It can be an exciting time for parents of high school seniors. Many are selecting colleges, technical schools, planning for careers after high school, or perhaps a trip abroad. With all the changes that come with being the parent of a child who is turning 18 and in their last year of high school, in most cases parents are not thinking about the legal change that takes place when a child turns 18.

When a child turns 18, he or she is an adult in the eyes of the law. As a result, parents can no longer make legal decisions for their son or daughter, or even receive information about them that is considered private unless they have their son or daughter’s permission. This can have unexpected consequences and create problems, particularly when the son or daughter is many miles away. The good news is that many of these potential problems can be easily avoided with a little bit of planning. The following are a few of the legal documents a parent of child who has turned 18 should consider putting in place:

1.) Healthcare Power of Attorney.
Many people only think about having someone execute a healthcare power of attorney if they are elderly or have a medical condition. In reality, everyone over the age of 18 should have a healthcare power of attorney in place. A healthcare power of attorney allows someone to appoint another person to make healthcare decisions for them in the event they are incapacitated. In the event a young adult is miles from home and is in an accident or has a medical condition that renders them incapacitated, even if it is temporary, a properly executed healthcare power of attorney will allow his or her parents to make medical decisions on their behalf. If a healthcare power of attorney is not in place, there is no clear decision-making authority and a legal guardianship may be required in some cases.

2.) HIPAA Release.
The Health Insurance Portability and Accountability Act (“HIPAA”) is a federal law that protects the privacy of an individual’s medical information. While the HIPAA law provides each of us with important privacy protections, it can also have unintended consequences. For example, parents of a young adult have no legal right to receive any information regarding their adult son or daughter’s healthcare or condition without the son or daughter’s consent. In situations where the son or daughter is incapacitated or otherwise not able to give consent, it can be a frustrating situation for parents who are trying get information on their son or daughter’s condition. This situation can be avoided by having the adult son or daughter sign a HIPAA Release consenting to the release of his or her medical information to the individuals named in the release (e.g., his or her parents).

3.) Financial Power of Attorney.
A financial power of attorney allows someone to appoint another person to obtain information and make financial decisions on their behalf. A financial power of attorney can be limited or broad in scope and can be effective immediately or only in the event of legal incapacity depending on your son or daughter’s preference. Financial powers of attorney can be important if a parent is assisting with financial aid matters, or if a young adult is traveling aboard and wants to allow his or her parents to handle their bank accounts and other financial transactions while they are gone.

4.) Education Release.
The Family Educational Rights and Privacy Act (“FERPA”) is a federal law that protects the privacy of a student’s education records and requires that any student over the age of 18 provide written consent before his or her education records (such as grades, transcripts, etc.) can be released, even to parents who are paying the tuition bill. Many educational institutions are proactive and inform parents and students about this requirement. However, some are not, and parents should inquire with their child’s secondary educational institution regarding the requirements for the release of their son or daughter’s educational records.

If you have a young adult in your family and have questions or need assistance with regard to obtaining the above referenced documents, then you should contact one of the estate planning attorneys at Anderson O’Brien who can help you navigate this process.

 

When someone decides to sell commercial real estate, he or she will often hire a licensed real estate broker to assist in the process. A licensed real estate broker will require that the property owner sign the form WB-5 Commercial Listing Contract – Exclusive Right to Sell (the “Listing Contract”). This is a document approved for use by the Wisconsin Department of Regulation and Licensing as the primary contract between the broker and the property owner with respect to the listing and eventual sale of the property and the payment of the broker’s commission.

The Listing Contract is a standardized form with several blanks that are filled in by the broker prior to signing. Due to the standardized nature of the form, most people do not seek legal counsel prior to entering into the Listing Contract. However, the Listing Contract may contain terms that are unfavorable to the seller, particularly with respect to when the seller is required to pay the broker’s commission.

The standard Listing Contract has many provisions that you would expect with respect to when the broker’s commission is earned. For example, the commission is due when the property is sold, exchanged, or an option to purchase the property is granted and subsequently exercised. Unfortunately, the Listing Contract also contains what might be some unexpected terms regarding when the seller must pay the broker’s commission. For example, the Listing Contract also provides that the commission becomes due in the event: (i) a transfer occurs which causes an effective change in ownership or control of all or any part of the property; or (ii) a buyer is procured for the property at no less than the price and terms described in the Listing Contract even if seller does not accept the offer or the transaction does not close.

Based on the above language, if the seller dies during the term of the Listing Contract and the seller’s ownership interest in the property is transferred to the seller’s heirs, the broker’s commission is due under the Listing Contract. Likewise, if the seller accepts an offer to purchase the property and the potential buyer is unable to obtain financing and the transaction never closes, the broker’s commission is still due. If you think a broker would never attempt to collect a commission under these circumstances, think again.

