THE E.P. EXPRESS Volume 9, Issue 1 FOS’S Estate Planning Newsletter Spring 2021 an Ounce of Prevention
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THE E.P. EXPRESS Volume 9, Issue 1 FOS’s Estate Planning Newsletter Spring 2021 An ounce of prevention. Editor: Diane Slomowitz ESTATE PLANS CAN ADDRESS MENTAL HEALTH ISSUES As the COVID-19 pandem- so harshly affect an individ- his personal and/or financial tions and, if needed, inpa- ic enters its second year, ual’s decision-making abil- affairs—a health care power tient or outpatient mental many are experiencing its ity that the individual needs of attorney is still a good health treatment for the prin- psychological fallout. continuing supervision and protective step, in case the cipal. attention. issues at some point become Grief, fear, anxiety, depres- incapacitating. Along with the health care sion. Mix in hope (dare we What does this have to do power of attorney, family hope?) from the COVID with estate planning? Plenty. In a health care power of members should consider vaccines, and our tear ducts attorney, the principal desig- obtaining a financial power continue to get a good An appropriately tailored nates a trusted person as of attorney over the individ- workout. estate plan can help prevent agent to make health care ual, naming a trusted and the potential financial and decisions on his behalf if he responsible person as his or For most of us, these are physical devastation that or she is unable to do so. her agent. normal situational respons- mental illness may cause, es, which will hopefully without the need for costly, While this document is usual- This document would pro- lessen when the pandemic lengthy, divisive, and public ly described in the context of vide a mechanism for the eventually recedes. guardianship proceedings. an incapacitating physical payment of the principal’s condition, such as a coma, it medical treatment costs, Not all psychological is- Powers of Attorney also applies to an incapacitat- medical and nonmedical sues, however, are situa- ing mental illness. bills, and account deposits If a person has mental health tional. and transfers. issues but is still legally The designated agent could Some mental health issues competent—able to handle obtain doctor visits, medica- Estate Plans, cont. on pg. 2 EQUAL IS IN THE EYE OF THE BEHOLDER Your oldest child is a suc- been unemployed since the Zooms with your spouse al- article on the family discord cessful businessman with a COVID-19 pandemic began most every hour. sown from unequal inher- high salary, a working wife last year, and you are paying itances:nytimes.com/2021/ and two teenage children. their expenses until they Four children, in different 02/19/business/estate- He lives in another state, find work. They live in town financial circumstances and planning-inheritances- calls once a week and visits and provide most of the with different relationships to retirement.html once a year. meals for you and your you and your spouse. In other spouse. words, often a typical family. True, many parents divide His younger brother, who is their estate equally amongst single and childless, left a Your youngest married into Should these oh so different their children. However, you modestly paying job to act a wealthy family in another children receive equal shares don’t have to. as the unpaid live-in care- state and is a stay-at-home of your and your spouses’ giver for your ailing spouse. mother to a young child. She estate? Would that be fair? These are hard questions also helps her sister finan- To them? To you? with even harder answers. The next in line is married cially, visits you three or There is no right or wrong with three pre-teen children. The New York Times, for its here. four times a year, and part, recently published an She and her husband have Equal is in the Eye, cont. on pg. 3 REMINDER: GIFT TAX RETURNS FOS’s ESTATE PLANNING Gift tax returns are due on April 15th (unless extended), although most people won’t ATTORNEYS pay any tax. The 2020 annual exemption for most gifts is $15,000 per person, per re- cipient. Some gifts are not taxable even over $15,000, including gifts to U.S. citizen spouses, FOS shareholder most gifts to charities, payments directly to health care providers for medical services for others and payments directly to schools and colleges for another person’s tui- Allan T. Young tion. The exclusions for medical services and tuition are available regardless of the relationship between the donor and the person benefiting from the payment. Moreover, the lifetime gift tax exemption of a whopping $11.58 million applies for A Certified Public Accountant any taxable gifts made in 2020. Most gifts to charities and payments for