The ABCs of LLCs

The ABCs of LLCs

by | Jun 2, 2025 | 2025, Article, Business

Are you considering going into business with a friend? A limited liability company (LLC) is certainly a great choice. Limited liability companies are easy to form, offer the tax advantage of a partnership, and the liability protections of a corporation. However, like any venture, you should do your homework in advance.

If there will be more than one member, an operating agreement is highly recommended. While not required, an operating agreement affords members tremendous flexibility in spelling out the rules that will govern the relationship going forward. Operating agreements may cover everything from voting rights, to profit distributions, to dissolution should there come a time when the relationship ends. If an operating agreement is not completed, questions and disputes are resolved by Wisconsin statutes and case law.

Chapter 183 of the Wisconsin Statutes covers LLCs.  While the entirety of Chapter 183 is beyond the scope of this article, there are some important things to know, especially if you are going to be the member that is largely in charge of running the business.

  1. Members owe each other duties of care and loyalty. These duties include holding LLC property, profits, and benefits for the company rather than for your own benefit and accounting to your fellow members. With reasonable notice, your fellow members are also entitled to view any records regarding the company’s activities, affairs, financial condition, and other circumstances.
  2. Any distributions made by an LLC must be proportional among members on the basis of each member’s contributions or capital account.
  3. Expelling a member from an LLC is not easy. An operating agreement providing other grounds for removal can be created. A member can only be expelled involuntarily by a court order finding wrongful conduct that is materially, and adversely affecting the company’s business or affairs.

In short, partnering with one or more friends or associates in a business venture can be exciting and profitable. A LLC is a great tool for forming the business. However, first educating yourself on your roles, duties, and responsibilities as an LLC member is important, and consulting with legal counsel to assist in drafting a detailed operating agreement can avoid problems down the road. Our experienced and knowledgeable business attorneys are happy to meet with you to discuss creating an LLC.

Wisconsin Medicaid Law Allows Some Exceptions to Divestment

Wisconsin Medicaid Law Allows Some Exceptions to Divestment

by | May 19, 2025 | 2025, Article, Elder Law, Estate Planning

In Wisconsin, there are specific exceptions to the divestment rules for Medicaid qualification, allowing certain asset transfers without incurring a penalty. These exceptions are narrowly defined and strictly enforced. Below are the key exceptions:

  1. Transfers to a Spouse

Assets transferred to a spouse are not considered divestment. For married couples, the community spouse (the spouse not applying for Medicaid) is entitled to retain a portion of the couple’s assets, known as the Community Spouse Resource Allowance (CSRA). Transferring assets to the community spouse is allowed under Medicaid rules.

  1. Transfers to a Disabled or Blind Child

Transfers to a child who is legally blind or permanently disabled (as determined by Social Security Administration standards) are exempt from the divestment rules. This exception applies regardless of the child’s age.

  1. Transfers to a Trust for a Disabled Person

Assets transferred to a trust established for the sole benefit of a disabled person under age 65 are not treated as divestment. This applies to both disabled children and other disabled people.

  1. Transfer of a Home in Specific Circumstances

Certain transfers of the applicant’s home are exempt from divestment penalties, including:

  • To the applicant’s spouse.
  • To a child under age 21.
  • To a child who lived in the home for at least two years immediately prior to the applicant entering a nursing home, and who provided care that delayed the applicant’s need for long-term care.
  • To a sibling with an equity interest in the home who lived there for at least one year before the applicant entered a nursing home.
  1. Transfers for Fair Market Value

If assets are sold or transferred for their fair market value, it is not considered divestment. For example, selling property at its full appraised value or receiving equivalent compensation for a transfer.

  1. Transfers Made with No Intent to Qualify for Medicaid

If the applicant can prove that a transfer was made exclusively for reasons unrelated to Medicaid qualification, it may not be considered divestment. However, proving this requires substantial documentation and evidence of intent.

  1. Hardship Waivers

In rare cases, if a divestment penalty would cause undue hardship—such as putting the applicant at risk of serious harm or endangering their health or life—a hardship waiver may be granted. This is decided on a case-by-case basis by Medicaid administrators.

While these exceptions exist, divestment rules are complex, and mistakes can lead to significant penalties or ineligibility for Medicaid. It is critical to consult with an experienced elder law or Medicaid attorney to navigate the rules and ensure compliance with Wisconsin’s Medicaid regulations. Proper planning can help protect assets and ensure eligibility for benefits. If you have any questions or concerns about divestments and Medicaid eligibility please make an appointment to meet with one of our experienced attorneys.

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.

