Family Cabin LLCs

Family Cabin LLCs

by | Dec 26, 2023 | Article, Business, Real Estate

We all know someone who has a family cabin “up north.” Family cottages, cabins, and hunting land are a common estate planning concern in Wisconsin. The current owners want to preserve a place full of fun and memories for future generations.

Unfortunately, the way these properties naturally pass under the law does not fit the needs of every family and that can lead to trouble. For example, picture the current owners of a cottage have four children, if the cottage were to pass to their children without any planning, the children would then co-own it as tenants in common. Each co-owner would own an equal share of the property. It sounds simple, but what if one child wants to sell the property immediately and another wants to keep it in the family for future generations?

Under a tenancy in common, each owner can transfer their interest in the property independently of the other co-owners. This can lead to complications when one co-owner dies, goes through a divorce or has a collection action brought against them by creditors. Additionally, a co-tenant may ask the court to partition the property. A partition action could result in the property being split into separate parcels or a forced sale. Even if all co-owners wish to continue to own the property together, the statutory framework for sharing property and its expenses leaves much to be desired.

Common planning tools for co-ownership of property include Trusts and Limited Liability Companies (LLCs). Both Trusts and LLCs can alleviate common ownership problems but, between these options, an LLC is more flexible and often better suited for long-term planning.

What is an LLC?
An LLC is a business entity with one or more owners, known as members. When an LLC is set up for a shared family property, the LLC holds the property rather than the individual owners. The LLC operates according to an Operating Agreement, which outlines the rights and obligations of the members, how the LLC will be managed, and how decisions will be made.

Benefits of an LLC for Shared Family Properties:

Management of the Property
The Operating Agreement may lay out a framework for scheduling the use of the property, how the property will be maintained and decorated, and how shared expenses will be allocated and paid. The agreement may also determine who has a vote in these decisions. An LLC may also appoint a manager to be responsible for making sure that financial matters are managed, for example, they may propose a budget to the members and ensure that bills are paid.

 Provisions for Exit Strategies and Nonpayment
Sometimes a person inheriting a property would rather sell their interest. The Operating Agreement can provide these members the option to sell their interest back to the LLC according to an affordable structure. Additionally, the agreement may also address those members who do not contribute to shared bills or assessments. Provisions may include restricting the use of the property until payments are made.

 Restrictions on Transfer of Ownership
As discussed above, under a tenancy in common, an owner may transfer their interest in the property to another person or file a mortgage against their interest. The Operating Agreement may restrict owners from encumbering the property. It can also dictate permitted transferees. This means that an owner can be kept from transferring their property to someone outside the family as may otherwise happen at their death or divorce.

Tax Planning and Gifting
Family cottage LLCs may be used as a vehicle for gifting to avoid gift and estate taxes. LLCs allow for the gifting of units of ownership over several years. This can provide an opportunity to transfer interest in a way that avoids gift and estate tax.

 Liability Shield
As the name suggests, a limited liability company also can provide owners with a certain degree of liability protection from certain occurrences.

 Overall, LLCs can be individually tailored to suit unique scenarios for shared family properties. They can provide a great deal of flexibility for change as the need arises and offer many different protections for the owners of a property. If you are intersted in setting up an LLC for your family cabin please contact one of our experienced business attorneys.

When Will I Receive My Worker’s Compensation Payments?

When Will I Receive My Worker’s Compensation Payments?

by | Dec 18, 2023 | Article, Personal Injury, Worker's Compensation

At our firm we field many inquiries from individuals who have had the misfortune of sustaining a work injury that naturally have the question:  When do I start receiving benefits from the workers’ compensation insurer?

Very broadly speaking, as every case/situation is unique, workers’ compensation benefits often break down into three main categories:  temporary disability benefits, permanent disability benefits and medical expenses. For this article the focus is on the  first category:  temporary disability benefits, which is a form of wage replacement if the injured work is either (1) completely off work – known as “temporary total disability” or (2) partially off work with reduced hours or wages – known as “temporary partial disability.” Understandably looking to make sure they can pay bills, put food on the table and maintain their life, the injured worker is often curious when and how they start receiving disability payments.

