When our lawyers at Kitzke & Canfield, LLC meet with new clients, part of our review process is to inquire if they already have an estate plan in place. Our goal is to ensure our clients’ financial well-being is protected, which is why we always take a close look at existing estate plans to determine if there are any “red flags” that need to be addressed. Most estate plans we encounter that need serious reworking are usually made with estate planning documents that were found online. As a result, crucial information may be lacking that could impact loved ones and beneficiaries.
Here are the red flags we look for to determine if an estate plan is lacking:
Is the Client Relying on a Will-Based Program?
In this situation, the will is the main document overseeing the transfer of the client’s estate to their desired beneficiaries at their death. If your will is the only guiding document in your estate plan, then your assets will have to go through probate. The probate process is not only frustrating, but clients can also end up losing thousands of dollars, as well as their privacy. That is why we advise clients to expand and include other legal documents in their estate plans that will avoid probate.
Does the Client Have Financial & Health Care Powers of Attorney?
In addition to looking at the quality of their wills, we also help clients draft and execute financial and health care powers of attorney. For married clients, we want to ensure that they have the right marital property agreements to avoid traps. We can explain what you need to include in your estate plan to take advantage of Wisconsin’s marital property laws.
Does the Client Have a Living, Revocable Trust?
A basic trust helps clients avoid probate. It ensures tax-efficient distributions by avoiding the tax and other pitfalls of lifetime gifting, and it also provides creditor protection for beneficiaries (including bankruptcy and divorce). Adding a living, revocable trust to an estate plan helps clients avoid the serious dangers and pitfalls of relying on POD, TOD, and beneficiary designations as the sole methods to avoid probate.
Is the Client’s Trust Part of a Will?
There are very rare circumstances in which this is ever recommended, simply because a testamentary trust does not allow the client to escape the probate process. In all other cases, the reliance on the will means probate.
Is the Client Only Relying on a Living Will?
The Living Will is an antiquated document and has been replaced by the Health Care Power of Attorney (HCPOA) for over 20 years.
Has the Client answer “No” to HCPOA Questions?
When the questions in the HCPOA are not marked or marked “No,” it indicates a serious failure to understand the ramifications of that decision and/or receiving poor guidance.
Did the Client Complete the Specific Desires Section in the HCPOA?
It is strongly recommended that this not be done on the power itself, but rather, in a separate writing to avoid vague or confusing language which may cause the family to be forced into a guardianship proceeding.
Do the Client’s Documents Say “Attorney in Fact”?
Estate planning documents should not include the phrase “Attorney in Fact.” This term was removed from statute over 20 years ago.
Does the Client’s Financial Power of Attorney Contain Gifting Authority?
This type of power should be very broad to allow the agent to take emergency measures for Medicaid planning, tax planning, and other issues.
Are the Client’s Documents Out-of-Date?
Clients with documents that are approaching, or already more than, 10 years old, need to reevaluate their estate plan. There have been significant changes in the law, so even great documents should be thoroughly reviewed
Do you need a seasoned lawyer to take a look at your current estate plan? Then please call Kitzke & Canfield, LLC at (262) 387-0706 to schedule your consultation.
Additional Reading: