The Basics of Estate Planning

By: Attorney Kathy Bach

A good estate plan will include planning for incapacity as well as for death.  For clients that are still working, the chance of becoming disabled is significantly higher than the chance of dying.  Accordingly it is just as important to make sure you have a Financial Power of Attorney and a Health Care Power of Attorney as it is to have a Will and/or Trust.

The main documents of a good estate plan include the following:

Will: 

A Will provides for the distribution of your assets at death – Wills do not avoid probate (court involvement).  If a revocable trust is part of the plan, the Will provides that all assets are added to the trust.

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 involved.

Revocable Trust:  

We often use a revocable trust (also known as a “living trust”) as the main document of an estate plan to avoid probate and minimize estate taxes. A revocable trust may be changed or revoked during lifetime.  Generally, a joint revocable trust is used for a married couple. 

You would typically be the initial trustee(s) of the trust – during your lifetime there are no restrictions on the trust assets – you continue as is. There is no special tax return needed.  Your assets would typically be titled in the name of the trust or payable to the trust at your death. The trust will name an alternate trustee to handle the management and distribution of assets when you die or become incapacitated.

The trust will provide how the assets will be distributed at your death.  For example, the trust might include some bequests to grandchildren or charities.  Typically the balance passes to your children.  Options for the children include:

• Outright distribution to responsible adult children.
• A continuing trust for the children with dstributions at certain ages such as one-half (1/2) at 25 and one-half (1/2) at 30.
• Lifetime trusts for adult children designed to protect the assets in case a child gets divorced.

Durable Financial Power of Attorney:  

A Durable Financial Power of Attorney is a document that names another person to act as your agent to handle financial matters 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.  

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.  A Health Care Power of Attorney can authorize your admission to a nursing home, can authorize the withholding of feeding tubes and other life support and can address any other health care issue that you so choose.  You have the right to decide what powers to grant and the POA only becomes effective if you are incapacitated.

Beneficiary Designations and Titling:  

It is critical to update beneficiary designations and title assets to be consistent with the estate plan.

Probate/Guardianship

Probate is the court procedure for transferring a deceased person’s assets to his or her beneficiaries.  Often clients wish to avoid probate to eliminate an extra burden at death and to simplify matters at death.  This can be accomplished by a revocable trust or other titling and beneficiary designation techniques.  The best option for you will depend on the following:

• The number of children you have and the relationship between them. 
• The desire for a single person to handle matters at death.
• The complexity of your wishes.

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 Attorney.

Estate Taxes

Effective 1/1/2026, the federal estate tax exemption is $15,000,000 per person and is indexed for inflation. When a spouse dies, the surviving spouse can carry over the deceased spouse’s unused estate tax exemption so that the surviving spouse can use both exemptions.  However, a federal estate tax return must be filed at the first spouse’s death or the exemption will be lost. 
Wisconsin does not have an estate tax or inheritance tax although many other states do.

We are here to help and guide you through the estate planning process.  Our goal is to make your plan as simple as possible to accomplish your goals and to make the process understandable and comfortable. 

Our Estate Planning Process

1. 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 personal property.

2. Determine Goals and Objectives. The next step is to meet to discuss your goals, personal situation and concerns.

3. 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.

4. 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.

5. 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.

6. Conference to Execute Documents. Generally the next step is to return to our office to execute documents and beneficiary designations.  

7. 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.

Interested in having your estate plan review or updated?  Contact Attorney Melissa Ridgway or Attorney Kathy Bach at (262) 886-9720!