medical ser- (CPA), Al worked at the Big 8 Ar- vices or tuition do not need to be reported on a gift tax return. thur Andersen accounting firm be- fore joining FOS. All other gifts exceeding $15,000 must be reported on a gift tax return, so the IRS can keep track of the use of your lifetime exemption. Al is a member of the Greater Mil- waukee Foundation’s Herbert J. Mental Health Issues, cont. from prevented the proceed- his or her support and Mueller Society. pg. 1 ing’s pain, time, expense welfare as needed. He is a past Chair of the Wisconsin It would also, for exam- and publicity. Bar Association’s Taxation Section. A trust may also provide ple, allow the agent to Powers of attorney, of that the individual re- Al is a former Chair of the Milwau- stop any exorbitant pur- course, cannot be created ceive specified amounts kee Bar Association’s Taxation Sec- chases or financial “gifts” when the principal is not at different ages (i.e. tion. during a manic episode. legally competent to sign $10,000 at ages 40, Al is a member of WICPA’s State The alternative to volun- them. And they are not a 50…) or at different du- Tax Committee and the Waukesha County Estate Planning Council. tary powers of attorney is guaranty against future rational increments (i.e. a guardianship, some- lawsuits. $10,000 every five times called a conserva- years). Even so, they are worka- torship. ble tools to keep those we The specific distribution- Here, the court appoints a love safe and help them al scheme will depend on guardian for a legally lead their best lives. the assets and prefer- ences of the person creat- incompetent person until Trust Provisions FOS shareholder the court determines the ing the trust, in conjunc- person can renew han- Some persons with mental tion with the medical and Gregory J. Ricci financial needs of the dling his affairs. illness receive government assistance such as SSI recipient. One example is the dec- Disability payments. ades-long judicial conser- Mental health issues are Greg worked at the Big 8 Arthur vatorship over the person- These programs common- hard enough to address Andersen accounting firm before al and financial affairs of ly prohibit a recipient without the court sys- joining FOS. He is a CPA. singer Britney Spears. from receiving over a des- tem’s added intrusion. ignated amount of in- An appropriately de- Greg served on the Board of the There, many court fights come. Wisconsin Bar Association’s Taxa- occurred over whether signed estate plan, in- tion Section. Spears’ father should re- A properly designed Spe- cluding powers of attor- ney and tailored trust He also served on the American Bar main conservator and how cial Needs Trust can pro- Association’s Fiduciary Income Tax her finances should be vide some financial sup- provisions, can help pro- Committee. managed. port to the recipient with- tect one suffering from mental illness, their Greg is a member of the Greater out running afoul of this Milwaukee Foundation’s Herbert J. Spears likely did not have designated maximum. friends and family. a health care or financial Mueller Society. power of attorney before For one not receiving ben- He is also a member of the Milwau- the conservatorship. efits, tailored trust lan- kee Estate Planning Forum. guage can ensure the indi- If true, they might have vidual receives funds for The E.P. Express - An ounce of prevention... Volume 9, Issue 1 STICKY NOTES ARE NO SUBSTITUTE FOR AN ESTATE PLAN Zappos.com is many shop- other estate plan. individuals, organizations ey, time, and certainly frus- pers’ go-to online shoe store. or charities he wanted to tration. What he did leave was a receive part or all of his Tragically, Zappos founder huge mess. assets when he died? It is rumored that Hsieh and retired-CEO Tony Hsieh suffered from mental health unexpectedly died from a Lawsuits have already been Probably not. issues. house fire in November 2020. filed against Hsieh’s estate seeking chunk after chunk of Had he done so, he could If so, Hsieh and/or his fami- Hsieh was not married and is his assets. have created a will, trust, ly could have used some of believed to have had no chil- beneficiary designations the tools described in this dren. It will take months, if not and other related docu- newsletter’s article “Estate years, to validate or invali- ments, to make sure that Plans Can Address Mental When he died at age 46, he date these claims. happened. Health Issues” to protect had built a fortune estimated individuals with mental To begin to clean up this at $840 million.* Instead, Hsieh and any health issues. mess, Hsieh’s father and intended beneficiaries will As part of his fortune, he held brother had to go to court to be bound by Nevada’s Don’t be like Hsieh.