Estate Planning & Wills Articles

My wife and I have a charity that has become really important to us. Although we aren’t wealthy and don’t have a large estate, we’d like to leave something for it in our will. We’re struggling to decide whether to leave a definitive dollar amount or a simple percentage because we want the majority of our assets to go to our kids. What are the pros and cons we should consider?

Attorney Greg Bonney recommends using a percentage rather than a dollar amount in your will. That allows the amount given to charity to go up or down with the size of the estate, and prevents a situation from arising where there are no assets available for other beneficiaries once the charitable bequest is paid.

Other estate planning tools can also be used to support a charity. A nonprofit tax-exempt organization could be listed as a beneficiary or partial beneficiary on a life insurance policy or retirement account. "Since a tax-exempt organization does not pay income taxes, distributions from a retirement account could be made to a charity without tax," Bonney said.

"In addition, beneficiaries on life insurance policies or retirement accounts can be changed easily if you later change your mind."

An irrevocable charitable trust can also be created to benefit a charity, but you must be willing to permanently give up control of the assets used to fund the trust. You can design the trust to provide income to you for the rest of your life, with any amounts remaining paid to a charity or charities upon your death.

You can also design the trust to provide for periodic payments to a charity, with any amount remaining distributed to your heirs after your death. Depending on the trust terms, you will be allowed to take a charitable deduction when the trust is established and funded.

"There are many factors to consider and many different options available," Bonney said. "An attorney experienced with estate planning can help you plan the best way to meet your goals."

For more information on charitable giving, contact Greg Bonney at 608-784-5678.

by Maureen L. Kinney, Attorney, Johns, Flaherty & Collins

Despite a difficult economy in recent years, many people in the Coulee Region continue to give generously to charities. And as another season of giving rolls around, many again will be deciding whether to give, to whom and how much.

If you have resources to give, one of the first steps is selecting a charity. The best reason to give to a charity is because you believe in its mission. Ultimately, giving is an act of benevolence, so you may want to start by looking at your church, organizations in which your children are involved or those that advance causes that are important to you.

Once you've found a charity that appeals to you, do your homework to ensure it's worthy of your support. Request an annual report and look for information about how much of the budget goes to administrative costs versus programs. Find out who's on the board of directors and who else supports the organization. It's also helpful to find endorsements from objective, third-party organizations.

There are many ways to maximize the value of your good will. One of the most common is to claim gifts as tax deductions. For 2009, if you're married filing jointly, you'll need more than $11,400 in itemized deductions to make it worthwhile, $8,350 if you're filing as a head of household. But keep in mind that it's not a dollar-for-dollar return. If you give $100 to a charity, it reduces your taxable income — not your tax due — by that amount.

If you make gifts, pay by check and keep a record of your gifts. If you donate more than $250 to a charity in one year, the charity is required to give you a receipt to keep in case the Internal Revenue Service requests it.

Another method is to give appreciated stock. The charity can sell the stock without paying taxes on it. If you sold it yourself to give cash to the charity, you would be required to pay tax on any appreciation first, thereby reducing the amount available to give the charity.

You can also establish charitable remainder trusts. They allow you to place assets in a trust to provide income to you over a period of time. At the end of that period, the remaining assets are turned over to the charity of your choice.

Trusts can be funded with an assortment of assets, including bonds, mutual funds, stocks and real estate. This technique eliminates capital gains taxes on the assets placed in the trust and provides you with both an income stream and a potentially sizable charitable income tax deduction — all while benefiting your chosen charity.

Some people give life insurance policies to charity by naming the chosen organization as a beneficiary. While that does not qualify as a tax deduction while living, it does qualify as an estate deduction after death.

If you're considering large gifts to charity, it's wise to talk with your accountant, financial adviser or other tax consultant to be sure you understand all the benefits, restrictions and tax issues regarding your gift.

With a little planning on the front end, you'll likely find you're able to give a more significant gift with more lasting benefits — for both your chosen charity and yourself.

Reprinted with permission from Holmen Courier and Onalaska Community Life, December 2005. Updated December 2009.

by Gregory S. Bonney, Attorney, Johns, Flaherty & Collins

For many individuals and couples, the prospect of long-term care is financially daunting. With the average room cost in Wisconsin currently close to $5,100 per month, even healthy nest eggs can't last long at that rate.

That's why many look to Medicaid to help. A federal program run by individual states, Medicaid reimburses facilities and physicians for providing care to qualifying people who cannot finance their own medical expenses.

In Wisconsin, eligibility rules depend on whether you're single or married. To qualify for Medicaid as a single person, you can have cash assets of up to $2,000 in a bank account, a life insurance policy with a face value of no more than $1,500 and prepaid funeral and burial expenses.

If you own a home, you may keep it only if your doctor says you'll likely be able to return there. You can also keep your car only if it's needed to obtain medical care, though most people in long-term care facilities find it difficult to justify.

The limits are different for married couples in order to prevent spouses from becoming impoverished while their partner receives long-term care.

With these couples, the institutional spouse (the one receiving long-term care) is limited to the same allowances as single individuals, but the couple's joint assets are considered in determining what the community spouse (the one remaining at home) may retain.

For example, community spouses can keep one home, regardless of value, one vehicle, regardless of value, household goods, anything set aside for burial, and individual retirement accounts. They are also entitled to retain between $50,000 to $95,100 in assets, depending on how much they have jointly with their spouses.

Community spouses may also keep a minimum income of $2,081 per month, but that amount can increase (to a maximum of $2,377) if you can demonstrate you need more than $624.50 per month to maintain your home. Institutional spouses can keep income of $40 per month.

Any income exceeding those amounts must be paid to the long-term care provider. Medicaid then picks up the difference.

An individual can still qualify for Medicaid even if certain assets are transferred. For example, transferring ownership of a home to a community spouse is permissible. It's also legitimate to transfer a house to a child under the age of 21, a child who is blind or disabled or a child who has lived in your home at least two years and thereby delayed a parent's need for long-term care.

Although many people want to pay for their own care so long as they have sufficient assets to do so, divestment is another method people are using to qualify for Medicaid, although it carries a number of risks and ethical considerations. Divestment is a transfer of an asset by a person in long-term care or their spouse for less than fair market value with the intent of qualifying for medical assistance.

Divestment creates a period of time when you're ineligible to receive Medicaid. For example, if an individual makes a gift to a child within three years of the date the individual applies for Medicaid for long-term care, then that gift must be disclosed and the person is not eligible to receive Medicaid for a period of time equal to the number of months the gift would have paid for the individual's care at the current rate of $5,096 per month. A gift of $50,960 then would mean an individual must wait ten months before Medicaid will begin picking up the cost. If the gift to an individual occurred more than three years earlier, it does not need to be disclosed and has no effect on eligibility.

People without many assets but who feel they want to leave their homes to their children frequently use life estates. Life estates enable them to gift their homes to their children but retain rights to the property for the rest of their lives. If at least three years passes before applying for Medicaid, the life estate does not affect eligibility unless the home is sold; at that point, a portion of the cash received from the sale of the home (calculated by IRS tables estimating life expectancy) must be used toward paying for care.

People who have a lot of assets will sometimes gift all assets up-front except what is needed for three years worth of care. They then apply for Medicaid at the end of the three-year period and can indicate they have not gifted anything in the past three years. Some purchase long-term care insurance to cover the expenses for that three-year period.

This is only a brief summary of some of the issues involved in an otherwise very complicated area of the law. Planning for long-term care involves many difficult decisions that carry complex property and tax law implications, as well as ethical dilemmas. The rules and regulations also change frequently.

With all the potential risks and pitfalls, your best strategy with long-term care planning is to work with experienced legal and financial advisers. Doing so can help you maximize your options and your peace of mind.

