for withholding or withdrawing medical treatment from you in certain end-of-life scenarios. A living will is a declaration directly to your physician, while a healthcare power of attorney authorizes your agent to make healthcare decisions on your behalf.

Finally, it is important to be aware of the Health Insurance Portability and Accountability Act (HIPAA) and its impact on accessing your protected health information. The major focus of this law is to provide patients more control over their protected health information. The law prohibits disclosure of protected health information without your consent or authorization. You should consider signing a HIPAA authorization form allowing the release of your protected health information to the individuals you have named as agents in your Healthcare Power of Attorney. This will ensure they can access the necessary information to make informed healthcare decisions on your behalf.

Please feel welcome to contact our experienced attorneys at Anderson O’Brien, LLP to learn more about advanced planning for your healthcare decision-making. Let’s make everyday a Health Care Decisions Day!

How to Prepare for Your Estate Planning Meeting

How to Prepare for Your Estate Planning Meeting

by | Jan 12, 2022 | Article, Estate Planning

The thought of preparing an estate plan can be overwhelming. This is especially true if you are completing the estate planning process for the first time. You may have a long list of questions or perhaps you may not know where to begin. An experienced estate planning attorney can help guide you through the process. There are several things you can do to help ensure your first meeting with that attorney is as productive as possible.

Compile a List of your Assets and Liabilities.
There is no one-size-fits-all solution in estate planning. Your individual family, assets and goals should guide your plan. When preparing for your initial meeting to discuss your estate plan, it is very helpful to bring a list of your current assets and liabilities. Some examples of assets are: funds in savings accounts, owned vehicles and retirement accounts. Some examples of liabilities are: taxes owed, credit card debt and mortgage debt. In addition to current values, it is also important to provide the attorney with information regarding how the assets are titled and whether you have any existing beneficiary designations. This information will help the attorney recommend the most appropriate plan for you and discuss estate tax and probate avoidance concerns.

Consider Who You Want to Play a Role in Your Estate Plan.
To have a comprehensive estate plan, you must nominate people and/or entities to act in certain capacities on your behalf. Below is a list of some of the different roles they may play in your estate plan as well as some considerations to think about before your initial appointment.

  1. Personal Representative. Your personal representative, also known as your executor, will handle the settlement of your estate upon your death. In most instances, the personal representative selects an attorney for the estate and works with that attorney throughout the process.
  2. Guardian. Perhaps the biggest decision for people with minor children is the selection of a guardian. This is the person who will be responsible for the care and custody of your minor children upon your death. The guardian of the estate oversees the child’s property, while the guardian of the child is responsible for the child’s day-to-day care.
  3. Trustee. Depending on the size and complexity of your estate, there are several trusts that may be appropriate for your circumstances. Some trusts are created in a separate document, while some are integrated right into your will. When there are minor children, we always recommend some form of trust for their protection. The trustee will be responsible for managing the assets of the trust, employing advisors to help with the trust, generally tracking the beneficiary’s needs and ensuring the trust is administered according to its terms.
  4. Durable General Power of Attorney. A Durable General Power of Attorney nominates an agent and alternate agent to act on your behalf regarding the management of your property and other financial issues. You may establish your Durable General Power of Attorney to be effective immediately or to become effective at a later time when you voluntarily activate it or when a physician certifies that you are incapacitated.
  5. Health Care Power of Attorney. A Health Care Power of Attorney allows you to name an agent and an alternate agent to make health care decisions on your behalf if appropriate medical personnel certify that you are incapacitated, including end of life decision-making.

Decide on Your Beneficiaries.
Perhaps it goes without saying but an essential part of any estate plan is designating who you wish to leave your assets to upon your death. Prior to your initial meeting, you should consider who you want to name as the primary and contingent beneficiaries in your estate plan. Also, you can leave a bequest (property given to someone through a will) to a beneficiary in a variety of ways. You may leave a beneficiary a specific asset or dollar amount.  Alternatively, you may name beneficiaries to receive a percentage of your overall estate. Finally, you should consider whether you want your beneficiaries to receive their bequests outright, or if you want to place certain restrictions on the bequests to help ensure the funds are managed appropriately for minor beneficiaries or those with special needs. This can often be accomplished by using a variety of different trusts that fit your situation.

When you have completed the above steps and you have your documents in order, please reach out to one of our experienced estate planning attorneys, they would be happy to assist you.

Wisconsin Expands Ability to Activate Powers of Attorney for Health Care

Wisconsin Expands Ability to Activate Powers of Attorney for Health Care

by | Jun 28, 2021 | Article Archive

Wisconsin is facing a shortage of primary care doctors, particularly in rural areas. According to a report by the Wisconsin Council on Medical Education and Workforce, there is expected to be a shortfall of 745 primary care doctors by 2035, in large part due to upcoming retirements. While the medical field may seem separate and distinct from the legal field, this looming shortage is already impacting certain laws.