If the injured worker is completely off work, they are entitled to two-thirds of their average weekly wage, subject to a cap. (For injuries occurring after January 1, 2023, the maximum weekly wage is $1,870.50, resulting in a weekly benefit of $1,247.00) What is frequently confusing is when those benefits begin; this implicates what is colloquially known as the three-day/seven-day rule. By, Wis. Stat. § 102.43:

“If the injury causes disability, an indemnity shall be due as wages commencing the fourth calendar day from the commencement of the day the scheduled work shift began, exclusive of Sundays only, excepting where the employee works on Sunday, after the employee leaves work as the result of the injury, and shall be payable weekly thereafter, during such disability. If the disability exists after seven calendar days from the date the employee leaves work as a result of the injury and only if it so exists, indemnity shall also be due and payable for the first three calendar days, exclusive of Sundays only, excepting where the employee works on Sunday.”

What does this all mean?  In short, there is a three-day waiting period for any disabilities lasting seven days or less; if the worker misses seven days or less because of work injury, he or she does not get paid for the first three days but can be paid for days four to six. However, if the worker remains off work beyond the seventh day, the worker is paid for those first three days of missed work and the subsequent days thereafter.

Temporary total disability payments continue while the worker’s treating practitioner states that the worker needs to be off work completely because of the work injury, or, as long as the practitioner places temporary physical restrictions that the employer cannot accommodate (i.e. doctor imposes temporary restrictions of no lifting more than 10 pounds, and alternate sit/stand every 30 minutes, but worker’s duties involve continuously lifting 50 pound boxes while standing).

At some point, the treating practitioner will put the injured worker at “end of healing.” This is the point when the worker reached his or her healing plateau; this concept is often described as the point where the worker isn’t getting any better or any worse, (also called stationary). Once this occurs, temporary total and partial disability benefits will cease. Then, the question becomes what, if any, permanent disability benefits is the injured worker entitled to?  This would be a topic for another day.

Of course, the above is meant to be a very generalized view and explanation of temporary disability benefits. Every case varies widely depending on the injury, treatment, and whether an insurance company “independent medical examination” is involved. As always, feel free to reach out to our experienced Worker’s Compensation Attorneys for any questions about your work injury.

 

If A Tree Falls In Your Woods … Property Owner Liability.

If A Tree Falls In Your Woods … Property Owner Liability.

by | Dec 4, 2023 | Article, General, Liability

When most people look at trees, legal liability is unlikely the first thing that comes to mind. You may enjoy the shade they provide in the summer and their array of fall colors. However, you should also be on the lookout for liability, particularly for those trees close to your property line.

By way of example, imagine a mid-summer storm comes through sending the large, beautiful maple tree you have enjoyed over the years through your neighbor’s roof and into her living room. In this scenario, normal negligence law should apply. In most cases, your neighbor’s homeowner’s insurance company will be responsible for the loss. However, if you knew or should have known of any pre-existing issues to the tree that made it more susceptible to collapse, you may be responsible. In this case, the homeowner’s insurance company could seek to recoup its losses from you through what is called subrogation.

For example, let us assume the tree is dead or dying from insect infestation that has weakened its stability. In this situation you may be liable to repay the insurance company who satisfied the damage claim, particularly if the deterioration of the tree was readily apparent. On the other hand, if the tree was perfectly healthy or its problems were not apparent, it is unlikely that you would be responsible.

In either case, you would want to turn any claim for subrogation over to your insurance company for a defense and coverage.  Whether your insurance company would provide a defense and coverage would depend on the terms of your own policy.  Insurance policies, as one may suspect, have many exclusions and exceptions to coverage.

Another common issue that arises from trees on property lines concerns encroachment. Perhaps you have grown annoyed from the untrimmed tree that has partially crossed onto your property and obstructed your view or yard space. While a brief consultation with your neighbor may lead to a quick resolution, you are permitted to prune the encroaching portions of the tree. Of course, hiring a professional is recommended to guard against causing damage to the rest of the tree. You should also have confidence in the location of your property line to avoid creating your own issues of trespass and property damage should you remove too much of the tree.

Finally, there are statutory prohibitions on cutting certain trees along municipal streets and highways. In such cases, prior consultation with local authorities is recommended. Wis. Stat. § 86.03

Be sure to read through your home insurance policy carefully. If you have concerns about trees on your property we recommend having an aroborist inspect them.

Stevens Point information on trees on property lines. https://stevenspoint.com/1294/Trees-Between-Two-Properties

Guardianship Training is Now Required

Guardianship Training is Now Required

by | Nov 20, 2023 | Article, Elder Law

As of January 1, 2023, Wisconsin law requires all new individual guardians to complete a state-approved training course. Prior to this year, Wisconsin only required corporate guardians to have formal training. Now every individual who is nominated to be the guardian of a person or of the estate (the assets and finances of the person) must complete training on a variety of topics, and submit a sworn, notarized affidavit attesting that the training has been completed before they can be appointed guardian.

