Category: Estate Planning Blog

Estate Planning is Not a DIY Project

So if you are like me, you take pride in completing a DIY project. Even though I feel a sense of satisfaction when I complete a project, I’ve learned over the years that there is a time and a place for DIY projects and a time for professionals to be called. Often, the risks of incorrectly doing a project outweigh the costs of calling a professional. This holds true for estate planning as well.

Some people think Estate Planning can be a DIY project. These people find online tools and services to complete estate planning documents.  By attempting to use a DIY estate planning tool, people can end up causing more problems.

Over the years, I have helped people who come in after they realized there were problems with their DIY estate planning documents. Some of the problems these DIYers experienced include:

  • Institutions did not accept their DIY power of attorney
  • The online forms were not in sync with Wisconsin laws.
  • Errors were made because they misinterpreted the online forms
  • Unintentionally disinherited assets

These problems ended up costing the DIYers and their beneficiaries more time and money than it would have if they called a professional in the first place. These issues may have been avoided by speaking with an experienced Estate Planning Attorney up front. The role of an Estate Planning Attorney is to be a counselor in explaining your different options and pointing out some of the pitfalls that may be lurking. Computer generated forms are simply not comparable to the customized service and advice that an Estate Planning Attorney can provide.

Legal Documents for Your 18 Year Old

The law says that kids become legal adults the day they turn 18.  So what does that mean?  Yes, they can vote…but what else? When a child turns 18, parents no longer are able to make health care and financial decisions for the child without written legal authorization.

Imagine being a parent of an 18 year old.  Now imagine that the child is in the hospital due to an emergency situation.  Without the proper planning, doctors are unable to share information with you.

Imagine your 18 year old is a victim of fraudulent use of their credit card.  As the parent, since your child is a legal adult, banks will not communicate with you about this.

So what is the solution?

Together, parents and children should review and discuss several important legal documents with the understanding that it’s the child’s right to decide how to proceed. Important documents to review include:

  • Medical Power of Attorney – Gives parents the authority to make medical decisions on a child’s behalf if the child is unable to do so.
  • Living Will – States a person’s wishes about life-extending medical treatment.
  • HIPAA Release –Allows heath care providers to release medical information with designated people.
  • Durable Power of Attorney – Grants parents the authority to sign documents for their child. For example, this allows a parent to manage financial accounts or file a tax return on behalf of the child.

Without these documents, the courts will make decisions for you. Therefore, it is important to have this difficult discussion with your children.

It’s Not Too Late to Protect Assets

People often believe that when they enter into a nursing home, it is too late to do any planning. However, this could not be further from the truth.  The truth is it’s never too late to legally protect assets.

Just the other day, we helped a client who was already in a nursing home. We gifted part of her estate to her family while she remained eligible for government assistance to pay for her nursing home care.

The client entered the nursing home in January.  We were contacted in April in regards to protecting some of her assets for nursing home.  Her assets were around $130,000.00 and kept in money market accounts.  We used a Medicaid Compliant Annuity which allowed her to gift approximately $58,000.00 to her family.  The remainder of the money will go to pay for her nursing home payments for the next 6 months.  During this time period, we will apply for government assistance which will continue making the payments to the nursing home after her 6 moth payment period expires. This example demonstrates that it is never too late to plan for nursing home.

Cases like this happen all the time, people enter a nursing home and loved ones assume that they it’s too late to do any asset protection planning. Don’t assume that it’s too late! Unless your assets are already gone, it’s never too late.

A phone call to learn about asset protection from nursing home costs won’t cost a thing…but not making that call could cost everything.

Protecting the Family Cottage

It’s that time of year…kids are back to school and if you are a family who is fortunate enough to have a family cottage, lake house or beach house, you may be getting ready to close it up for the season.

The family cottage undoubtedly provides numerous memories for your family.  Whether it be boating, fishing, hunting, swimming, or just time away, these memories are cherished. Every family wants to pass on these memories to their children and their grandchildren.  However, many times problems arise when more than one person owns or inherits property.