The Wisconsin legislature enacted 2019 Wisconsin Act 90 on February 5, 2020. The Act expands the provider types that can determine whether a person is incapacitated for purposes of activating a power of attorney for health care, declare that a patient has a terminal illness or is in a persistent vegetative state for purposes of invoking a living will.

Under prior law, an incapacity determination could only be made by two physicians, or by one physician and one licensed psychologist. Under the new law, an incapacity determination may be made by two physicians, or by one physician and one of the following individuals: i) a licensed psychologist; ii) a registered nurse who is currently certified as a nurse practitioner by a national certifying body approved by the Board of Nursing; or iii) a licensed physician assistant (PA) who a physician responsible for overseeing the PA’s practice affirms is competent to conduct evaluations of the capacity of patients to manage health care decisions. The new law does not affect the other applicable criteria for determining that a person is incapacitated, including that the providers must still personally examine the patient and cannot be a relative or have a claim to a portion of the person’s estate.

According to State Representative Patrick Snyder, who helped introduce the legislation, several communities in Wisconsin depend solely on advanced practice clinicians, like PAs and registered nurses, for their care because the closest physicians are many miles away and, for these communities, and others that rely heavily on advanced practice clinicians, the Act will allow for a continuity of care that was prohibited under prior law.

If you previously signed a power of attorney for health care or living will under the prior law, you may consider having your document reviewed and potentially updated if you wish to take advantage of this recent law change.

 

So, You Want to Sell Your Life Estate?

So, You Want to Sell Your Life Estate?

by | Aug 17, 2020 | Article Archive

Many people have established a life estate in their residence to protect it if they require Medicaid benefits to pay for their long-term care.  A person establishes a life estate in their residence by signing a deed which transfers ownership to their desired recipients, but also reserves them the legal right to use and benefit from the residence for their lifetime.  Under current Medicaid rules, a life estate is considered an unavailable asset and the underlying residence is not counted in determining the life estate holder’s eligibility for the program if more than five years have passed since its creation.  Life estates created prior to August 1, 2014 are also protected from the Estate Recovery program, which is designed to recover amounts paid for Medicaid benefits from recipients’ estates following their deaths.

A common question arises if the life estate holder no longer occupies the underlying residence: can the residence now be sold?  After all, there are many expenses associated with maintaining a residence, including property taxes, insurance, utilities and maintenance.  If the life estate holder left the residence to enter a long-term care facility, then the cost of such care often means there is little income available to pay for such expenses.

Once a life estate has been established, the underlying residence can only be sold if the life estate holder and all other owners agree to the sale.  However, prior to any sale, it is important to understand the ramifications for the life estate holder’s Medicaid eligibility.  While the life estate itself is considered an unavailable asset for Medicaid purposes, the proceeds from its sale are not.  Accordingly, if a life estate holder is receiving Medicaid benefits and sells his or her life estate, the resulting sale proceeds could cause him or her to have too many assets to continue to qualify for the program.  Alternatively, if the life estate holder does not receive his or her share of the sale proceeds, then under Medicaid rules he or she will be considered to have divested them and this may also disqualify him or her from the program for a period of time.

In light of these Medicaid eligibility issues, it is often beneficial to avoid selling the residence until after the death of the life estate holder.  The owners may consider renting the residence to help cover the costs of maintaining it during such time.  However, many people do not wish to become landlords and decide to sell the residence anyway while relying on other planning options to deal with the sale proceeds, such as using them to purchase assets that do not count for Medicaid eligibility or contributing the proceeds to a Wispact special needs trust.  If the underlying residence is sold and the life estate holder is concerned about his or her eligibility for the Medicaid program, it is important to correctly value the life estate for Medicaid purposes to ensure the life estate holder receives the correct share of the proceeds.

The Medicaid program uses a standard table to value life estates based on the life estate holder’s age at the time of sale.  The value of a life estate decreases as the life estate holder ages since statistically he or she has a shorter life expectancy during which to use the underlying residence.  Accordingly, the older the life estate holder, the less valuable his or her life estate.  For example, for Medicaid purposes, the life estate of a 70 year old is worth approximately 60% of the value of the underlying residence, while an 85 year old’s life estate is only worth approximately 35%.  In the event of a sale, the life estate holder should receive a percentage of the sale proceeds that corresponds to the value of his or her life estate.  If the life estate was established more than five years prior to such sale, then the remaining sale proceeds can be divided by the other owners without penalty.

Prior to selling a residence with an outstanding life estate, it is important to understand the Medicaid ramifications of such sale.  It is also important to discuss any potential income tax ramifications.  Taking the time to consult with a knowledgeable attorney and accountant prior to the sale can help you avoid many of these potential pitfalls.