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The Will

    A will provides for the distribution of property owned by you at the time of your death in any manner you choose. Your will cannot, however, dispose of properties that pass outside your probate estate (such as certain joint property, life insurance, retirement plans, and employee death benefits) unless they are payable to your estate.

    Wills can be of various degrees of complexity and can be utilized to achieve a wide range of family and tax objectives. If a will provides for the outright distribution of assets, it is sometimes characterized as a simple will. If the will establishes one or more trusts, it is often called a testamentary trust will. Alternatively, the will may leave probate assets to a preexisting inter vivos trust (created in your lifetime), in which case it is called a pour over will. In either case, the purpose of the trust (as opposed to outright distribution) is to ensure continued property management and creditor protection for the surviving family members, to provide for charities, and to minimize taxes.

    Your will, whether a simple will or a complex will, is personal to you. Your will may do more than simply provide for the distribution of your property. You will may also provide for the following:
    1: You may designate a guardian for your minor child or children if you
           have survived the other parent;
    2: You may designate a personal representative (executor) of your estate in
           your will and eliminate the need for a bond;
    3: You may choose to acknowledge or otherwise provide for a child (e.g.,
           stepchild, godchild, etc.) in whom you have an interest, an elderly
           parent, or other individuals.
    4: If you are acting as custodian for the assets of a child or grandchild
           under the Uniform Gift (or Transfers) to Minors Act, you may designate
           your successor custodian and avoid the expense of a court appointment.


What Happens if You Die Without A Will?

     If you die “intestate” (without a will), Wisconsin’s laws of descent and distribution will determine who receives your property by default. A state's plan often reflects the legislature's guess as to how most people would dispose of their estates and builds in protections for certain beneficiaries, particularly minor children. That plan may or may not reflect your actual wishes, and some of the built-in protections may not be necessary in a harmonious family setting. A will allows you to alter the state's default plan to suit your personal preferences.
What Does a Will Do?

     A will provides for the distribution of property owned by you at the time of your death in any manner you choose (subject to the forced heirship laws of some states that prevent disinheriting a spouse and, in some cases, children). Your will cannot, however, govern the disposition of properties that pass outside your probate estate (such as certain joint property, life insurance, retirement plans, and employee death benefits) unless they are payable to your estate.

     Wills can be of various degrees of complexity and can be utilized to achieve a wide range of family and tax objectives. If a will provides for the outright distribution of assets, it is sometimes characterized as a simple will. If the will establishes one or more trusts, it is often called a testamentary trust will. Alternatively, the will may leave probate assets to a preexisting inter-vivos trust (created in your lifetime), in which case it is called a pour over will. In either case, the purpose of the trust arrangement (as opposed to outright distribution) is to ensure continued property management and creditor protection for the surviving family members, to provide for charities, and to minimize taxes.

     Aside from providing for the intended disposition of your property to spouse, children etc., there are a number of other important objectives that may be accomplished in your will.
     • You may designate a guardian for your minor child or children if you have
          survived the other parent and, by judicious use of a trust and appointment
          of a trustee, eliminate the need for bonds and supervision by the court
          regarding the care of each minor child's estate.
     • You may designate an executor of your estate in your will and eliminate
          the need for a bond; in some states the designation of an independent
          executor will eliminate the need for court supervision of the settlement
          of your estate.
     • You may choose to acknowledge or otherwise provide for a child (e.g.,
          stepchild, godchild, etc.) in whom you have an interest, an elderly
          parent, or other individuals.
     • If you are acting as custodian for the assets of a child or grandchild under
          the Uniform Gift (or Transfers) to Minors Act, you may designate your
          successor custodian and avoid the expense of a court appointment.

     Good planning can also enhance your support of religious, educational, and other charitable causes.


What Types of Assets are not Transferred by a Will?

     A will does not govern the transfer of certain types of assets, called non-probate property (see below), which by operation of law or contract pass to someone else on your death. For example, real estate and other assets owned with rights of survivorship pass automatically to the surviving owner. Likewise, an IRA or insurance policy payable to a named beneficiary passes outside the will.


How do I Execute a Will ?

     Wills are signed in the presence of witnesses and certain formalities must be observed. A later amendment to a will is called a “codicil” and must be signed with the same formalities. In some states, the will may refer to a memorandum disposing of tangible personal property, such as furniture, jewelry, automobiles, etc., which may be changed from time to time without the formalities of a will.


What are the Types of Non-probate Property?