Legal Separation V. Divorce

Legal Separation V. Divorce

by | Apr 9, 2025 | 2025, Article, Family Law

Clients often ask what the difference is between a legal separation and a divorce. While the court process for both is similar, the legal consequences of each are significantly different. Below are some of the differences between these two judgments:

  1. Legal Definition and Consequences of Divorce: Divorce is defined as the dissolution of the marriage relationship. Once a judgment of divorce is entered, parties are free to remarry another individual after six months.
  1. Legal Definition and Consequences of Legal Separation: Legal separation does not terminate a marriage. Legally separated couples may reconcile without having to remarry.
  1. Grounds for Divorce and Legal Separation: The grounds for legal separation are that the marriage is “broken.”  Both parties must state that the marriage is broken for a court to grant legal separation. For a divorce, the court must find that the marriage is “irretrievably broken.”
  1. Property Division: Upon judgment of annulment, divorce, or legal separation, the court shall divide the parties’ property and transfer the title accordingly. Property acquired by a spouse by gift remains the separate property of that spouse and is usually not subject to division upon divorce.
  1. Jurisdictional Requirements: For legal separation, a court has personal jurisdiction over an individual after that person has been a resident for at least 30 days in the Wisconsin county in which the action is brought. For divorce, the court must have personal jurisdiction over one spouse, who must have lived in Wisconsin for six months and in the county of filing for 30 days.

There are several reasons why someone might choose to remain legally married, even if they are separated.

  • The marriage may remain intact to continue to receive health insurance benefits from the other spouse. However, some policies may make exceptions for separated couples.
  • The parties may choose to stay married for tax or citizenship reasons.
  • Religious beliefs may prohibit spouses from seeking a divorce, but not a legal separation.
  • Spouses may hope that there is a chance that they will be able to reconcile their marriage and get back together.
  • A legal separation severs the financial relationship between the parties, where they can no longer create marital debt or create marital property.

There are also reasons why a party may proceed with a divorce instead of a separation.

  • They would like to marry someone else and end their current marriage.
  • The chance of reconciliation is very low, and it may be more appealing to eliminate the stress and uncertainty by obtaining a final divorce.
  • If there are other complicating factors involved such as substance abuse or violence, it may be in the party’s best interest to file for a divorce to end the marriage.

Even if the parties are legally separated, they may convert that legal separation into a divorce by filing a motion with the court. Choosing which path to take requires some thoughtful analysis and a determination of what goals each spouse has, and whether or not they are truly interested in ending their marriage at this point, or keeping the door open for possible reconciliation.

If you have any questions on these topics our  skilled family law attorneys would be happy to meet with you.

Permanent Partial Disability and How it Could Affect You.

Permanent Partial Disability and How it Could Affect You.

by | Mar 17, 2025 | 2025, Article, Worker's Compensation

When thinking about workers’ compensation injuries, workers understandably focus on the immediate necessities of (1) getting medical expenses paid and (2) wage replacement for missed work. Medical expenses and wage replacement, also known as, temporary total disability (TTD) or temporary partial disability (TPD) make up two out of the three main workers’ compensation benefits. However, workers need to make sure they are taking advantage of the third main benefit afforded under Wisconsin Workers’ Compensation law: permanent partial disability (PPD).

Because workers’ compensation is a no-fault system, there is no payment for pain and suffering, as there is in normal fault-based claims like auto accidents or slips and falls. That said, Wisconsin’s Workers’ Compensation law does allow for payment for permanent functional loss or impairment caused by a work injury. When an injured worker’s doctor decides that the worker has reached an “end of healing” or “healing plateau,” the doctor may assign a percentage of permanent disability to the affected body part. This rating takes into account the permanent losses the employee will have such as, range of motion, loss of endurance, weakness, pain, and other elements.

This percent of functional disability is determined by the worker’s treating physician. Wisconsin PPD ratings are not required to follow the American Medical Association (AMA) Disability Guidelines. The ratings are left up to the discretion of the treating physician with some guidance from the AMA. Also, there are certain scheduled injuries and surgeries that will qualify a worker for a minimum percentage, e.g. total knee or total shoulder replacement would equal 50% minimum.
In terms of calculating the PPD benefit, the PPD percentage assigned is multiplied by the number of weeks the total body part is “worth” if the body part was completely lost. For example, a shoulder is “worth” 500 weeks, this means if a worker’s entire shoulder was amputated, he or she would be entitled to 500 weeks of PPD. If a doctor assigns the worker, for example, 12% PPD to the injured shoulder, that worker is entitled to 60 weeks of PPD payments (.12 x 500). For injuries occurring after January 1, 2025, the PPD weekly rate is $446. To illustrate, the 12% PPD for a shoulder injury, occurring after January 1, 2025 is worth $26,760 (.12 x 500 x $446).

While PPD benefits are not huge sums of money, especially compared to personal injury awards, these are claims that injured workers need to make sure they are asking their treating physicians about once an end of healing is reached. Even a few percentage points of permanency can provide the injured worker needed compensation during a very stressful period.

If you have been injured at work and have questions, or your work compensation claim has been denied by the insurance company, please reach out to our experienced Workers’ Compensation Attorneys for assistance.