Wis. Stat. § 54.26 sets forth the required areas of training, including the following:

  • The duties and required responsibilities of a guardian under the law and limits of a guardian’s decision-making authority.
  • Alternatives to guardianship, including supported decision-making agreements and
    powers of attorney.
  • Rights retained by a ward.
  • Best practices for a guardian to solicit and understand the wishes and preferences of a ward, involving a ward in decision making, and taking a ward’s wishes and preferences into account in decisions made by the guardian.
  • Restoration of a ward’s rights and the process for removal of guardianship.
  • Future planning and identification of a potential standby or successor guardian.
  • Resources and technical support for guardians.

In most cases, it is a family member who is petitioning for guardianship of a loved one, and they often have misconceptions about what guardianship is or is not. Many are not aware of the responsibilities that they will have as guardian, or that there are a number of ongoing administrative requirements they will be required to complete. The court system is not equipped to provide guidance and advice to guardians on an ongoing basis, which can leave guardians feeling overwhelmed and lacking support. Training for guardians can be vital in helping guardians know what to expect and how to address concerns as they navigate their ongoing role as guardian.

The training must be completed no later than four days (96 hours) before the final guardianship hearing, and must be completed by the nominated guardian of person or estate, as well as any standby or successor guardians of person or estate. The training is free and available as a self-paced, online course. https://www.uwgb.edu/guardianship-training/

If you have questions on guardianships or the required training please reach out to one of our experienced attorneys.

Comparing Commercial and Residential Leases

Comparing Commercial and Residential Leases

by | Nov 6, 2023 | Article, Business, Real Estate

Most individuals must navigate a residential lease at some point in their lives – typically for an apartment to live in before potentially purchasing a home later in life. In contrast, the majority of people will never need to negotiate or enter into a commercial lease – used for renting space to run a business. For those who do, it is important to understand the differences between the types of leases to avoid inadvertently making a bad deal. On the other hand, a business owner who has become familiar with commercial leases and then decides to invest in and rent out residential property should bear in mind the special rules for residential leases to avoid a costly mistake.

All states have some differences between laws governing residential and commercial leases based on the public policy position. While commercial tenants are presumed to be savvy parties operating a business and capable of negotiating and bargaining on an even playing field with their landlord, the average residential renter is unsophisticated and vulnerable to being taken advantage of by better positioned landlords. After all, renters tend to be younger and in a worse position financially than someone who needs to rent a space to operate their privately owned business. A commercial tenant is viewed as another equal player in the economic marketplace who is capable of, and therefore responsible for, the consequences of any contract they choose to enter into.

Wisconsin state law (primarily Wisconsin Statute Chapter 704) is a set of general rules that apply to all leases but that can be altered by contract (i.e. the lease), and then special rules for leases creating residential tenancies. Residential tenancy is further governed by state regulatory code (ATCP Chapter 134) providing more specific rules for residential landlords to follow. The list below highlights some of the major rules applying to residential leases in Wisconsin:

  • Requirement to provide a check-in sheet at the start of a lease which the tenant can make notes of any conditions existing on the premises (Wis. Stat. 704.08).
  • Requirement that leases must contain specific language notifying tenants of certain rights of domestic abuse victims (Wis. Stat. 704.14).
  • Required special notice procedures to remind tenants of deadlines related to automatic lease renewals (Wis. Stat. 704.15).
  • Minimum habitability standards that are generally waivable for commercial leases but required in residential leases (Wis. Stat. 704.07).
  • Certain provisions, when included in residential leases, make the lease void and unenforceable (Wis. Stat. 704.44). The ten provisions listed act as a sort of “guard rail” on the terms of residential leases keeping certain one-sided terms from being imposed on any renters in the state. The prohibition on such terms are not universal, and it is important to review any form leases obtained that are not Wisconsin specific for inclusion of these terms.
  • Strict rules on the receipt of, accounting for, and return of security deposits. (ATCP 134.06).
  • The requirement to highlight and separate out certain terms as “NONSTANDARD” making them easier for tenants to see (ATCP 134, throughout).

In addition to these special rules contained in the Wisconsin state statutes and regulations, certain municipalities also have local ordinances imposing additional requirements. It is important to review any local laws that may provide further restrictions on residential leases.