Continue reading “Protecting the Family Cottage”

The Risks of DIY Estate Planning

Many of us, including me, enjoy the satisfaction that comes from completing a DIY project. This satisfaction is a result of knowing that I completed a project without having to call a professional and that I saved a lot of money. However, all too often, we “DIY-ers” make a mistake, or something goes wrong with the project. Quickly that feeling of satisfaction turns to frustration when realizing that DIY project wasn’t done right and ultimately the project costs are bigger than they would have been if a professional was hired in the first place.

Continue reading “The Risks of DIY Estate Planning”

Selecting a Guardian for Your Children

Tragedy is an unfortunate reality in this world. It could be a drunk driver running a red light, an airplane crash, or a boating mishap that leaves someone’s children without a parent. In such a case, who would raise your children? Will it be a judge who picks that person, or have you taken the steps to name a guardian in your Will or other estate planning documents?

Few decisions in your life will be as hard as choosing the people to act as guardians for your children if you are unable to act. However, as difficult as it can be to imagine other people raising your children, it is probably the most important decision you can make. The guardian will not only be the person who will be responsible for the welfare of your children, but will also be the one responsible for instilling your values in them.

Of all the key players in your estate plan, do you want to leave the decision of your children’s guardian up to the courts? It has been said that if you can imagine the very worst person to raise your child, this is exactly the person the court will appoint. While I don’t know that is true, it is critically important that you decide now who you would want to raise your children.

How do you go about selecting a guardian? Consider these simple questions:

• Is this person physically able to take on the responsibilities? Is the person battling a
serious disease or disabled? Is he/she too old at this point to raise your toddler who
goes non-stop all day?

• Is this person emotionally able to take on this responsibility? Let’s face it, some
people are not built to raise children. Consider if he/she possess the
temperament and patience to raise your child. Furthermore, he/she may not
have yet achieved the necessary maturity to raise a child.

• Is this person’s life stable and consistent? You may not want to pick the person who
is transferred for their job every year, causing your children to constantly be

• Will this person instill your values in your child? If your religious faith is of critical
importance, then you will want to appoint someone who will fully honor those
wishes. However, beyond your religious beliefs, does this person honor your
value system and will he/she teach your child those values?

• Does this person have the financial means to take on the responsibility? Often, you
should be able to provide for your child’s welfare through insurance or other assets.
However, if this person is financially irresponsible, you might run into issues.

While it’s certainly a tough decision, if you think of these questions in selecting your children’s guardian, you will be able to rest assured that if tragedy strikes, your children will be in the best hands possible.

7 Pieces of a Simple Estate Plan

What would happen if I died?  What would happen if both my spouse and I died tragically and unexpectedly? Who would care for my children? Who would provide for them? Where would they live? Would they be able to go to college?  What would happen to all my personal belongings?

No one likes to think of these types of questions. We would like to think that we will take care of those situations and questions “someday” when we get older. Yet, if we do not answer these questions ourselves someone else, like the courts, will answer these questions for us.

When you think of estate planning do you think of a method in which to answer these types of questions or do you envision a concept that brings up visions of summer homes in the Hamptons and palatial estates. At some point in our lives, everyone needs an estate plan, including the person who does not have a large estate. Quite often the concept of estate planning is misunderstood as something only the rich and famous have to do; but every person should have an estate plan in place.

At its simplest level, an estate plan is a number of legal documents that help protect you and your family in the event of your incapacity or untimely death. However, on a deeper level, it is a process that attempts to anticipate future events and then craft a plan so that your wishes are fulfilled.

At its most basic level an estate plan will consist of seven documents

1.      Will
2.      Living Will
3.      Health Care Power of Attorney
4.      Financial Power of Attorney
5.      HIPAA Release
6.      Personal Property Memorandum
7.      Marital Property Agreement

So, why do you need to make an estate plan? Well if you don’t, the State of Wisconsin will make the decisions for you.  I am willing to bet that the State’s plan does not coincide with your plan in every way.  Unfortunately, the State does not know that you would want one of your siblings to care for your minor children.  The State would not know at what ages to distribute your property and the amount of money to distribute to each of your children either.  By creating an estate plan, you could specify specific individuals, specific time periods, and specific amounts of money.  Your money can then be used for your children’s care and not used elsewhere.   Furthermore, under the State’s plan, you may not give any assets outside of the family unit.  If you wanted to leave some money to your favorite organization, you are out of luck.

