I Signed My Will, Now What?

By Attorney Katherine A. Young

Completing your estate plan for the first time is a significant milestone.  It means that you have taken an important step forward in planning for your family’s future.  Our clients often breathe a sigh of relief after signing their estate planning documents, knowing the plans they have often long discussed are now finally in place.  However, just because you have signed your documents does not necessarily mean your estate plan is complete.  There are often a variety of tasks we recommend you complete after signing your estate planning documents to ensure your plans are fully realized.

1. Update Your Beneficiary Designations. After signing your estate planning documents, we recommend you review the primary and contingent beneficiary designations you have listed for your (i) life and accidental death insurance policies, (ii) retirement plan, pension plan, 401(k) plan, IRA and profit sharing plans, and (iii) any other contract, annuity, deferred compensation arrangement, policy or plan where a benefit is payable to a named beneficiary upon death. Most of these contract payments pass outside of the provisions of your will or trust directly to the named beneficiary identified in the beneficiary designation form.  This means that simply updating your will or trust does not necessarily change the beneficiary of such contact payments.  It is often necessary to update these beneficiary designations to ensure such payments will be made to your intended beneficiary and coordinated with your overall estate plan.  Your attorney should discuss with you his or her recommendations for updating your beneficiary designations after you complete your estate plan and can often help you to do so if you have any questions.

2. Prepare a List of Tangible Personal Property Bequests. Under Wisconsin law, you can incorporate certain language into your will that allows you the ability to leave a written statement or list disposing of items of tangible personal property at the time of your death. This list is separate from your will, and you can prepare it on your own if you wish.  This provides you with increased flexibility to update such bequests.  The list may only dispose of tangible personal property, such as jewelry, household furnishings, etc., and may not dispose of monetary assets.  To be enforceable, the list must describe the items and their recipients with reasonable certainty, and it needs to be signed and dated by you.  However, if you anticipate any disagreement among the beneficiaries, you can certainly have the list witnessed or notarized.  You may change or revoke the list at any time.  If you choose to prepare a list and decide to subsequently change it, we recommend that you destroy the old list and prepare an entirely new list.  You should always avoid erasing or crossing out prior entries on your list because this can lead to confusion regarding your intentions and possibly compromise the enforceability of the list.

3. Prepare and Maintain a Current List of Assets and Liabilities. We recommend that you regularly maintain a list of all of your substantial assets (home, checking and savings accounts, investments, retirement plans, or otherwise) and liabilities. We also suggest that you maintain a list of your insurance policies, policy numbers, and the name of the agent for each policy.  By regularly maintaining such lists, the person handling your estate will have accurate information regarding your assets and liabilities, and this can significantly increase the ease and efficiency with which he or she can settle your estate.  These lists should be updated at least annually and be kept in a safe and secure location where the person handling your estate knows how to access them.

4. Review and Update Your Estate Plan as Needed. The estate plan which is appropriate for you now may not be suitable years from now. We recommend that you contact your attorney and review your estate plan when any one or more of the following occur (i) when you move from Wisconsin to another state, (ii) when there is a change in your family circumstances (divorce, marriage, death of a child, marriage of a child, new grandchildren, incapacity of spouse or children, etc.), (iii) if there is a significant change in the law which may have an impact on your estate, and (iv) finally, even if you do not have a change in family circumstances or finances, it is advisable to regularly review your estate planning documents to make sure that they are a current statement of your preferences regarding the disposition of your property upon death.

The above recommendations are general tasks that should be completed in most all estate plans.  However, there may also be specific tasks that need to be completed that are unique to your individual estate.  Be sure to discuss with your attorney what tasks need to be completed after your estate planning documents have been signed to ensure your estate plan will fully accomplish your goals.

 

Taking Control of Your Estate Plan

Have you ever considered making a will or a revocable trust? Did you ultimately find a reason not to do so? If so, according to a recent survey by Caring.com, you are not alone. The survey indicates that only 42 percent of U.S. adults have estate planning documents such as a will or revocable trust. When the survey results are divided into age groups, it is apparent that people often delay getting these important documents until later stages in life.

The survey also notes that people have a variety of reasons for not preparing an estate plan. Forty-seven percent of respondents without an estate plan stated that they “just haven’t gotten around to it.” On the other hand, 29 percent of respondents indicated that they “don’t have enough assets to leave anyone.” While these reasons are not surprising, they do overlook the crucial importance of having these documents in place at any stage of life. Thinking about your own mortality is not fun at any age, but there are many reasons why everyone over age 18 should have an estate plan in place.

Be in Control of Who Receives Your Assets

First, preparing a will or revocable trust allows you to control the distribution of your assets upon your death, even if such assets are modest. You are able to name the beneficiaries who inherit your assets. If a person dies without a will or other estate planning, most states, including Wisconsin, have a default statute which controls who then inherits his or her assets. The people named to inherit as heirs under the statute may not be the same people who the decedent would have otherwise chosen if he or she prepared a will or revocable trust.

