In Wisconsin when you are blending families, estate planning should be a higher priority on your to-do list. The stakes can be quite high if you fail to plan. However with the proper estate plan, you have the ability to protect your children and your current spouse in the event of your death.
Things are just a bit more complicated the second time around.
If you are in your second marriage, you have different things to consider in your estate plan. You are likely a bit older. So, you probably have more assets. One or both of you may have children from a prior marriage. Perhaps you and your current spouse entered the relationship with relatively equal assets. Perhaps one of you brought much more to the marriage. Each blended family is different.
What happens if you don’t plan in Wisconsin?
When a spouse from a blended family dies without an estate plan, it can be shocking to the family to learn how Wisconsin law distributes the assets. What if an individual has children from a previous relationship, marries a new spouse, and dies without an estate plan? In Wisconsin, generally speaking, half of the couple’s assets belong to the spouse. The other half belong to his or her children from the prior relationship.
It may be that you think it is fair for your assets to be split between your spouse and your children. But what if your main asset is the home you live in with your spouse? What if your spouse loses the house because he or she can’t afford to buy out the one-half interest from your children? Or maybe your spouse was independently wealthy and you believe your children should inherit what you brought into the marriage.
Beneficiary designations and joint ownership can complicate the situation – sometimes with devastating results. If you name your spouse as your beneficiary on your bank account, he or she will inherit everything in that account. When your spouse dies, his or her children stand to inherit everything, cutting out your children entirely.
If you are in a blended family, consider what you have in assets, how much you and your spouse brought into the marriage, how the assets are held (for example, homestead vs. liquid assets). And the current financial security of your spouse and your children. Then talk with your spouse. The best approach is to be direct and honest – with yourself, your spouse, and your children. And then consult with an experienced estate planning attorney to ensure that your decisions are properly reflected in your plan.
If you are intentional about it, you can plan in a way that makes sense for you and your Wisconsin, Blended family.
“The best approach is to be direct and honest – with yourself, your spouse, and your children. “
So much of estate planning focuses on the more obvious assets. For example, your home, bank accounts, and investments. But don’t make the mistake of forgetting about your personal property.
It’s unlikely your loved ones are going to want all (any?) of your stuff. Generationally we are all very different. For example, many Millennials seem to be more agile preferring to live minimally, and able to move across the country for an opportunity. Boomers and Gen X are equally as disparate. Think about what your family would really want to safeguard and what they may need to sell in an estate sale for example.
“Estate planning is often about making it simple for your loved ones to manage your affairs.”
Does your health care POA provide guidance for care?
Your health care power of attorney is one of the most
important parts of your estate plan. When we prepare this for our clients, we
include a four-page memo that walks through various questions about your
desires for your health care.
Importantly, we also include discussion topics (if you could plan it today, what would the last day or week of your life be like?). So we consider all of these scenarios with specific questions about which types of treatments you would or would not want. Imagine a serious diagnosis of X disease. Would you want a treatment that would result in severe pain and nausea for 2-3 months? Would you be willing to endure the side effects if the chance of regaining your health was 1%? More than 20%? More than 50%?
We encourage our clients to go through the memo with their named agent to give their agent peace of mind when the time comes to decide about their health care. It’s a tough conversation, but meaningful. As a result you find out a lot about yourself and your loved ones.
The Motley Fool Agrees
“Health care and financial power of attorney documents are the most important parts of nearly every estate plan. How you want to live, and how you want to die, are very personal decisions.”
Do you already have an idea of what you want in your Estate Plan?
Our flat fee pricing structure helps make this option more viable. So if you are on top of things and already have your plan in place, a well-crafted estate plan is a fantastic gift to give.
Planning for your estate and end of life care can fall to the back burner while juggling daily pressures and priorities. However, planning ensures that your wishes are known and followed by your loved ones in the event of a crisis or emergency. Consider these questions when beginning a discussion with family members:
to consider in your Estate plan or conversations with family:
Do you have a will? Where is it? Do family members have access?
Do you have an advanced directive, such as a living will? Or health care durable power of attorney? Where is it?
Who has your power of attorney? Is it the executor of your estate? How can he/she be contacted?
Have you selected a funeral home? Planned or paid for a burial site?
What is the location of essential personal papers?
Dissolution of marriage
Military service records
Where do you keep life, health, property, and long-term care insurance policies?
Where is your checkbook? What bank do you use?