For Example: Outside of strictly defined differences in legal rights and requirements, residential and commercial leases tend to vary in other ways. The following are typical differences:

  • Commercial leases are generally longer. Typical residential leases are either month-to-month or annual. Such short terms are certainly possible for commercial leases, but three to five years with options to review for longer is more standard. Generally, commercial tenants will want short terms with many options to review, while commercial landlords will want the opposite.
  • Commercial leases more commonly involve the tenant making significant alterations to the property. It is rare for residential tenants to take out walls, install new equipment, etc., but commercial leases often allow tenants to modify the space to suit their business needs. The responsibility for and ownership of these changes should be defined in the lease.
  • Commercial leases tend to have the tenant take on more responsibility for maintaining the property and paying ancillary costs, like property taxes. A common subset of commercial lease is the “triple-net” lease, where, in addition to rent, the commercial tenant pays all of the property taxes, insurance and maintenance costs. Residential tenants pay rent and often pay the cost of utilities, but rarely are asked to directly pay for property taxes, maintenance or insurance costs.

For renters entering into a commercial lease for the first time, understanding the protections they may have benefited from without knowing about it in the course of their residential tenancies is important to fully review and potentially negotiate their commercial leases, where such protections do not apply. No one should ever sign a contract, like a lease, without carefully reading it first. Commercial tenants are exposed to the possibility of terms so burdensome the legislature banned them in the residential setting and thus need to review the lease carefully. For first-time landlords of residential properties, keeping these special rules in mind may be helpful in avoiding a costly mistake. Terms they may have grown accustomed to as “typical” in the commercial setting cannot just be inserted into a residential lease without first ensuring compliance with applicable laws.

In conclusion, whether you are entering into a commercial or residential lease for the first time you should be aware of the laws and rules in your state and local municipality. Please contact one of our experienced real estate attorneys if you have questions.

 

Large Claims v. Small Claims In Civil Lawsuits

Large Claims v. Small Claims In Civil Lawsuits

by | Oct 16, 2023 | Article, General

Most people have heard of small claims court and large claims court, but how do the differences between these two impact the claim that you may have?  Generally speaking, large claims civil lawsuits involve civil claims where the damages are more than $10,000.00, or more than $5,000.00 for a tort claim (such as personal injury or property damage). If you have a claim such as a breach of contract, business dispute, real estate dispute, employment dispute where the damages sought exceed $10,000.00, then this claim must be filed in large claims court. If someone has a personal injury claim such as tort claim and property damage claim in which damages exceed $5,000.00, those claims also must be filed in large claims court.

The process in large claims cases is more involved and more expensive than in small claims court. The filing fee in a large claims is several hundred dollars just to start the case. The litigants must draft their own legal documents to file and to serve in the case (there are no standard court forms for starting a large claims action). In addition litigants in large claims cases must abide by a scheduling order imposed by the court. A large claims case usually involves a lengthy process where parties are required to name witnesses, engage in written discovery and depositions by certain times; there are deadlines for filing motions; the parties are typically ordered to attend a mediation to see if they can settle their dispute. Then, after all of the above are completed, the parties may finally have their chance for a trial in front of a jury or a judge. Because of this more complex procedure involved in large claims cases, most litigants typically retain attorneys to assist in representing them throughout this process. It can take at least 18 months or more from the start of the lawsuit until a trial finally takes place in large claims court.

By contrast, a small claims case can be handled much more quickly and efficiently, and many people handle these cases by themselves in order to save on costs. Small claims court, however, may be used only for certain types of cases, such as the following:

  • Claim for money damages where the amounts do not exceed $10,000.00
  • Claim for property damage or personal injury (tort actions) if the damages sought are less than $5,000.00
  • Eviction actions, regardless of the amount of rent claimed
  • Repossessions of property (replevins) when it is a:

    • – Non consumer credit action or the value of the property does not exceed $10,000.00
    – Consumer credit transaction (personal property that was the subject of a lease or credit from a dealer) where the financed amount is $25,000.00 or less.

  • Evictions due to foreclosure
  • Return of earnest money for purchase of real property, regardless of the amount
  • Actions on an arbitration award for the purchase of real property, regardless of the amount.

Even if someone files a claim in small claims court where the damages exceed $10,000.00, the small claims court cannot award any more than $10,000.00 maximum, plus costs.

Unlike large claims cases, there are sample forms that individuals can fill out to initiate a small claims action. The filing fee is also much less than a large claims case. One of the most significant distinctions between large and small claims court is how fast the case goes through the court system. The entire case can be filed and tried to the Court in only a few months in some instances in small claims court, as opposed to a couple of years in large claims court.

It is important for individuals to be aware of the differences when selecting which court to file in. Seeking the advice of an attorney can be helpful in making this assessment as well as assisting with navigating the legal process.