Jointly Owned Property

     If you own property with another person as joint tenants with right of survivorship, that is, not as tenants in common, the property will pass directly to the remaining joint tenant upon your death and will not be a part of your probate estate. (It will, however, be a part of your taxable estate.) Frequently, people (particularly in old age) will cause bank accounts or securities to be placed in the name of the owner with one or more children or trusted friends as joint tenants with right of survivorship. This is sometimes done as a matter of convenience to give the joint tenant continuing access to accounts to pay bills.

     It is important to realize that the ownership of property in this fashion often leads to unexpected or unwanted results. Disputes, including litigation, are common between the estate of the original owner and the surviving joint tenant as to whether the survivor's name was added as a matter of convenience and/or management or whether a gift was intended. The planning built into a well-drawn will may be partially or completely thwarted by an inadvertently created joint tenancy that passes property to a beneficiary by operation of law, rather than under the terms of the will.

     Many of these problems are also applicable to institutional revocable trusts and "pay on death" forms of ownership of bank, broker, and mutual fund accounts and savings bonds. Effective planning requires knowledge of the consequences of each property interest and technique.

Trusts

     The term trust describes the holding of property by a trustee (which may be one or more persons or a corporate trust company or bank) in accordance with the provisions of a written trust instrument for the benefit of one or more persons called beneficiaries. A person may be both a trustee and a beneficiary of the same trust. A trust created by your will is called a testamentary trust and the trust provisions are contained in your will.

     If you create a trust during your lifetime, you are described as the trust's grantor; the trust is called a living trust, and the trust provisions are contained in the trust agreement or declaration. The provisions of that trust document will usually determine what happens to the property in the trust upon your death.

     A living trust may be revocable (subject to change and terminated by the grantor) or irrevocable. Either type of trust may be designed to accomplish the purposes of property management, assistance to the grantor in the event of physical or mental incapacity, and disposition of property after the death of the grantor of the trust.

     Trusts are not only for the wealthy. Many young parents with limited assets choose to create trusts either during life or in their wills for the benefit of their children in case both parents die before all their children have reached an age deemed by them to indicate sufficient maturity to handle property. This permits the trust estate to be held as a single undivided fund to be used for the support and education of minor children according to their respective needs, with eventual division of the trust among the children when the youngest has reached a specified age. This type of arrangement has an obvious advantage over an inflexible division of property among children of different ages without regard to their level of maturity or individual needs at the time of such distribution.

Annuities and Retirement Benefits

     You may be entitled to receive some type of retirement benefit under an employee benefit plan offered by your employer or have an Individual Retirement Account (IRA). Typically, a deferred compensation or retirement benefit plan will provide for the payment of certain benefits to beneficiaries designated by the employee in the event of the employee's death before retirement age. After retirement, the employee may elect a benefit option that will continue payments after his or her death to one or more of the designated beneficiaries. Certain spousal annuities are mandated by law and may be waived only with the spouse's properly witnessed signed consent. The various payment options will be treated differently for tax purposes. Any person entitled to retirement benefits should seek competent advice as to the payment options available under his or her retirement plan and the tax consequences of each.

Life Insurance

If you own life insurance on your own life, you may either
     (a) designate one or more beneficiaries to receive the insurance proceeds
          upon your death, or
     (b) make the proceeds payable to your probate estate or to a trust created
          by you during your lifetime or by your will.

     If the insurance proceeds are payable to your estate, they will be distributed as part of the general estate in accordance with the terms of your will or, if you die without a will, the distribution will be according to the applicable laws of intestate succession. If the proceeds are payable to a trust, they will be held and distributed in the same manner as other trust assets and may also be free of creditors' claims. Insurance proceeds that are payable directly to a minor child will generally necessitate the court appointment of a legal guardian or conservator. This can be avoided by having a trust designated as beneficiary or a custodial account under the state-transfers-to-minors law.

     Insurance plays an important role in estate planning and should be coordinated with all other aspects of your estate plan. The laws pertaining to the taxability of insurance proceeds are complex, however, so it is important that all matters pertaining to life insurance be carefully reviewed with your attorney and insurance advisor.

     The experienced attorneys at Brabazon Law Office work with clients, whether they have a need for a basic estate plans, or the most complex estate plans. Our probate and estate planning attorneys will listen to your concerns to draft a Will or a complete estate plan personal to your wishes and needs. Call Brabazon Law Office today to set up a time to discuss your estate plan. We offer flexible scheduling and are usually able to schedule your appointment within a few days.


Brabazon Law Office, LLC P.O. Box 11213 Green Bay, WI 54307-1213 Phone: (920) 494-1106 Fax: (920) 494-0501 E-Mail: brabazonlaw@msn.com

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