So with an estate plan, you should do all of the following:

1.      Designate someone to manage your affairs if you become disabled.
2.      Name a guardian for your children if you pass away.
3.      Provide for your minor children or grandchildren.
4.      Reduce or eliminate Income, Gift, or Estate Taxes.
5.      Give away your family heirlooms and sentimental items in a
Personal Property memorandum.
6.      Designate who gets your estate and how.
7.      Reduce the costs and time for administration of your estate.

The above list probably includes some facet of your estate you would want to control.  Since we have established that you need an estate plan, what is the next step?  You probably have some questions? You should give us a call at Epiphany Law and we can answer those questions.  We pride ourselves in making this process as simple and as painless as possible.  We would love to help you navigate these issues and come up with a plan to meet your wishes.  For more information, visit\estateplanningsimplied.

Nursing Home Trusts

Our senior clients frequently express their concern about losing their estate to the cost of nursing home care. Clients usually want to pass some of their legacy out to their children. With nursing home care costing over $80,000 per year, most people end up paying for care out of their savings until it is gone. Once the assets run out, they are entitled to receive some assistance from the government in the form of Medicaid, but by then, it’s too late.

As the possibility of nursing home care becomes reality, people often do their own planning, which can be more of a detriment than no plan at all.  Do-it-yourself planning is often based on a misunderstanding of the rules or is based on the rules as they existed decades ago.  Careful advance planning can help protect your estate.

Generally, Medicaid funds are not available until a person enters a nursing home and their assets are under $2,000.  As most people are aware, Medicaid will look at transfers made within 5 years prior to the application for Medicaid.  This is what is generally referred to as the “look-back period”.  If the need for long term care is not immediate, your house and other real estate can be transferred into a nursing home trust.  While you and your spouse are in good health, the 5-year look back period runs.  Even though the house and other real estate are in the nursing home trust, you will live in the house and use the property as usual.  You will even get to continue to deduct your property taxes.  At the end of the 5 years, the property will be out of your estate and not susceptible to liens from the nursing home, collection from the State, and will not count against you for Medicaid coverage.

This is an important difference from transferring real estate to your kids. We see many people simply transfer their house and other property outright to their children. While this can work to shield assets from nursing home liens and attachments, it does not provide for your future care. As you are relinquishing control of your property if assets are simply transferred to your children, you run the risk of your home or assets being lost to mismanagement, lawsuits, creditors, or divorce.  Often, the loss of funds is not due to any type of wrong-doing by the children, but rather to events happening in their lives that are out of their control. Furthermore, the nursing home trust may have the added benefit of helping your children avoid many of the unforeseen consequences of having assets transferred into their names.   For example, if your children hold your assets in their name, they may run into problems getting eligibility for their children’s educational financial aid.  Furthermore, because the property was gifted to them, your children may also have to pay capital gains on the sale of the real estate when the property is sold.

If nursing home care is a concern, consider a nursing home trust as part of your estate planning. We will be happy to discuss your options with you.

Yours Truly,

Epiphany Law Estate Planning Team


Almost everyone can turn a modest IRA into MILLIONS of dollars for later generations. Take, for example, a typical couple that has a $100,000 IRA during their lifetime and have named their 20-year old son as the sole beneficiary of the IRA. At their deaths, the son will inherit the IRA. Assuming a reasonable rate of return, if he inherits the IRA at age 20, he may receive over $1,700,000 of income over his lifetime – the result of a concept called “IRA stretch”. The “stretch” occurs when IRA payments are prolonged over the longest possible period of time (taking into account the beneficiary’s age), thus reducing taxes and preserving wealth for future generations. In most cases, however, the IRA that is inherited by the son will produce $0.00. Why? Because 90% of all IRAs left to the next generation are cashed out or squandered within one year of receipt. Therefore, more likely than not, the son will have lost this potential million dollar IRA within 12 months.

