WILLS & ESTATE PLANNING What is a will? A will is a written document that accomplishes three tasks: 1) it directs the distribution of your property after your death; 2) it states who will care for and distribute that property; and 3) it names someone to care for your minor children. What happens if you die without a will? If you die in Wisconsin without a will, state 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 of your nonmarital property, while the rest of your property is shared equally by all of your children (including children of your current 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 kin will inherit property. The state school fund receives your property only if you die with no heirs. Why is a will important? A will is important because it allows you to: decide who gets your estate when you die; decide who should act as guardian if you die with young children; decide whether your beneficiaries receive their gifts from you outright or in trust; and select a personal representative who will have control over your assets and responsibility to pay bills and distribute your estate. How can a will save money for your estate? Well-drawn provisions reduce estate and inheritance taxes. You also may eliminate the cost of a bond for your personal representative by including a simple clause stating that no bond is required. Clear provisions for minor children help avoid an often costly and clumsy court-supervised guardianship. How can someone challenge a will? A properly executed will can be challenged in court for any of three reasons: 1) the individual executing the will was under duress or undue influence when the will was made; 2) the person was incompetent or unable to understand the results of the will when it was made; or 3) the will was not executed with the proper formalities. Does joint tenancy or life insurance substitute for a will? Either may if the only assets to be transferred are jointly owned property, individually owned life insurance or survivorship marital property (property to which either spouse has the right to full ownership upon the death of the other). Most jointly owned property and survivorship marital property are automatically transferred to the survivor. Insurance policies pay proceeds to the beneficiaries you choose. Before you decide you don't need a will, remember that you may want to name alternate heirs in case you and the joint owner (often a spouse) die at the same time. You also should consider naming a guardian for your minor children, and you may be able to leave your heirs a larger estate by using a will to save on taxes. Where should a will be kept? Your will should be protected against theft and fire in a place where it will be found after your death. A safe deposit box is a common location. You may also deposit your will with the register in probate for your county, if local rules permit this practice. Your personal representative should know the location of your will. How do you change your will? There are two ways to change a will. The first way simply is to execute a new will. The new will replaces all previous ones. The second way is to write a supplement, called a codicil, which amends your existing will. The codicil must be made with the same formalities required for executing the original will. Can you create a trust while you're alive that will control your property outside the reach of your will? Yes. A Living (inter vivos) Trust can be used to control your property during your lifetime. Its terms may allow the trust to continue to control the property after your death. You would need to sign documents giving your property to the trust. For tax purposes during your lifetime that property is generally treated the same as if you still owned it. A living trust can have some advantages and some disadvantages. On the positive side, property held in the trust may not be subject to probate procedures. On the other hand, buying, handling and selling assets may be more cumbersome. You may need to consult an attorney to understand the effect of a Living Trust on your property. What is a durable power of attorney? A power of attorney authorizes another person to act for you. That person is called your agent. A durable power of attorney allows your agent to act for you even if you become incompetent. You can create a durable power that will be effective when you sign it or when two physicians state, in writing, that you are not capable of handling your affairs. This second option is called a "springing" power of attorney. Name only someone you trust absolutely. What can your agent do? Depending on what you say in the power of attorney document, your agent may be able to sign legal documents in your place, buy and sell real estate for you, pay your bills and take other actions on your behalf. What about health-care decisions? Wisconsin law allows you to create a durable power of attorney for health care. Under this law, you give your agent the authority to make health care decisions for you when you are unable to make them yourself. (This information is intended to be viewed as general information. Your individual situation or needs require consultation with the advice of an attorney. Please call or e-mail Leo Beskar, Stu Krueger, Gwen Kuchevar, Ken Pletcher or Maxfield Neuhaus regarding your particular situation, questions or concerns.)