Frequently Asked Questions (FAQs)

You might not know what options are available to you. You might not know where to begin. You might feel overwhelmed. The attorneys at Christenson and Allex have put together this list of questions and answers to help you assess your own situation and determine what might be of help.

Estate Planning - General

September 2011

2011 was going to be my year to get my estate plan in order. Fall is now here, and I have done nothing to make this happen. Is it too late?

Not at all. Whether you are single, married, have kids or take care of an elderly parent, putting together an estate plan is a good idea and may not require much time. Working with a qualified attorney can streamline the process by helping you to identify your estate plan goals. The attorney can then draft documents, such as a Will and Powers of Attorney, to help you meet your goals. For assistance with this or other legal matters, please contact the Law Offices of Christenson and Allex, LLC.

July 2011

What is "probate" and why do people say I should "avoid probate"?

"Probate" is a court supervised process used to settle an estate when assets can't be directly transferred to a beneficiary or a joint owner of an asset. The court that handles this process is called "Probate Court." In some cases, using the Probate Court process is neither expensive nor time consuming. When the estate is small and the beneficiaries are cooperative, a probate case can be completed quickly and cost less than some probate avoidance techniques. In other situations, such as when family members can't agree on division of the assets and a commissioner or a judge has to intervene to settle the dispute, the process can be very expensive and time consuming. If you think settlement of your estate will be contested, you should consider avoiding probate through the use of a revocable trust and other strategies.

February 2011

Have laws affecting estate planning changed significantly in the past two years?

Three major changes in the law have occurred that could potentially affect your estate plan. The Domestic Partnership Law went into effect in 2009 and has a significant impact on unmarried couples. The Power of Attorney for Finances statute was completely revised in September of 2010 and affects everyone who has named a financial agent. The 2010 Tax Relief Act was signed in December of 2010 and affects anyone who is concerned about estate taxes, gift taxes, capital gains taxes or income taxes on IRA accounts. So, if you haven't reviewed your estate plan in the past two years, you should consider a quick review in 2011 to take advantage of the changes in the law that may affect your plan.

September 2010

How do I start a conversation with my elderly parents about their estate plan without offending them?

If your purpose in wanting to talk with your parents is to be helpful, it will be easier to open the discussion if you have completed your own estate plan. You can then talk about why you decided to "get things in order" and how you felt about the process (e.g. it took less time and didn't cost as much as I thought it would.) If they haven't left the room, or hung up the phone, you may just ask them if they have completed the same Power of Attorney forms you completed. Asking about these forms should be less threatening than asking for specific financial information.

June 2010

Recently, my father passed away. We had a tough time trying to figure out what he owned, what he owed and where his assets were located. I don't want to leave my loved ones with the same situation. What should I do?

It a good idea to periodically review and organize your important documents. You should keep your documents in a safe place, but let your loved ones know where those documents will be kept. In addition, you should create a comprehensive list of who to contact in the event of your disability or death (including key advisors) and the passwords to any internet accounts that you have. The time that you spend getting and keeping your affairs in order will be invaluable to your loved ones upon your disability or death. For this and other estate planning assistance, please contact the Law Offices of Christenson and Allex, LLC.

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Estate Planning - Wills

August 2011

What arguments could be used to challenge the validity of a Will?

An argument could be made that the Will wasn't witnessed properly. In Wisconsin, the signature of the testator (man) or testatrix (woman) on the Will must be witnessed by 2 adults, and the witnesses must both be present at the time the Will is signed. Other challenges could be undue influence or lack of capacity. An attorney who is assisting a client in executing their Will should follow standard procedures to be sure the Will is witnessed properly and the client understands the document. Of course, the attorney should also carefully assess the circumstances surrounding the creation of the Will to make sure the client is not being pressured by someone to create a Will that favors certain people or organizations.

March 2011

I would like to make sure that my affairs are in order so I am considering having a Will prepared. Will this be enough?

Having a Will prepared is a good start, but thorough estate planning involves more that just preparing a Will. A comprehensive estate plan includes coordinating the distribution of all of your assets after you die, i.e., property subject to probate, retirement accounts, life insurance, payable on death accounts and property that you own jointly with another person; and planning for your incapacity. This means that, in addition to a Will, you should consider having prepared powers of attorney for health and financial matters and a living will. In addition, you may want to consider purchasing long term care insurance to cover the costs of assisted living or nursing home care should you become unable to safely care for yourself. If you need help with these matters or have other legal questions, please contact the Law Offices of Christenson and Allex, LLC.

October 2010

I have two cats and I live alone. I am worried that they will not be taken care of should something happen to me. What should I do?