In Ash Park, LLC v. Alexander & Bishop, Ltd., 363 Wis. 2d 699 (2015), the Wisconsin Supreme Court recently enforced the terms of a Listing Contract against the property owner and required the payment of the broker’s commission in a similar situation. Ash Park involved a seller that contracted with a broker to sell vacant land. An offer to purchase was signed, but the buyer was unable to obtain financing and the transaction never closed through no fault of the seller. The broker subsequently sued the property owner for payment of the broker’s commission even though the transaction never closed. The Court determined that there was an enforceable contract and the commission was due and payable to the broker.

The result in Ash Park should be a lesson to property owners who are considering hiring a licensed real estate broker to sell their property. This is just one example of potential unintended consequences for a seller when the terms of the Listing Contract are not clearly understood and negotiated. Potential sellers should consider having legal counsel review any proposed Listing Contract for the sale of their property prior to entering into this type of agreement.

A new law passed earlier this year made several changes to Chapter 704 of the Wisconsin Statutes that impact the rights of residential landlords and tenants. The following is a brief summary of some of the most significant changes:

1. Disposing of Tenant’s Personal Property. Absent a written agreement to the contrary, a landlord may now presume that any property left behind by the tenant has been abandoned and may dispose of such property as the landlord deems appropriate (including by private or public sale). For this provision to apply, the landlord must provide the tenant with written notice prior executing the lease that landlord does not intend to store the tenant’s property.

2. Disclosures by Landlords. Landlords are now required to disclose to prospective tenants any building or housing code violations that the landlord is aware of that affect the lease space, or are a significant threat to health or safety and have not been corrected. This disclosure must be made prior to the execution of a lease or acceptance of any money by landlord.

3. Check-In Procedures. For all new tenants (not renewals) landlords must provide a standardized check-in sheet to the tenant with an itemized description of the condition of the premises at the time of check-in. The tenant has seven days to complete the check-in sheet and return it to the landlord.

4. Damages for Failure to Vacate. If a tenant remains in possession of the premises beyond the end of the lease term without the landlord’s consent, then the landlord is entitled to damages of at least twice the rental value for the space apportioned on a daily basis.

5. Security Deposit Requirements. If a landlord wants to have the ability to withhold any portion of the tenant’s security deposit for any reason other than those specifically stated in the statute, then those additional items must be contained in a separate document titled “NONSTANDARD RENTAL PROVISIONS” and signed by the tenant. The landlord must also discuss each of the additional items with the tenant.

6. Potential Remedies for Tenants. In what might be the most significant change, the new law also provides that a violation of Chapter 704 of Wisconsin Statutes “may also constitute unfair methods of competition or unfair trade practices under Wis. Stat. § 100.20. The effect of this language is to allow the tenant to seek the remedies available under Wis. Stat. § 100.20, which include double damages and the recovery of attorneys’ fees.

Landlords should review their form residential leases to ensure that they are in compliance with the new law. In addition, some aspects of the new law also apply to commercial landlords and tenants. The real estate attorneys at Anderson O’Brien can answer any questions you may have about the new law and how it may apply to your lease agreement.

The Wisconsin legislature recently gave parents more options in planning for the short-term care and support of their children, if they are unable to do so. This assistance came in the form of a new power of attorney document which allows a parent to temporarily delegate full or partial parental authority to a third person without court or social services involvement.

Prior to the enactment of this new law, the only way a parent could delegate parental authority was through a formal guardianship proceeding or a petition for protective services. Obviously, these options were not practical for parents simply looking to delegate legal decision-making authority to a third person for a short period of time.

The new power of attorney allows a parent to temporarily delegate legal decision-making authority and care-giving responsibility for their children to a third party for up to one year. This tool is perfect for situations where parents will be unavailable due to a vacation or military service and they wish to delegate healthcare and other decision-making authority to a third party while they are away. This delegation of parental authority will also work in more serious situations such as the incapacity, medical treatment or incarceration of a parent.

There are limits to the use of the new parental power of attorney. For example, the power of attorney designation may not exceed one year, parental authority may only be delegated by individuals who have legal custody and both parents must sign if both have legal custody. The power of attorney must be properly executed and substantially conform to the statutory requirements. A parent who has delegated his or her powers may revoke the power of attorney document in writing at any time.

Whether it is for a short-term vacation or more permanent planning, it is important to plan for the care and support of your minor children. The estate planning team at Anderson O’Brien has the expertise to advise you on what tools are best suited to accomplish your goals.