Reprinted with permission from Holmen Courier and Onalaska Community Life, October 2005.

by Gregory S. Bonney, Attorney, Johns, Flaherty & Collins, SC

With nursing home costs now averaging close to $80,000 per year, it’s no wonder many seniors need the help of Medical Assistance or Medicaid when they hit a major health crisis. But the Medicaid program is designed to pay certain medical expenses for individuals who cannot pay those expenses themselves. That’s why there are complicated rules in place to make sure those who can afford to pay their own expenses do so, without making a spouse or certain other relatives impoverished.

Unless you’ve somehow planned for long-term care, through saving or insurance, you’ll likely find you significantly deplete most of your assets before qualifying for any assistance. That reality has led many people to explore reducing assets that might be available for their long-term care. If the reduction is made to avoid having to pay for your own impending long-term care needs, that is known as divestment. Divestment is defined as disposing of assets for less than fair market value in order to qualify for Medical Assistance or Medicaid. It’s a prohibited practice that carries penalties.

If you’re one of those couples caught somewhere between the ability to self-pay and the poor house, understanding the rules surrounding Medical Assistance can help you find legal alternatives. Although Medical Assistance is a federal program administered by the states, the rules in each state vary. Following are the general rules for Wisconsin.

Assets

Medical assistance allows people to retain some assets while exempting some others.

Exempt assets for both single and married persons include:

• Life insurance with a face value of $1,500 or less, and
• Pre-paid funeral and burial expenses, including plot, headstone, casket, vault and up to $3,000 in an irrevocable non-refundable burial trust.

In addition, single people may keep a residence so long as equity in the property does not exceed $750,000 and the nursing home stay is temporary or the property is listed for sale. The only exceptions are for situations where (1) the homeowner’s child lived in the home for at least the past two years and the arrangement delayed the need for nursing home care; or (2) a disabled child lives in the home. Single people may also maintain one vehicle if needed for medical care.

Married couples have a few additional assets that are exempt. Exemptions that apply to married couples include a residence, one vehicle of any value, retirement accounts of the community spouse and most household and personal items, except those held for investment purposes such as gold, silver or collectible art.

One common planning tool is to maximize the exempt assets by:

• purchasing a life insurance policy with a face value of $1,500 or less;
• pre-paying funeral and burial expenses or purchasing a burial insurance policy (with most companies willing to issue a policy up to $15,000).

If you’re married, you can also:

• make improvements to the house, such as replacing a deteriorating roof, upgrading an outdated air conditioning or furnace system, installing a ramp or making other changes to increase the accessibility for the community spouse;
• trade in an unreliable car for a new one.

If you’re single and a child is willing and able to move into your home to assist you and thereby delay your need for long-term care, that would not only improve your quality of life but may also eventually mean the house could be transferred to the child without affecting eligibility for Medical Assistance.

In addition to exempt assets, an “institutional spouse” may have assets of no more than $2,000 and still qualify for Medical Assistance. The “community spouse” may keep a resource allowance ranging from $50,000 to $109,560, depending on assets.

Income

People receiving Medical Assistance, whether single or institutional spouses, are allowed to retain $45 per month in income. Community spouses are allowed a maintenance needs allowance of between $2,428.33 and $2,739, depending on shelter expenses.

One more option

When it comes to Medical Assistance, spouses are required to use their assets for the support of one another. Even a prenuptial agreement can’t stop that obligation. The only way to at least partially protect the assets of a community spouse is for the couple to divorce. This is a sad step to take, but it doesn’t have to change the relationship. It just changes their legal status. Divorce is a difficult decision for couples, particularly at such a time when the health of one is compromised. Some couples take this step; many don’t. Even a divorce is not necessarily a solution, since the couple would still have to address a division of property and alimony or maintenance.

