June 7, 2023
by Troy Schneider
Many people, including farmers and their families, avoid putting together an estate plan. But everyone — whether young or old, rich or poor, married or single — should have an estate plan. As Benjamin Franklin said, “The only certainties in life are death and taxes.”
The following are some of the questions people ask while trying to avoid completing an estate plan:
Won’t my spouse get my property anyway? If you die without a will or trust, the intestacy laws will determine how your assets are distributed upon your death. In a nutshell, the intestacy laws are the default “will” contained in the Wisconsin statutes. If you have only been married once and only have children from that marriage, the intestacy laws provide that all your assets will pass to your spouse.
The disadvantage of relying solely upon the intestacy laws is the possibility of having to transfer assets upon death using probate. Any assets that do not have the ability to have a beneficiary listed (like cattle or feed, for example), or assets for which you have failed to list a beneficiary designation will need to be transferred using probate proceedings. The disadvantages of the probate process are that it takes time and costs money. All assets passing through probate are subject to a 0.2% inventory fee. In addition, the assets will be listed in a court document called an inventory and made a public record.
However, spouses can avoid probate on the first spouse’s death by using a marital property agreement. In this agreement, you may choose to classify property as “survivorship marital property,” which assures that all property passes to the surviving spouse without the need for probate.
I am young and don’t have many assets. Why do I need an estate plan? Anyone who is over age 18 should have powers of attorney in place, even if they own a limited number of assets. In Wisconsin, there are two types of powers of attorney: health care and financial.
A health care power of attorney gives your designated agent the ability to make health care decisions on your behalf when you are unable to do so. The health care power of attorney document can also contain (either within the document itself or as a separate document) a “living will” or “advance directive,” which will address life-prolonging medical treatment. If you do not have a health care power of attorney and do not have the ability to make health care decisions for yourself, then your family would need to go to court to have a “guardian of the person” appointed, which requires both time and expense.
Likewise, a financial power of attorney gives your designated agent the ability to handle financial affairs on your behalf when you are unable to do so. If you do not have a financial power of attorney, then your family would need to go to court to have a “guardian of the estate” appointed, which again requires both time and expense.
Can’t my kids just figure it out? There are a number of reasons why everyone, especially farmers, should have an estate plan. First, there are essentially three methods to transfer assets upon death: intestacy, will or living revocable trust. It is important that you and your advisers choose the appropriate vehicle, rather than the courts, to avoid probate or minimize taxes.
Second, for farmers, creating an estate plan is the time for you to start discussing the important questions regarding what share of your assets you want to go to the farm children vs. the nonfarm children. The estate plan can give the entire family peace of mind to know what is going to happen, why and how.
Doesn’t estate planning cost a lot? Estate planning, by its nature, often involves a number of documents. However, these documents are forms that are updated based upon changes in the law and the experiences of the attorney implementing the forms. That said, estate planning does not need to be expensive if a trustworthy attorney is using the appropriate documents for the appropriate circumstances.
Estate planning has many components, but it does not need to be a complicated process. Getting started is the key. Find an attorney to work with who has a good reputation and whom you trust.
Schneider is a partner in the ag law firm Twohig, Reitbrock, Schneider and Halbach. Call him at 920-849-4999.
Read more about:Estate Planning
You May Also Like
Current Conditions for
New York, NY
Enter a zip code to see the weather conditions for a different location.