First, talk with your family and friends to find out who would be able to care for your pets should something happen to you. Second, write down who has agreed to care for your pets along with instructions for the care of your pets so that your family and friends will know what to do. Third, you may want to consider including a section in your Will that distributes your pets along with a sum of money to the person who had agreed to care for your pets so that they will have sufficient resources to do so.

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Estate Planning - Beneficiary Designations

August 2010

There has been so much upheaval in the financial services industry. I think that the company that I purchased my annuity from many years ago was bought by another company. Should this concern me?

Yes. Unfortunately, sometimes certain important documents, such as beneficiary designation forms, can get lost or misplaced during a transition. This may lead to unintended distribution and/or income tax consequences after a person has died. If there has been a change in ownership of the original company where you purchased your annuity, you should contact the new company and request a copy of your beneficiary designation form. This will let you know if the company still has the form and, if so, who your named beneficiaries are. If you find out that the company no longer has the form or you wish to name different people than are currently listed on your form, you will be able to complete a new one.

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Estate Planning - Financial and Health Care Powers of Attorney

November 2011

If my mother's Power of Attorney for Health Care has been activated, should I assume that she can't sign a new Power of Attorney for Finances and Property?

No. Your mother may be declared incapacitated for the purpose of making health care decisions, but she may still have the capacity to complete a Power of Attorney for Finances and Property. An attorney who drafts the Power of Attorney for Finances and Property will be able to make an assessment as to whether your mother has the capacity to sign that type of document. The attorney will need to ask your mother a series of questions to determine if she understands the form, knows what she owns and is consistent in expressing her wishes about who should act as her agent. However, if the attorney believes she lacks the capacity to sign a Power of Attorney for Finances and Property, she will likely need a court-appointed guardian of the estate.

September 2011

Can I appoint both of my daughters as my health care agent(s) to act together in all of my health care decisions?

No. You can't appoint co-agents on a Health Care Power of Attorney form because the law that controls this form doesn't allow co-agents. You can appoint one of your daughters as the first agent and the other daughter as the alternate, however. You should discuss your wishes regarding health care with your daughters before appointing either of them. You'll want to make sure that they are willing to make decisions that match your wishes.

July 2010

I heard from a friend that Wisconsin changed its statutory Power of Attorney for Finances and Property form. Is that true and do I need to revise mine?

Recently, Wisconsin adopted the new Uniform Power of Attorney for Finances and Property Act. The Act takes effect September 1, 2010 and includes, among other things, an updated statutory power of attorney form. If you have a Power of Attorney for Finances and Property that was properly executed before the Act's effective date, your Power of Attorney will remain valid. If, however, you would like to take full advantage of the Act's new provisions, you should have your Power of Attorney for Finances and Property reviewed by a knowledgeable attorney and possibly modified to accommodate the new provisions of the Act.

June 2010

How will the new Power of Attorney for Finances law affect me if I already have a Power of Attorney for Finances?

The new Power of Attorney for Finances law (Chapter 244: Uniform Power of Attorney for Finances and Property) goes into effect on September 1, 2010. The new law doesn't invalidate prior Power of Attorney forms. However, the new law includes rules that govern all powers of attorney (for finances). If your power of attorney does not specifically cover an issue or is unclear about a particular issue, the new Chapter 244 will be the default that you, your agent and anyone who accepts the power of attorney will have to follow. The new statutory form will be available online after September 1, 2010 at: www.dhs.wisconsin.gov/forms/AdvDirectives/index.htm. Before using the statutory form or any other online form, consider consulting with an attorney to determine if you need a form that includes long term care planning language or tax planning provisions. A power of attorney for finances can be a very powerful tool to assure your financial security and protect your estate planning goals.

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Elder Law and Medicaid Planning

October 2011

I am running out of money to pay for assisted living costs, and I am the widow of a veteran. Are there any VA benefits that could help pay my assisted living costs?

Yes. There is a benefit that many people are not aware of called "Aid and Attendance" -- a type of VA pension. This benefit may be available to you if you meet the income and asset criteria and if your spouse was a veteran who served at least 90 days of active-duty service with at least one day during a war-time period. The amount you could receive may cover the difference between your income and the cost of assisted living. You also need to be aware that the rules that apply to VA benefits are quite different from the rules that apply to Medicaid benefits, so you'll want to talk with an Elder Law attorney who assists clients with Medicaid Applications and has maintained their accreditation with the VA.

November 2010

If my spouse is receiving Medicaid benefits to cover long term care costs, can I change my Will or beneficiary forms?

