It’s never too early to think about estate planning. An accident can change your life without warning. Basic estate planning documents such as a power of attorney or a living will, help your family to have the legal authority to make medical and financial decisions for you if you are unable to make those decisions yourself.
Estate Planning is useful at any age of life. Estate planning allows you to protect your assets and care for your family and friends. At our firm, Attorney Thomas P. Aiello provides comprehensive estate-planning services to families throughout southeastern Wisconsin and northeastern Illinois.
Examples of how your estate planning needs may change throughout your life:
- Everyone should have at least some form of a power of attorney to give a trusted person the ability to make health care and/or financial decisions for them if they are incapacitated or disabled.
- Parents with minor children should have a will or a trust to name a guardian for their children. These documents will also direct how and when children will receive their inheritance.
- People who have accumulated assets such as real estate should consider placing those assets in a trust to save the time and expense of a probate proceeding.
- Parents with a disabled child may wish to create a special needs trust to provide money for their child without making him or her ineligible for government benefits.
- The elderly can use Divestiture Planning to prevent their life savings from being wiped out by nursing home expenses.
Every estate plan is unique and tailored to the needs of the client. At Madrigrano, Aiello & Santarelli we take the time to get to know you so we can devise an estate plan that fits your family and your assets.
Different Types of Estate Planning Documents
A Will is a legal document that specifies how you wants your assets (i. e. property, money, personal items) divided and distributed to loved ones in the event of your death. It may also spells out who should take care of and provide for your minor children. A Will can also detail your wishes regarding funeral arrangements.
Creating a Will allows you, not the Courts or the government, to decide how your assets will be divided. While these decisions are difficult, they are important and can have a serious impact on your family. Having a Will lets you decide who will be the person in charge of your estate (personal representative) and how your children will be cared for so that if you something does happen to you, you will at least have the peace of mind knowing that your affairs will be taken care of.
If you die in Wisconsin without a will, Wisconsin law says that your entire estate will be distributed to your spouse unless you have children from a prior marriage. In that case, your spouse receives half your estate while the remaining half is shared equally by all the children of your prior marriage.
If you do not have a spouse or surviving children when you die, the law lists the order in which parents, brothers and sisters, nieces and nephews, grandparents, grandchildren and other relatives will inherit property. The state school fund receives your property only if you die with no heirs.
You can make your own will if you comply with Wisconsin’s legal requirements regarding witnesses. However, an experienced attorney, like Mr. Aiello, would be able to give you the best advice regarding choices that you make in your will and clauses that should be included in your will to make sure your wishes are followed.
A trust is a legal arrangement whereby a person transfers property ownership to a trustee who is assigned to manage and invest the property to earn income and grow principal. The trustee — another person, bank, or trust company — distributes income and principal to beneficiaries in accordance with the trust’s provisions. Trusts can be broadly classified as either living trusts or testamentary trusts. A living trust is established during a person’s lifetime. A testamentary trust is created by will and comes into being at death.
Health Care Power of Attorney
Wisconsin has no next-of-kin statute delegating decision-making power to family members. If you become unable to make health care decisions, the court will appoint a guardian to make decisions for your benefit. To avoid this situation, a Wisconsin resident must authorize an agent to act on his or her behalf. A power of attorney for health care authorizes the agent to make specific health care decisions in all medical circumstances when the patient cannot.
Estate taxes are a major concern when considering an effective estate plan. In Wisconsin, estates of less than $650,000 are generally not subject to federal estate taxes, although they may be subject to probate. Those who believe their estate will be worth more than $650,000 can take steps to avoid or reduce the estate taxes.
Another concern when preparing estate planning documents is protecting the assets you have built up over your lifetime. Medicaid (Title 19) asset divestiture is the process of preserving your assets while qualifying for governmental benefits to pay for the costs of long-term care.
Medicaid is a government program that pays medical bills for some disabled people and for elderly persons in nursing homes who meet various financial and asset requirements. Medicaid is administered by the states and funded with state and federal money.
A married couple can retain one half (1/2) of marital assets between $52,000 and $101,640 at the time either enters a nursing home and still qualify for Medicaid payment of nursing home expenses. The spouse that remains at home is allowed to keep one half (1/2) of the marital assets with a minimum of $50,000 and a maximum of $101,640. The nursing home spouse is allowed to keep $2,000. A single person can only retain $2,000 of nonexempt assets in his or her name.
Asset preservation is a key component to Medicaid planning. The amount of asset preservation varies from case to case and depends largely on proper planning as well as estate planning documents. Contact Attorney Aiello to advise you as to the issues involved in preserving assets including cases where nursing home admission is imminent.
A law effective on February 8, 2006 requires a five (5) year look back period for any transfer of assets. The look back starts when an individual applies for Medical Assistance so any transfers in the five (5) years prior to that time period may make a person ineligible for Medicaid. The new law also imposes more severe penalties for transfers that occur within five (5) years of the Medical application. If you are in a nursing home or considering a nursing home placement in the foreseeable future, you should not give any significant gifts or transfer any assets without the advice of an experienced Title 19 (Medicaid) divestiture lawyer.