Do you have a safe deposit box? Where is it, and is the key accessible? Do you have a list of contents? And do family members have access?
Have you made a list of investments (savings accounts, certificates of deposit, stocks and bonds, etc.)?
Have you considered including a plan for your digital records and assets in your estate planning for example?
What are the names and contact information of the financial advisers/institutions that have the investments?
Interesting Estate Planning Articles:
The Estate Planning Gift To Give Your Millennial Children In 2019
“For the Gen X and Millennial generations, estate planning might be the last thing on their mind. Overwhelmed by debt and trying to get their day to day financial lives on the right path, the nagging of their parents might make them resistant to following their advice. There’s one thing Boomers can do to ensure their children do the right thing when it comes to estate planning: they can make a gift of estate planning to their adult child”
Bob CarlsonContributorRetirement I research/write about all facets of retirement/retirement planning.
Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich
“Although there are dozens of types of trusts, the most common trust used for these purposes is a revocable living trust. Such a trust allows you—the grantor—to specify exactly how your estate will be distributed to your beneficiaries when you die, and in the process can avoid probate and heartache.”
Thank you for reading! Do you have friends or loved ones who could benefit from this content? Please comment below and consider sharing from our site at the bottom. We would love your comments too! – The Team @ Rebecca Mason Law
We are all grown up now. Many of us are married. Many have kids graduating from high school, some are just starting our families. Most of us have real jobs, retirement plans, life insurance, and own our home. Yet many of us have not started estate planning?
Many of us don’t want to think about something happening, but it does. The best time to do your estate planning is now. Before something sudden and unexpected happens.
With the proper planning, you can name someone to help you with your finances and make health care decisions for you should you become sick or injured and not able to make decisions for yourself. In your estate plan you can also choose who becomes the guardian of your children if you die unexpectedly.
Through beneficiary designations or a carefully crafted trust, you can avoid probate. If you don’t make your own plan, the courts will make the decisions for you.
You have worked hard for what you have. Working with an experienced estate planning attorney, you can protect your loved ones and your assets.
Some people think they don’t need an estate plan because they do not have millions in their estate. This is far from the truth. There are many other reasons to make a plan. If you have minor children, you will want to name the person or persons who will serve as their guardian(s) if something happens to you. Does your child have special needs? You can plan so that they can inherit without losing government health insurance and other benefits. Are you part of a blended family? Without the proper estate planning, you may be surprised how Wisconsin state law divides your assets. Do you own a small business? You can avoid having to probate your business assets with the proper tools.
Estate planning is also more than creating a trust or a will.
A comprehensive estate plan includes power of attorney documents that set forth your wishes for your medical care and financial interests if you become incapacitated and names an agent who will ensure your wishes are followed. These documents are some of the most important parts of your estate plan. In Wisconsin, no person – not even your spouse – has the legal right to be involved in your medical decisions or even know about your medical needs if you are incapacitated. You can give someone those rights by naming as your agent in your health care power of attorney.
It is the same for your adult children. Once your child turns 18, you need to be named as their agent in order to be involved in their care. Similarly, no person has the legal right to assist with your financial matters. The documents you need to include in your estate plan will depend on your particular goals and assets. Along with minimizing taxes and fees, effective estate planning can provide guidance, peace of mind, and lessen burdens for your loved ones.
We are about half-way through this years Tax season. Did you know the recent changes to the tax laws may impact your estate plan? These changes may have not been anticipated when you created or last reviewed your plan.
A well-crafted estate plan can help minimize estate taxes. And strategically handle your assets when you pass. But these documents can become outdated. Especially when there are significant changes to the law, to your assets, or to your family.
Even if you are not affected by the changes to the tax laws during this years tax season. While you are gathering your financial paperwork from the last year to give to your accountant. You can use many of those same documents to make a list of the current state of your assets – such as bank accounts, investments, life insurance, real estate, etc.
The list of your assets will inform and direct your discussion with your attorney, allowing you to compare this information to what you had when you executed your last estate plan. If you have never executed an estate plan, you can use the information to begin the process of creating your first estate plan, during this years tax season.
A frequent question from our clients (likely because our community is located on the beautiful shores of Lake Michigan) is whether you can have your ashes scattered over the lake. The answer? You can! subject to some restrictions.
That said, there are many meaningful ways for your loved ones to honor you. And at the same time provide some closure. Even many we have never heard of. This article explores some of the more unconventional options.