The Compass: Official Newspaper of the Catholic Diocese of Green Bay, Wisconsin  Special


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Official Newspaper of the Catholic Diocese of Green Bay, Wisconsin
March 15, 2002 Issue

Make sure your game has more than a dice roll

Good estate planning helps you win at Life -- as well as after

By Deric Duquaine

My wife and I had just finished playing the board game Life and added up our respective "life savings." She had accumulated significantly more wealth than I had and basked in her apparent victory.

Not to be outdone, I drew on my professional experience to assess our game. I explained its real outcome -- how she had failed to do any estate planning, subjecting her wealth to estate taxes in excess of $2 million when her assets were distributed to her heirs. I, however, through careful estate planning, was able to avoid estate taxes altogether through a plan that included charitable gifting, allowing my estate to claim deductions and reduce (or in this case eliminate) estate taxes.

More importantly, I pointed out the additional fulfillment I achieved in my "life" by providing for my church and other charities. The game ultimately helped my wife and me sort our priorities, underscoring the importance of providing for the distribution of our assets upon death according to our wishes. This led to a discussion of our wills, the primary documents in estate plans.

A will accomplishes numerous important objectives:

• It specifies who will receive your property when you die.

• It also specifies a "personal representative," who will distribute your estate assets to your beneficiaries and (unfortunately!) creditors.

• Under your will, you may also specify whether beneficiaries will receive your assets outright or in a trust that may be useful for minor children or beneficiaries with special needs.

• Furthermore, under a will, you may nominate an individual as legal guardian of your children.

If you have not executed a will or otherwise failed to provide for the distribution of assets and a guardian for your children, you lose your ability to make such determinations. The state will decide for you.

In Wisconsin, if you die without a will (referred to as dying "intestate") and have not made other arrangements for your estate, all your property will be given to your spouse, unless you have children from outside of your marriage, for example, with a prior spouse. In that case, both your spouse and such children (or their children) will have an interest in your property.

If you have no living spouse, children, grandchildren, or great-grandchildren, Wisconsin law lists the order in which heirs -- ranging from your parents, siblings, and other relatives -- will inherit your property. If you die without heirs, the state school fund will receive your property.

Let's look at a hypothetical example:

Mike and Jane married when they were both 23 years old. Both recently graduated from college, they owned no significant assets other than a used automobile when they started a business together.

Jane's older brother, John, helped pay her college tuition. She and Mike talked about helping John's four-year-old son, Joe, with his college costs when the time came. Mike and Jane took a special interest in Joe because they were unable to have children of their own. They were also very active in their church and, as their business took off, they began making significant annual gifts to their church.

Through hard work, by the time they were 32 years old, their combined estate was worth $400,000. When Jane died in a car accident that year, she did not have a will. Her share of the estate was distributed to Mike. A year later, Mike died in a work accident. He had not yet made a will.

Mike's parents received the balance of the $400,000 estate. They did not know of Mike and Jane's plans for Joe, nor were they aware of the extent of Mike and Jane's interest in their church. Consequently, neither Joe, nor the church was provided for as Mike and Jane had wished.

When planning your will, keep in mind that only those assets subject to probate will be transferred under your will. Probate is a procedure conducted under the supervision of the court to assure proper distribution of your assets.

Assets which have beneficiary designations, such as life insurance and retirement benefits, are not usually subject to probate. Property held in joint tenancy with a right of survivorship is also not subject to probate.

Incidentally, my wife still claims victory in our Life game because I failed to specify that I was making a will and estate plan during our game.

(Editor's note: Duquaine, an associate attorney with the law firm of Liebmann, Conway, Olejniczak & Jerry, S.C., Green Bay, works with attorney Frederick Schmidt. Schmidt was instrumental in developing the free wills awareness seminar program of the Green Bay Diocese more than ten years ago.

Since then, 110 free will seminars have been attended by more than 6,000 individuals. Thirty local attorneys and other professionals volunteer their time and information to present these informative seminars, which are made possible through gifts to the annual Bishop's Appeal.

One of the sources for this article was "Answering Your Legal Questions About Wills/Estate Planning" published by the State Bar of Wisconsin.)

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