Yes. After your spouse is found eligible for Medicaid benefits to cover long term care services, you should be able to change your Will or beneficiary forms. Be careful! You will need to create or amend a Marital Property Agreement to classify your assets, if you plan to leave some or all of your assets to people other than your spouse. If your spouse is unable to sign the new document, an agent under your spouse's Durable Power of Attorney may have the power to sign on behalf of your spouse. If not, the Court could authorize creation or amendment of a Marital Property Agreement in response to a special Guardianship Petition.

October 2010

Before I agree to act as someone's financial agent, what should I ask?

Before agreeing to act as a financial agent for a friend or a relative, you should ask to see a draft of the Financial Power of Attorney (FPOA) form. You'll want to check the form to see when you actually start acting as the "agent." One type of FPOA says that your authority as "agent" doesn't begin until the person's physician or a psychiatrist says that the person lacks the capacity to handle his or her financial affairs. This type of FPOA is called a "Springing Power of Attorney." The other type of FPOA is effective immediately and doesn't require a physician or psychiatrist's opinion about the person's capacity. This second type of FPOA is used quite often because it is so convenient. However, a form that is effective immediately can leave you wondering when you should step in and start handling the finances. You'll want to clarify exactly when the person who is appointing you to act as his or her "agent" expects you to begin helping or wants you to take over all of the tasks.

September 2010

I am thinking about becoming an organ donor. How do I do this? Also, I have poor eyesight and diabetes. Will this prevent me from being able to donate?

First, tell your family that you wish to donate your organs upon your death. If you have a Power of Attorney for Health Care, make sure that your agents also know your wishes. Second, sign the back of your driver's license or Wisconsin ID card. Third, make sure that your Power of Attorney for Health Care indicates your desire to become an organ donor on the section entitled "Anatomical Gifts." Don't let poor eyesight and diabetes prevent you from indicating your desire to be an organ donor. After your death, a medical evaluation will be done to determine what organs are suitable for donation.

August 2010

Is it necessary to have a Service Contract with my son if he is going to do some work on my home and I think that someday I may need to apply for Medicaid?

Yes. A recent ruling by an administrative law judge (MEH Decision MDV 16/107) makes it clear that you'll need to prove that the money you paid to your son was not a gift and therefore a "divestment." To prove the payment was not a gift, you should have a Service Contract that was signed BEFORE you paid your son. In the past, some attorneys would rely on an MEH rule that allowed payments to relatives without a contract if the payments were considered reasonable for the type of work being performed (for example, caregiver services, remodeling work, etc.). This recent ruling leaves no doubt that payments to relatives will be considered gifts, even if the payment is reasonable and the amount is low. The solution is to seek the assistance of an elder law attorney to draft a Service Contract between you and your son.

July 2010

If I agree to act as someone's Guardian or Financial Agent, will I be held personally liable for that person's bills?

No, you won't be expected to pay the bills of the person who appointed you to act as his or her agent from your funds or need to worry about that person's creditors being able to claim your assets. However, there are rules you must follow as an agent (also referred to as a fiduciary). If you violate the rules for fiduciaries, there could be civil penalties. Some improper actions taken by a financial agent could even result in criminal penalties. If you are ever unsure about your responsibilities as an agent, you should consider hiring an attorney to provide you with advice related to your fiduciary role.

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Planning for Family Members with Special Needs

June 2011

My child is 17-1/2 and he is mentally disabled. When can I apply for SSI benefits and start the guardianship process?

You can start the Guardianship process now and you can submit his SSI application one month before he turns 18. It is advisable to start these processes before he turns 18 to avoid any delays in setting up the Guardianship and any loss of benefits that he'll be entitled to receive. Before starting the Guardianship process you should consider whether your son needs both the Guardian of the Person and the Guardian of the Estate. If your son's limitations are mild, he may not need both types of Guardians. For example, an alternative to Guardian of the Estate could be an "agent" under a Durable Power of Attorney.

May 2011

My daughter is legally competent but she has a disability that creates challenges or even roadblocks for her when she tries to handle all of the tasks involved in pursuing an education beyond high school. Can she appoint me to act as her "agent"?

Yes. Your daughter could sign a "Special Durable Power of Attorney for Matters Concerning Education" and appoint you as her agent. She could also appoint an alternate agent. This form covers tasks that the other Powers of Attorney (financial or health care) don't cover. For example, you would be able to have access to school records and other personal education information and be able to negotiate with service providers for reasonable accommodations for your daughter. By giving you the authority to handle tasks that could be overwhelming to your daughter, she'll be able to focus on her course work and maximize her chances of success as a student.

April 2011

As the parent of a special needs child I often feel overwhelmed trying to stay up-to-date with all of the information that will affect my child's financial future. What do you suggest?

