Making Life After Death a Little Easier
By Bob Moeller
WEAC Member Benefits
January 2002
Financial
Planning Seminars
Achieving
Financial Independence
This article is about the things you and your relatives can do to make
life easier for family members when a death occurs. It is about simple
estate planning. Most members do not need complicated trusts. Most don’t
even need a simple “living trust,” although we will talk about
that. I meet too often with members who say their parents “won’t
even talk about their finances.”
Usually, but not always, it is the father who keeps the silence, even
if he is in poor health. It’s almost like the parent wants to ignore
the needs of his spouse and/or children. If you have that problem with
parents, show this article to them.
Ideally, when you die, you want an orderly passing of the family wealth
with minimal hassle, minimal taxes, and minimal family bickering. You
want maximum understanding by your family of assets, debts, etc. This
is not difficult to achieve if you make some preliminary arrangements.
Also, with the legal forms WEAC will provide you at no charge, it is essentially
not going to cost you anything. Here’s how you might approach it.
Note: This article assumes you and your family members trust each other.
If not, try to deal with that first.
- Parents should have an open discussion with their family as to the
basic financial situation, their intentions when they die, and their
wishes regarding burial, etc. They should complete the forms reviewed
in the sidebar. In addition, members also should have this discussion
with their families, particularly if they are past middle age, and particularly
if they have adult children or grandchildren. To the degree possible,
wishes such as the type of funeral should be put in writing, dated,
signed, and kept with the other papers. Families will function much
better when wishes and finances are known.
- All adults should have a will. WEAC will provide you with a will form
for single members, married members, or divorced members with dependents.
I encourage you to make extra blank copies. These are simple will forms.
If they do not seem to do what you wish, you may have to seek legal
assistance.
The rule regarding individual wishes is as follows: Essentially, you
can put the will in any form with all the special bequests you want,
with no concern regarding the legality of it so long as the will is
not challenged. So, assuming you have one or two simple items not likely
to be challenged by anyone, go ahead and write them on the form and
initial them. Don’t get carried away with lots of complicated changes.
If they conflict with other clauses of the will, or if they might be
challenged, see an attorney.
- WEAC will also provide, free of charge, the following forms, all of
which are exactly as prepared by the State of Wisconsin (see sidebar).
If you or your parents live in another state, contact that state for
the forms.
• Wisconsin Basic Power of Attorney for Finances and Property.
• Wisconsin Power of Attorney for Health Care Document.
• Declaration to Physicians (Wisconsin Living Will).
You do not need an attorney to fill out these forms. Once signed and
witnessed, (the Basic Power of Attorney for Finances and Property needs
to be notarized), you may change or cancel them at any time. You do not
have to file them with an attorney, or the state, or your doctor. You
will probably want to give your adult children a copy of your wishes,
and keep a copy in a location where everyone knows where it is. By completing
the forms and putting your wishes in writing, you are helping your survivors
cope with the estate and your care. Don’t put it off. Don’t
let your parents put it off.
Living Trusts
You frequently see ads from attorneys recommending the use of a living
trust along with the three forms discussed above. A living trust avoids
probate. That’s all. It does not shield your assets from nursing
home claims. It does not save you any taxes. It avoids probate by passing
the property to heirs through the trust. Most members do not need a living
trust because there are other ways to pass assets simply:
- Joint ownership with survivorship. Understood by all, this form of
joint ownership has no probate.
- Beneficiary designation, as on life insurance policies and your retirement
assets. Also well understood.
- Pay on death. Simply put, POD is where you instruct a bank, mutual
fund, brokerage house, etc., that if you die, you want your account
paid out per your instructions, which you give the bank. For example,
I might tell my bank effectively, “I do not want to put my son
as joint owner of this account, but if I die, I am instructing you to
give the account to my son if he presents a death certificate.”
This is a simple, quick, free way to dispose of your invested assets.
Typically the bank, mutual fund, broker, etc., will either accept a
letter from you, or have you complete a form. Just ask them.
After using the three methods above to pass assets, if you still think
you want a living trust, first go to the library and do some research.
Many books have the forms in them, but there are asset registration requirements
that must be followed.
If your estate is more complicated and you feel you need an attorney,
first write down exactly what you hope to accomplish in terms of income
to someone, disposal of assets, etc. Get an attorney who specializes in
trusts and estates, and/or elder care, depending on your specific needs.
The first meeting may very well be free. Ask the attorney how much it
is going to cost to have the work done. Don’t just set yourself up
for whatever charges the attorney wants to send. I don’t recommend
giving an attorney any authority in administrating your will or trust.
Posted Janaury 14, 2002