Be in Control of How your Estate is Handled

Second, if an estate needs to go through probate to be settled, having a will can often make the process simpler and less expensive for your loved ones. Probate is the court process used to settle a person’s estate if they have over $50,000 in solely-titled assets at the time of their death. If a person has a will, their estate is often eligible to be administered informally, which avoids the need for court hearings. Also, you are able to name in a will who you want to be in control of handling your estate. This person is called your “personal representative.” A will allows you to name a person you trust to serve in this role who has the necessary skill and time to do the job well. Finally, when meeting with an attorney to prepare your estate plan, you can also discuss various planning options to avoid probate all together, such as using a revocable trust.

Be in Control of Who Takes Care of Your Children

Third, if you have minor children, having a will is critical. It allows you to name a guardian to take care of your children in the event of your death. You can also incorporate trust planning into your estate plan so that the assets your children inherit are preserved for their benefit until they reach an age at which you feel comfortable having them manage such assets on their own.

Be in Control of Who Takes Care of You

Finally, when people think of putting together an estate plan, they often first think of preparing a will or revocable trust and planning for the event of their death. However, planning for the event of your incapacity through the use of a durable general power of attorney and health care power of attorney is equally important. These documents allow you to control who makes decisions for you if you become incapacitated and can no longer make such decisions on your own.

Despite the perception that only the elderly or the rich need estate plans, having an estate plan in place is crucial at any age to ensure you control important decisions regarding your life and your assets. Such proactive planning also allows you to make the process of settling your estate as simple as possible for your loved ones and ensures that your wishes will be carried out. These important decisions should not be left up to chance.

Medicaid Program – Partial Repeal of Wisconsin Act 20

On June 30, 2013, the Wisconsin Legislature passed Wisconsin Act 20. As noted in our fall issue, the new law dramatically changed certain aspects of the State’s Medicaid program for individuals who need long-term care. In general, the changes were aimed at allowing the State broader authority to recover funds paid on behalf of long-term care Medicaid recipients. Wisconsin Act 20 impacted a wide variety of laws, including laws relating to estate recovery, trusts, jointly-held property and life estates. The Act was accompanied by much controversy, and both the Elder Law Section of the State Bar and Wisconsin’s Chapter of the National Academy of Elder Law Attorneys advocated for a repeal or partial repeal of the new law.

As of this past December, the Wisconsin Legislature enacted a partial repeal of Wisconsin Act 20. The partial repeal is contained in Wisconsin Act 92, which adopts a modified version of the Uniform Trust Code and was enacted on December 13, 2013. Below is a summary of the provisions that were repealed.

  1. Wisconsin Act 20 provided that “exempt” assets (assets that do not impact a person’s eligibility for Medicare) could not be transferred to another person without the imposition of a divestment penalty. This provision has been repealed.
  2. Section 49.453(4c) of the Wisconsin Statutes, which was enacted under Wisconsin Act 20, imposed a divestment penalty on persons who entered into a promissory note or loan agreement with a “presumptive heir,” such as a child. This provision has been repealed.
  3. The provision that expanded the definition of what property may be subject to a claim by the State for recovery of funds paid on behalf of a long-term care Medicaid recipient has been amended to include “revocable trusts” rather than “living trusts,” and irrevocable trusts are now specifically excluded.
  4. Under Wisconsin Act 20, the State was allowed to recover funds paid on behalf of a long-term care Medicaid recipient from the estate of his or her surviving spouse using all real and personal property in which the surviving spouse had an ownership interest at the recipient’s death, including a marital property interest the surviving spouse had at any time within five years before the recipient’s application for benefits. This provision has been repealed.
  5. Wisconsin Act 20 also precluded the State from issuing undue hardship waivers to prevent recovery from the estate of a non-recipient surviving spouse. This provision has been repealed to allow waivers for hardship.
  6. The provision that allowed the State to void certain transfers of real property under Wis. Stats., § 49.4962, has been repealed.
  7. The provision that allowed the State to record a “request for notice” if certain real property in which a long-term care Medicaid recipient has an interest is transferred or encumbered has been repealed.
  8. Wisconsin Act 20 required trustees to provide the State notice of the death of a living trust settlor if either he or she, or his or her predeceased spouse, was the recipient of long-term care Medicaid benefits. This provision has been repealed.
  9. The requirement that trustees provide the State notice of the death of a beneficiary of a self-settled special needs or pooled trust if he or she was the recipient of long-term care Medicaid benefits has also been repealed.
  10. Wisconsin Act 20 held trustees personally liable to the State for any costs incurred in recovering funds paid on behalf of a long-term care Medicaid recipient from property distributed from the trust before any repayment to the State was made, and for any funds that the State was unable to recover from the persons to whom the property was distributed. This provision has been repealed.
  11. The provision that allowed the trustee of a pooled trust to retain only 30% of the balance of the trust after the death of a beneficiary who was the recipient of long-term care Medicaid has been repealed.

While the above provisions have been repealed, many of the changes that Wisconsin Act 20 made to Wisconsin’s Medicaid laws remain in effect today and have important implications for long-term care planning.

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