In most estates, the IRA is one of the largest assets. The benefits of tax deferral and creditor protection, which we have not yet discussed, can be lost at your death without the proper planning. Generally, IRAs are exempt from the IRA owner’s creditors during his or her’s lifetime. However, once the IRA owner passes away, the IRA is available for the beneficiaries’ creditors because it is no longer a creditor exempt asset according to the United States Supreme Court. For example, if mom left an IRA to her son outright, and the son was going through bankruptcy, the bankruptcy court could satisfy the son’s debts with mom’s IRA.

Another risk is second marriages. An IRA can be “rolled over” to a surviving spouse upon the death of the first spouse, and the surviving spouse becomes the owner of the IRA. The surviving spouse is free, then, to change the beneficiaries of the IRA. Upon remarriage, the surviving spouse may name the new spouse as a beneficiary of the IRA. Upon death, the new spouse then becomes the new owner of the IRA and is free to name their own new beneficiaries. If the original owner of the IRA had planned on the IRA going to their children, they are out of luck. Understanding and planning could have ensured this result.

A standalone retirement trust (commonly referred to as an “SRT”) is an under-utilized tool used to overcome these issues. The IRA will, upon death, flow into the third-party trust instead of passing directly to the beneficiary. The beneficiary can access funds, but creditors cannot. Nor can the beneficiary control who ultimately gets the trust funds upon their death. It will continue to grow, thus preserving the potential for that million dollar IRA.

Yours Truly,

Epiphany Law Estate Planning Team

Healthcare POA and Living Will

At Epiphany Law, estate planning is about “peace of mind.” Yes, it is important to ensure that your “stuff” goes where you want it to go and that you pay the minimum amount to Uncle Sam.  But peace of mind also means that you have planned for incapacity and determined who will take care of you if you cannot do so.

The death of Terri Schiavo ten years ago was widely publicized at the time, but today there is a whole new generation of adults who may not appreciate the lessons taught by her unfortunate story.  At the age of 27, Terri Schiavo suffered a cardiac arrest. She was resuscitated, but was diagnosed as being in a persistent vegetative state. A feud ensued between her husband and her parents as to whether to remove Mrs. Schiavo from life support. Her husband insisted Terri would not want to be kept alive under the circumstances, but her parents vehemently disagreed. Mrs. Schiavo remained on life support as her husband and parents battled for 15 years in the court system through 5 federal lawsuits and 14 appeals. Ultimately, the federal court system sided with Ms. Schiavo’s husband, and her feeding tube was removed.

In yesterday’s blog, we covered the importance of a power of attorney for your financial affairs. Today, we talk about a power of attorney in the context of YOU—your body and your health.  Every good estate plan must include a Power of Attorney for health care decisions. Quite simply, in such a document, you name an agent to make decisions for you about your health and medical care if you are unable to. This document should include important considerations such as withholding life support, decisions while you are pregnant, and placing you in a nursing home. Who you should name is obviously a personal decision. Consider someone local in the event of an accident or emergency, who can make decisions under pressure, and can act based on your wishes, not their own.

After you determine who will act on your behalf, the other equally important part of the equation is telling your agent what those decisions should be. The actions of your agent will have real “life and death” implications—for you and for them. If you don’t clearly articulate your wishes and desires, they will make decisions based on their own values, which might not line up with yours. A clear statement of your intentions about life support, for example, can bring a great deal of peace to a tough choice.

Now that you have the pieces, let’s look back at Schiavo story. Terri had taken the first step and designated her husband as her Power of Attorney, giving him the ability to make decisions for her. She did not, however, have a Living Will, and the courts were left to figure out what she wanted, presented through the eyes of her parents and husband. A clear statement of her intentions would have probably stopped the fight before it started.

“Stuff” is important, and having a plan in place ensures accumulated wealth will pass down to the next generation. Health care documents are arguably the most essential piece of the plan. If you don’t have a plan yet, you should.  At a minimum, you should name an agent and let them know how you feel about your medical decisions. If you don’t, a court will do it for you.

Yours Truly,

Epiphany Law Estate Planning Team