What Landlords Should Know About the Wisconsin Consumer Act

What Landlords Should Know About the Wisconsin Consumer Act

by | Jan 6, 2025 | 2025, Article, Real Estate

Residential landlords in Wisconsin now face liability under the Wisconsin Consumer Act (WCA) following the Wisconsin Court of Appeals’ decision in Koble Invs. v. Marquardt, 412 Wis. 2d 1, 7 N.W.3d 915 (Ct. App. 2024).

The WCA aims to:

  • simplify, clarify and modernize the law governing consumer transactions
  • protect customers against unfair, deceptive, false, misleading and unconscionable practices by merchants.

In the Koble case, the Court found that the landlord violated the WCA by serving a five day eviction notice during the COVID-19 moratorium. Specifically, the landlord attempted to “enforce a right with knowledge or reason to know that the right does not exist” in violation of Wis. Stat. § 427.104. Penalties for WCA violations can be severe, including the payment of attorney’s fees.

Additionally, the Koble Investments decision found the landlord violated Wis. Stat. § 704.44, which voids rental agreements that contain certain lease provisions.

Including any of the following provisions in a residential lease will make the lease void and unenforceable:

(1) Allows a landlord to do any of the following because a tenant has contacted an entity for law enforcement services, health services, or safety services:

(a) Increase rent.

(b) Decrease services.

(c) Bring an action for possession of the premises.

(d) Refuse to renew a rental agreement.

(2) Authorizes the eviction or exclusion of a tenant from the premises, other than by judicial eviction procedures as provided under chapter 799.

(3) Provides for an acceleration of rent payments in the event of tenant default or breach of obligations under the rental agreement, or otherwise waives the landlord’s obligation to mitigate damages as provided in Wis. Stat. §. 704.29.

(4) Requires payment by the tenant of attorney fees or costs incurred by the landlord in any legal action or dispute arising under the rental agreement. This subsection does not prevent a landlord or tenant from recovering costs or attorney fees under a court order under chapter 799 or 814.

(5) Authorizes the landlord or an agent of the landlord to confess judgment against the tenant in any action arising under the rental agreement.

(6) States that the landlord is not liable for property damage or personal injury caused by negligent acts or omissions of the landlord. This subsection does not affect ordinary maintenance obligations of a tenant under Wis. Stat. §. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

(7) Imposes liability on a tenant for any of the following:

(a) Personal injury arising from causes clearly beyond the tenant’s control.

(b) Property damage caused by natural disasters or by persons other than the tenant or the tenant’s guests or invitees. This paragraph does not affect ordinary maintenance obligations of a tenant or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

(8) Waives any statutory or other legal obligation on the part of the landlord to deliver the premises in a fit or habitable condition or to maintain the premises during the tenant’s tenancy.

(9) Allows the landlord to terminate the tenancy of a tenant based solely on the commission of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is the victim, as defined in Wis. Stat. §. 950.02 (4), of that crime.

(10) Allows the landlord to terminate the tenancy of a tenant for a crime committed in relation to the rental property and the rental agreement does not include the notice required under Wis. Stat. §. 704.14.

The landlord in the Koble case violated § 704.44(10) because the rental agreement allowed the landlord to terminate the lease for a crime committed in relation to the rental property without providing the proper notice.

NOTICE OF DOMESTIC ABUSE PROTECTIONS

(1) As provided in section 106.50 (5m) (dm) of the Wisconsin statutes, a tenant has a defense to an eviction action if the tenant can prove that the landlord knew, or should have known, the tenant is a victim of domestic abuse, sexual assault, or stalking and that the eviction action is based on conduct related to domestic abuse, sexual assault, or stalking committed by either of the following:

(a) A person who was not the tenant’s invited guest.

(b) A person who was the tenant’s invited guest, but the tenant has done either of the following:

  1. Sought an injunction barring the person from the premises.
  2. Provided a written statement to the landlord stating that the person will no longer be an invited guest of the tenant and the tenant has not subsequently invited the person to be the tenant’s guest.

(2) A tenant who is a victim of domestic abuse, sexual assault, or stalking may have the right to terminate the rental agreement in certain limited situations, as provided in section 704.16 of the Wisconsin statutes. If the tenant has safety concerns, the tenant should contact a local victim service provider or law enforcement agency.

(3) A tenant is advised that this notice is only a summary of the tenant’s rights and the specific language of the statutes governs in all instances.

The Court ordered Koble Investments to repay the tenant for all payments that were made under the unenforceable lease as a result of Koble’s violation.

KEY TAKEAWAYS

  • Landlords must not attempt to enforce a right against tenant when they know or should know the right does not exist.
  • Residential leases must comply with Wis. Stat. § 704.44.

Landlords should regularly review their residential leases to ensure compliance with Wisconsin statutes. If you are a landlord and you have any questions, the team of knowledgeable attorneys at Anderson O’Brien, LLP would be happy to assist you in ensuring your leases comply with Wisconsin law.