Does Anyone REALLY Need More Than A Simple Will? YES!

07.16.2024

Author:  Attorney Catherine C. Orton

You may wonder if you really need anything more than a simple Will?

The answer is a resounding YES!  In this article, we will explain that all of us need much more than a simple Will for an estate plan. Life has become increasingly complicated!

There’s not one, fixed set of documents which apply to all clients.  The details in each of the documents you may need can differ dramatically because each of your families and your assets differ.  Everyone should meet with an estate planning professional who can guide you through the documents and make sure the documents represent the most efficient and cost-effective way to cover your unique situation when it comes to disability and death.

As you can imagine, one-size-fits-all, pre-printed or internet forms can actually trap you into unintended, serious consequences, or be deemed invalid by the Wisconsin Courts. Wisconsin Law is unique and what works in other states may not be valid here.

Here are some of the documents to be considered in a complete an estate plan:

1.          LIFETIME DOCUMENTS:  During your lifetime, the following are documents which will significantly assist your loved ones in managing your health care and your finances if you should become ill or disabled:

A.     Healthcare Power of Attorney: This document designates someone you have named to make decisions regarding your health care, only if you are deemed unable, by two medical professionals, to make those decisions for yourself. Having this document virtually eliminates the need for a Guardianship, which is a court proceeding that adds substantial complications and expense and requires a judge to name the person who can act for you.

B.      Durable Power of Attorney: This document designates someone you have chosen to pay bills and manage your finances in the event you are ill or disabled.  Again, if properly signed and notarized, this document eliminates the need for a court proceeding called a Guardianship.

C.     HIPAA Release:  This document releases medical professionals from the restrictions of the HIPAA privacy law and allows your medical professional to speak about your medical condition to the loved ones you have chosen.  Such a release is really useful if your children live away and want to check on how Mom or Dad is doing and whether they should come in a health emergency.

E.     Digital Authorization: This document authorizes your representative (agent), trustee or personal representative (executor) to access your online assets and accounts. This document is useful as banks and investment companies seem to move ever closer to eliminating paper statements.

F.     Marital Agreement:  This is a document which sets forth ownership rights between married persons in Wisconsin. For example, such an agreement is especially needed in second marriages to protect pre-marriage assets from the second spouse or his/her children.

2.         Last Will and Testament:  Of course, this document must be executed while you are still competent to do so. A Will directs the distribution of your assets according to your wishes and names the person who will manage and distribute your property (the personal representative) and who will serve as guardian for any minor or disabled children. A Will requires a court-supervised proceeding for payment of debts and distribution of property called “Probate.”

3.          Will with Trust Provisions:  This type of Will contains trust provisions which do not come into existence until your death, and specifically directs that some of your property be held for distribution at a later date, with protection from creditors for minor or disabled beneficiaries.  This type of Will, like #2 above, also allows you to name the guardian for your minor children and the personal representative and trustee who will direct the distribution of your assets according to your wishes as set forth in the Will.

4.          “Living” or Revocable Trust:  This document creates a separate entity (a “trust”) to hold and distribute your property according to your wishes. Such a trust must be set up while you are alive and is more costly and complicated to create because you must transfer assets into such a trust in order to protect privacy and avoid probate. Often, these trusts are used in complex situations to avoid estate taxes.  Even after such a trust is established, the terms of the trust can be changed, so long as the creator is still competent.  One note:  salesmen have been making exaggerated promises about these trusts for years, and fail to follow through in transferring assets, causing serious problems before and after death.  Be very cautious about internet packages and deceptive advertising.

5.         Transfer-on-Death Options: “Transfer-on-death” forms can automatically pass your assets to a beneficiary at death.  However, these provisions should be considered along with other estate planning documents so that you do not cause negative tax consequences or otherwise undo other provisions of your overall estate plan.  These TOD documents are only one aspect of a plan and must be coordinated with your Will and other documents.

Other issues you should review with your attorney are the “title” (formal ownership) to jointly held property, as well as the beneficiaries named on retirement benefits, insurance, annuities, and other assets.  There is a significant tax advantage to making sure the title and beneficiary designations are done in the right way.

Finally, an estate planning attorney can help you understand the potential for “death taxes” which consist of estate taxes, both federal and state, for very large estates.

There are other, much more complicated estate planning tools for large and complex estates, but those techniques are beyond the scope of this article.

Don’t allow one of life’s most important planning opportunities pass you by.  If you want to leave a positive legacy for your family, please seek the guidance of an estate planning attorney.