Staying up-to-date in all areas of the law and financial matters that could possibly affect your child's financial future is only possible if you find a way to network with other parents who are dealing with the same issues AND consult regularly with your "team" of professionals who focus in the areas of estate planning, guardianship, trusts and financial planning. Trying to "go it alone" is a recipe for frustration and failure. There are so many programs and rules to become familiar with that it would take years of study and you don't have that kind of time. You need to know how to protect your child's financial future now. Our office offers free workshops on these issues. See our News & Events page for announcements of these workshops.

May 2010

Our developmentally disabled child turns 18 years old soon. What should we do to make sure we, as his parents, can continue to make decisions on his behalf and protect him from people that could take advantage of him financially?

You can file for Guardianship of both the "Person" and the "Estate" before he turns 18 so the Guardianship would be in effect on his 18th birthday. As Guardian of the Person you could make decisions, on his behalf, about living arrangements, health care and many other non-financial decisions. As Guardian of the Estate you could make his financial decisions, and protect him from being coerced into purchases or contracts that he cannot afford. In addition to acting as his Guardian, you should consider setting up a Special Needs Trust to protect assets that he may inherit from you or other family members. A Special Needs Trust can hold assets of any amount and pay for expenses that his disability benefits or medical benefits don't cover. An Elder Law attorney can assist you with the Guardianship process and creating a Special Needs Trust for your child.

May 2010

What should I think about when choosing a guardian for my child?

There are two types of guardians that can be named if a child's parents are dead or incapacitated: Guardian of the Estate and Guardian of the Person. A Guardian of the Estate is responsible for the child's finances, while a Guardian of the Person is responsible for the health and well-being of the child. Different people can be chosen for each job and an effort should be made to match the attributes of the person with the job. In addition, consideration should be given to naming people with similar values to your own, who are financially stable, and who will be able to take care of your child through to adulthood. It is also important to talk with the people who you would like to serve as guardian prior to naming them as such. Finally, once you select a guardian for your child, it will be necessary to talk with an attorney to make sure that your selection is legally binding. For assistance with this and any other estate planning matters, please contact the Law Offices of Christenson and Allex, LLC.

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Taxes and Gifting

July 2011

Earlier this year, I learned that the Federal estate tax laws had changed. I just found out the Federal gift tax laws changed too. I thought that I could not give any more of my farm to my kids without paying gift taxes, but now I hear that I can make more gifts without paying taxes. Is this true?

Yes. Effective January 1, 2011, the law changed to allow any person to gift up to $5 million during their lifetime without paying a current federal gift tax. This increase (up from $1 million) is scheduled to end on December 31, 2012. Although Congress may decide to extend the $5 million lifetime gift tax exemption, we do not know if they actually will. If you would like to make additional gifts of your farm or other assets and not pay gift taxes, it is best to make the gifts now to take full advantage of this opportunity.

January 2011

I heard the 2010 Tax Relief Act passed in December. Can I relax now, if my estate is less than 5 million?

You can relax for two years. The 2010 Tax Relief Act passed in December but will expire on December 30, 2012. During this 2 year period, estates less than $5 million will not incur a federal estate tax. The tax rate on larger estates has also been held to 35% on the amount greater than $5 million. This is a dramatic change from the $1 million exclusion amount and the 55% tax rate that was scheduled for 2011 if Congress failed to act. The 2010 Tax Relief Act also provides relief from gift taxes for gifts up to $5 million, if the gifts are made during the next two years. If the changes in the gift and estate tax rules don't affect you, perhaps the changes in the basis rules, the ROTH IRA conversion rules and the rules regarding transfers to charities from Traditional IRA accounts could have an affect on you. I would recommend that you review your estate plan and discuss the opportunities created by the 2010 Tax Relief Act with your attorney.

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Small Businesses

August 2011

I recently started a business with my friend. On the advice of our accountant, we formed a limited liability company and applied for a Federal Tax ID number. Are there additional steps that we should take to get ourselves up and running?

Yes. Although the nature of your business will influence what you do next, one step you should take is to adopt an Operating Agreement. An Operating Agreement governs the internal management of a limited liability company and covers such topics as member rights/obligations, admission of new members, and whether a membership interest can be transferred. It may also include alternative dispute resolution procedures to help avoid court involvement should you and your friend disagree about an issue.

November 2010

I am starting a new business and would like some advice as to where to start.

One of the first questions that you should answer is what kind of legal form your business is going to take. The legal form of your business will affect how much you pay in taxes, who can invest in your business, and whether your personal finances will be at risk. Some of the legal forms that you could use include: sole proprietorship, partnership, limited liability company, or corporation. As you can imagine, each form has its advantages and disadvantages.

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