Divestment

When you apply for medical assistance or Medicaid, the government will want to look back for a period of time to see if and how you have disbursed assets. If you have divested, the government will hold you responsible for paying those amounts toward your health care needs before medical assistance kicks in. Gifts given prior to 2009 are subject to a look-back period of three years; gifts given since 2009 are subject to a five-year look-back period.

Insurance

Of course, one way to avoid the whole divestment debate is to invest in long-term care insurance.

Wisconsin now has a program called the Wisconsin Partnership. For any qualified long-term care policy purchased since the program’s inception, insured parties may put away for family members one dollar for every dollar paid from the insurance for long-term care. That money saved for family members then is not considered a divestment.

Most people begin considering long-term care insurance in their 50s. If you’re among them, keep in mind that statistics indicate only 16 percent of us will need to be in a nursing home for more than 90 days. Also, it’s important to remember there are many options to consider before nursing homes, including in-home care and assisted living, both of which are far more affordable than nursing homes.

Right or Wrong Answers

One final issue to consider is that medical assistance is designed to pay the care for people who cannot afford it themselves. The question is whether all of us should expect the government to pay for that care. There is no right or wrong answer. Just remember that you have more choices when you pay yourself, and that may be the best reason of all to plan not to need government assistance.

by Gregory S. Bonney, Attorney, Johns, Flaherty & Collins

At first glance, estate planning can seem like an unpleasant task. It requires people to plan for their own, inevitable death. But viewing estate planning instead as insurance, as a way to provide for your loved ones for years to come, can help — both as motivation to do it and to do it right.

The most common estate planning mistake is having no plan. More than 50 percent of American adults do not have a will, according to a 2010 FindLaw survey. Some don’t bother because they’re satisfied the legal system will see their assets are divided fairly among survivors. Others think they can’t afford it. And others don’t believe their estate is sizable enough to matter.

Many Americans are surprised to learn the real value of their assets. Home equity, retirement accounts and insurance policies alone can equal a sizable estate, and advance planning can be an affordable way to protect it — especially if you work with an attorney who concentrates in the area of estate planning. Experienced estate planning attorneys have worked with a variety of clients and scenarios and have the expertise to help you develop an estate plan that meets your goals and objectives.

Without a will, the state decides who cares for your children, who handles your estate and how your assets will be distributed — potentially leaving certain loved ones or favorite charities with nothing.

Another common estate planning mistake is failing to coordinate beneficiary and account ownership designations with wills or other estate planning documents. These designations "trump" wills and other documents, so if your will dictates that your children are to get certain assets at certain ages but you name your children as beneficiaries on a life insurance policy, your children will get their entire portion of the life insurance proceeds at the age of 18. Consistency between beneficiary designations and will provisions can assure your estate is distributed according to your wishes.

Coordinating beneficiaries is also important for estate and income tax reasons. Unnecessary taxes may be owed if beneficiaries are not correctly named on retirement accounts and life insurance policies.

The third most-common estate planning mistake is failing to revisit your plan. Estate planning is not a one-time event where you do it and it’s done forever. Any life-changing event — the birth of a child, death of a spouse, divorce, remarriage, retirement, etc. — should prompt a review of your plan.

You should also review your plan if you have aging parents named as beneficiaries, if the guardians you have designated for your children divorce, move away or die, or when tax laws change.

Absent these kinds of circumstances, it’s a good idea to review your plan every five to seven years. When you do, be sure that all your professional advisers — accountant, financial adviser and attorney — are on the same page. Often, your tax preparer is in a good position to coordinate communication among your advisers because he or she sees you at least annually.

The initial planning and periodic reviews require a little extra time and thought, but the effort will help you avoid mistakes and assure your wishes concerning your assets and loved ones are realized.

Reprinted with permission from Holmen Courier and Onalaska Community Life, February 1, 2008.

by Gregory S. Bonney, Attorney, Johns, Flaherty & Collins

If average Americans have learned anything from Anna Nicole Smith’s death, it’s about the need for solid estate planning. Few people want to face their own mortality, but some advance planning can tremendously ease the burden for your loved ones when the inevitable happens.

