FOR SINGLE PERSONS OR
MARRIED COUPLES WITH NO TAX PLANNING
I. Introduction. A good estate plan will include planning for incapacity as well as
for death. Objectives of estate planning may include:
A. Determining the appropriate ages and manner of distribution to
B. Naming a primary and alternate personal representative.
C. Name a primary and alternate agent to handle financial affairs in the event
D. Naming a primary and alternate agent to handle health care decisions in
the event of incapacity.
E. Avoiding court supervised probate and/or guardianship through the use of
a revocable trust.
F. Naming an alternate trustee to serve in the event of death or incapacity.
G. Naming a guardian to care for minor children in the event of both parents’
incapacity or death.
A. Probate is the court procedure for transferring a deceased person’s assets
to his or her beneficiaries. The process involves filing initial paperwork
with the court to admit the Will to probate and to appoint a personal
representative. Additional steps involve the filing of an Inventory of the
assets, making distributions and paying expenses and closing the probate
process. The court charges a fee of .2% of the assets ($200 for each
$100,000 of assets). Probate assets are those assets titled in the
decedent’s name alone which do not have beneficiary designations.
B. Guardianship is the court procedure for appointing someone to make
financial decisions and health care decisions for an incapacitated person.
This is a cumbersome expensive process which is easily avoided with the
execution of a Durable Power of Attorney and Health Care Power of
III. Estate Taxes.
Currently the federal estate tax exemption is $2,000,000 per person. Effective
October 1, 2002, the Wisconsin estate tax exemption is $675,000. Accordingly,
couples with combined assets exceeding $675,000 may wish to incorporate
planning to minimize taxes into their estate plan.
IV. The Estate Planning Process.
A. Prepare a Financial Statement. It is important to put together a complete
list of all assets including your home, other real estate, stocks, bonds,
bank accounts, IRAs, retirement plans, life insurance, annuities and
B. Determine Goals and Objectives. The next step is to meet to discuss your
goals, personal situation and concerns.
C. Drafting of Documents – After meeting with you, we will put together drafts
of appropriate estate planning documents to be sent out to you for review.
D. Review and Finalize Draft Documents. You should review the documents
to make sure they are in accord with your wishes and notify us of any
changes that you would like.
E. Beneficiary Designations. New beneficiary designation forms should be
obtained for all life insurance, IRAs, annuities and retirement plans. The
beneficiary designations should either be completed by the attorney or by
you at the attorney’s direction to make sure that they are consistent with
your estate plan.
F. Conference to Execute Documents. Generally the next step is to return to
our office to execute documents and beneficiary designations.
G. Periodic Review. Periodically (every 5 to 10 years) you should review
your estate plan to make sure that it is still relevant to your situation.
Significant changes in assets or your personal situation should trigger at
least a telephone call to your attorney to discuss whether any changes
may be necessary.
V. Documents of an Estate Plan.
A. Will. A Will generally serves as a safety net in a plan which includes a
revocable trust. The Will provides that all assets pass at death to the
The Will will also name a personal representative and alternate personal
representative to settle your affairs at death. Finally, the Will should name
a guardian to care for your children in the event that minor children are
B. Revocable Trust. The purposes of a revocable trust (also known as a
“living trust”) are to avoid probate or guardianship and to provide privacy.
The trust is the main document of the estate plan and includes the
disposition of assets at death. In order to avoid probate, assets are
generally retitled into the name of the trust.
Generally, a joint revocable trust is used for a married couple. The joint
revocable trust is for both spouses’ benefit during their joint lifetimes. At
the first spouse’s death, the assets continue to be held for the benefit of
the surviving spouse. At the second death, the trust provides for the
disposition of the assets to the children or other beneficiaries (either
outright or in trust).
Generally, the client(s) serve as the initial trustee of the trust. The trust
will also name an alternate trustee to handle the management and
distribution of assets when the client(s) die or become incapacitated.
C. Marital Property Agreement. We generally recommend including a Marital
Property Agreement as a key document of an estate plan in order to
provide certainty as to classification of assets at each spouse’s death. In
addition, the Marital Property Agreement can help to avoid probate by
including provisions that allow for the non-probate disposition of assets at
each spouse’s death.
D. Durable Power of Attorney. A Durable Power of Attorney is a document
that names another person to act as your agent (sometimes referred to as
an attorney-in-fact) to handle financial affairs if you are unable to do so
yourself. It is important to name both a primary agent and an alternate
agent in the event your primary agent is unavailable. Often a married
person names the spouse as the primary agent and then someone else as
E. Health Care Power of Attorney. A Health Care Power of Attorney is a
document where you name an agent to make health care decisions for
you if you are unable to do so yourself. Again it is important to name both
a primary and alternate agent. A Health Care Power of Attorney can
authorize your admission to a nursing home, the withholding of feeding
tubes and/or life support and can address any other health care issue that
you so choose.
F. Beneficiary Designations. As discussed above, it is critical to update
beneficiary designations to be consistent with the estate plan. Oftentimes
people only name a primary beneficiary on their forms and neglect to
name a contingent beneficiary.
VI. Cost. Generally our cost for preparing this type of plan is in the range of $1,400
- $1,700. This is for a typical estate planning situation and assumes a normal
amount of conference time and minimal funding of assets. This type of plan does
not include any planning to minimize or avoid estate taxes.