While one might be tempted to think of estate planning as merely having your will in place, it’s really about much more. It’s like a puzzle, where you need to be certain all the pieces fit together.

To begin, every person needs to have three basic documents, including a will, a healthcare power of attorney and a durable power of attorney. The healthcare power of attorney authorizes someone else to make medical decisions for you if you can’t make them for yourself, and a durable power of attorney authorizes someone to handle your finances should you become incapacitated. Both of those documents automatically terminate at death, and that’s where the will comes in.

Simply stated, a will specifies what is to happen with your property when you die and names an executor to carry out your wishes. If you have minor children, you can also use a will to designate a guardian.

One challenge with wills, however, is that all property handled by a will must go through probate, which can delay the distribution of your assets. That’s why many people opt for a combination of a will and a revocable (living) trust. A living trust allows you to circumvent probate by designating someone (a trustee) to administer trust property for a beneficiary.

There are many other kinds of trusts to help you achieve your objectives, some of which can help with estate taxes.

Parents often prefer trusts instead of directly transferring assets to children. Through trusts, you can structure the distribution of assets to occur at certain times and stages of their lives, whereas if you merely name them as beneficiaries, they automatically receive control when they turn 18.

A common misconception about wills (and trusts) is that they cover all your property. But in reality, beneficiary designations on life insurance and retirement accounts "trump" wills and trusts. If in your will, for example, you say you want 10 percent of your estate to go to your church and the remainder to be divided among your children but you name only your children as beneficiaries on your insurance policy, all of the life insurance proceeds will be distributed directly to your children.

If you want the terms of your will to control the disposition of life insurance proceeds, your estate could be listed as beneficiary on the policies. Beneficiary designations on retirement account can be tricky, so it is important to talk to a financial planner or attorney before listing a beneficiary so that the tax and other implications are fully discussed.

However you decide to structure your estate, it’s critical to update your documents regularly. If something major happens in your family, such as a birth, divorce or financial windfall, that’s always a good time to update your plan. Otherwise, a good rule of thumb is to review everything every five years.

Estate planning is really about providing for the people and causes you care about when you leave this world. A well-planned, comprehensive plan can reduce headache as well as heartache for your family.

Reprinted with permission from Holmen Courier and Onalaska Community Life, April 2007.

by Gregory S. Bonney, Attorney, Johns, Flaherty & Collins

More than 11 million people in the United States live with an unmarried partner, according to the 2000 Census. That’s a 72 percent increase over 1990 and a significant number of people who can’t assume they’ll be making decisions for their partners in the event of a medical crisis or death.

Unlike their married counterparts, unmarried partners, even in life-long relationships, are frequently kept out of hospital rooms or funeral decisions. They also may not inherit financial assets intended for them if the right documents are not in place.

Life planning, or estate planning, is important for everyone, but it is even more critical for unmarried couples. Four key documents can ensure the person you want (not merely the family member who is next of kin) will make decisions concerning your life and death when you cannot make them for yourself.

• Will or trust — Wills and trusts transfer property you hold in your name to the people and/or organizations you want to have it; it also names the person you wish to carry out your instructions and names a guardian if you have minor children. While wills take effect upon your death, a trust takes effect immediately upon execution. Additionally, trusts are more private documents and are not contestable like wills.
• Health care power of attorney — A health care power of attorney or other health care directive appoints a person you designate to make decisions regarding your medical treatment in the event you are unable to make them for yourself.
• Living will — A living will is an advance directive that instructs health care providers about the nature and extent of care you want in the event you suffer permanent incapacity.
• Durable power of attorney for financial matters — This power of attorney appoints someone to act for you and handle your financial matters should you be unable or unavailable to do so for yourself.

In addition, unmarried partners should carefully review how title to property is held (e.g., individually or joint ownership) and beneficiaries for life insurance, IRAs and other retirement plans.

It’s also a good idea to outline your funeral and burial arrangements to ensure they are carried out according to your wishes. Not only does it remove guesswork and potential conflict for your surviving loved ones, it also makes their lives a little easier at a very difficult time.

In short, the best way to ensure your wishes are carried out — and your partnership is duly recognized — is to put them in writing. Estate planning documents provide the means for this, assuring your loved one (not state law) makes decisions on your behalf.

Reprinted with permission from Holmen Courier and Onalaska Community Life, July 2005.

Whether 80 or 18, every adult should have a document called an advance directive, which outlines what you would want done for you medically under certain circumstances, according to attorney Greg Bonney, whose practice includes estate planning. Ideally, you appoint someone as your health care power of attorney to make these medical decisions for you.

Sometimes called a living will, this document describes your wishes if you can no longer sufficiently analyze medical options and make your own medical decisions. That document allows you to express your wishes regarding the use of life-prolonging treatments, a feeding tube, cardiopulmonary resuscitation (CPR) and other medical procedures.

Along with that document, Bonney recommends three others:

• A durable power of attorney designating someone to handle your finances if you can no longer do so.
• An estate plan that describes how your money, investments and property are to be distributed upon your death.
• >A document outlining your wishes for final disposition of your body upon death, such as where you would want to be buried or if you would prefer cremation.

“It is important to get something in writing if you want to leave something special to a person or if there is a child or other relative with special needs,” Bonney said. “Also, if you want certain items to go to charity, you can set that up in your estate plan.”

The best way to approach life and estate planning is to specify your wishes in writing, according to Bonney. “It might help motivate your parents to do some estate planning if you can tell them you and your spouse have set up a will and advance directive and found the process to be helpful — and painless.”

by Gregory S. Bonney, Attorney, Johns, Flaherty & Collins

Though it may sound cold, a new Wisconsin law will actually bring peace of mind to many residents. The law, called Authorization for Final Disposition, allows Wisconsin adults to choose who will make their funeral and burial arrangements.

Prior law held that next of kin made all arrangements, regardless of the wishes of the deceased. That created a number of problems for unmarried couples, siblings of deceased parents and the clergy and funeral directors who were trying to sort out to whom they should listen.

Effective April 1, 2008, the law says that anyone age 18 or older can appoint someone to handle these matters, including what happens to their body and what kind of memorial service, if any, occurs.

It comes as good news to anyone who has strong feelings about what should happen to them upon death. Unmarried couples — both opposite sex and same sex — can now insure that their partners make funeral and burial arrangements rather than next of kin if they so desire. The law will also clarify funeral and burial issues that may arise in second marriages when one has surviving children from a first marriage and a surviving spouse from a second.

The law is very specific, allowing residents to specify backup designees and prescribe what happens in various scenarios, such as when children of the deceased disagree.

The law suggested a form that people can complete themselves, and the Department of Health and Family Services is working on its development. In the meantime, Johns, Flaherty & Collins has forms available free of charge by calling 608-784-5678.

The form provides sections for indicating religious observances, viewing arrangements, funeral ceremonies, memorial services, grave side services, last rites, burial, cremation, other disposition or donation of a body after death, funding sources to pay for disposition and other areas for spelling out specific preferences. Without the form, the law reverts to granting next of kin the power to make such choices for you.

To put your wishes into effect, just complete the printed form and have it notarized or witnessed by two people who are unrelated to you and are not named as designees under the Authorization. Then share copies with the person(s) you appoint, family members and any church, synagogue or other religious institution you attend. If you have prepaid funeral or burial arrangements, it’s also a good idea to have one on file with the funeral home or cemetery.

Used correctly, the Authorization for Final Disposition should become another of your standard estate planning documents, so you should review it when updating wills, durable powers of attorney or healthcare powers of attorney. Like other estate planning documents, the Authorization provides one more way to assure your wishes are respected.

Reprinted with permission from Holmen Courier and Onalaska Community Life, April 4, 2008.

A relative inherited a good deal of money and gifted a portion of that money to us to help us get into the house we are building. The money ran out before we were able to finish our house. The relative feels we mismanaged the gift of money and told us to get a good lawyer. There was no note or loan agreement. Does she have grounds to sue?

"A gift is a gift. It’s yours to do with as you please with no strings attached," says estate planning attorney Greg Bonney. "If it was a loan to be repaid, that should have been clear up front."

Bonney says that in order to show the court it was a loan, the lender would need to have something in writing — an agreement, a letter or even the word "loan" written in the memo section of a check — indicating it was indeed a loan. Without anything in writing, the courts would consider the money a gift.

For more information on estate planning in Wisconsin, contact Greg Bonney at (608) 784-5678.

My wife has a "power of attorney" letter that gives her the power to sign for her mother, an Alzheimer's patient in a nursing home. When trying to sell her mother’s home, the closing agents have requested an "Original Copy" that they will place on file. If we do this, what do we do if we need to use it again — as I'm sure we will?

Most Durable Powers of Attorney indicate a copy is just as valid as the original, according to estate planning attorney Greg Bonney. The statutory Power of Attorney form in Wisconsin states: "I agree that any 3rd party who receives a copy of this document may act under it."

If the Power of Attorney has such language, the closing agent should accept a copy as a valid document. If not, hopefully they will just take a copy of the original after observing the original.

"If they want something more, I would suggest giving them a copy and attaching an Affidavit certifying it is a true and correct copy of the original document and is still in full force and effect," said Bonney. "I would suggest doing what you can to avoid giving up the original document."

For more information on estate planning in Wisconsin, contact Greg Bonney at (608) 784-5678.

A new law in Wisconsin clarifies rules governing durable powers of attorney for finances, also known as a “POA.”

“In the past, some banks and other financial institutions had their own forms they wanted you to use even if you prepared a document with an attorney,” said attorney Greg Bonney. “Now there is a new statutory form allowing you to appoint a person to handle financial matters for you and rules determining when a bank or other financial institution may refuse to recognize a POA.”

Under the law:

• The POA may be effective immediately or activated at some point in the future, such as upon incapacity.
• Banks and other financial institutions cannot refuse to recognize a POA simply because it was signed many years ago or because it is not their own form.
• The authority granted under the POA continues until you die or revoke it.
• Co-agents may be named with the authority to act independently.
• The POA is revoked upon a divorce, legal separation or termination of a domestic partnership if your relationship with the agent has ended

For more information on estate planning, contact Greg Bonney at 608-784-5678.

One similarity between wills and durable powers of attorney is that they are both governed by state statute. The similarity ends there, according to Johns, Flaherty & Collins attorney Maureen Kinney. Wills and durable powers of attorney are very different documents that must be handled separately.

Regarding the will, if you line out the previously-named personal representative and write in a new name it will not be recognized as a legal and binding change. Wisconsin statutes require that the will be (1) in writing, (2) signed by the person making the will and (3) signed by two or more witnesses. Once the will has been executed with the above three formalities, it can be considered valid and it is effective as written.

To make a legal and binding change to provisions in a will, the person who executed the will should execute a codicil. A codicil is a supplement or addition to a will that explains or modifies its provisions. Because it changes a will, it must meet the same three requirements.

Powers of attorney, on the other hand, name attorneys-in-fact or agents, rather than personal representatives. With these documents, you may change the agent by lining out the name in the document and have the change recognized as legal and binding.

It’s important to note that Wisconsin statutes merely require powers of attorney to (1) be in writing and (2) clearly show the agent's authority, so all it takes for the agent to act on your behalf is possession of the document. That means the agent whose name is being "lined out" can still act on your behalf if he or she has the document. To prevent unauthorized use of a revoked power of attorney, it is a good idea to obtain all copies of the revoked power of attorney from all agents and, in the example above, notify everyone honoring the power of attorney that it has been revoked.