Everything You Need to Know About Pet Trusts

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Yes, a pet trust is really a thing. For many, pets are as much a part of the family as you or I. They may not be able to say so, but they deserve a plan, too. Pet trusts are legally binding arrangements that ensure your pet(s) are cared for, according to your wishes, if you are unable to do so due to illness, disability, or passing away. Similar to a trust with human beneficiaries, it allows you to set funds aside specifically for your pet’s needs, appoint one or more trustees to manage the trust’s assets, designate one or more caregivers for your pets, and give detailed instructions for their care. If necessary or desired, you can also compensate the caregiver for your pet’s care. If there are any funds leftover after your pet’s death, you decide who will receive those funds, whether it be your pet’s caregiver, divided among your family or other beneficiaries, or to a charity of your choosing. Pet trusts can provide people with a peace of mind and a sense of certainty that their pet is accounted for and a plan is in place to meet their needs. A pet trust ensures that your beloved companions would continue to receive the love and care that they are used to, no matter what.

👪 Estate Planning Essentials: Protect Your Legacy and Don’t Let Your Family Business Fall into the 70% 👪

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The Harvard Business Review article “Avoid the Traps That Can Destroy Family Business” mentions the statistic that seventy percent (70%) of family-owned businesses do not make it to the second generation. Furthermore, if you don’t want your business to fall into that statistic then proper family business succession planning will be vital to preserving the values, vision and foundation you’ve established for many generations to come. Below we have outlined what we think are key considerations to creating a successful family business succession plan and transition:

🔑 Key Steps for Successful Family Business Succession Planning:

1. The Business Plan:
– Evaluate and assess the business’s current value and its potential for long-term growth
– Choose your successors who will help the business flourish according to your wishes
– Develop a transition strategy with the help of an attorney to outline how how the responsibilities will be transferred along with a timeline
2. The Estate Plan:
– Determine the business and personal asset distribution you want to be divided among your heirs
– With the help of an attorney, ensure the proper legal documents (i.e., living wills, trusts, operating agreements, etc.) are created with clear details to ensure a smooth business ownership transition which will mitigate risk and any potential disputes
– Ensure the best fitting tax strategies are implemented that account for any estate taxes and reduce future financial issues for heirs
3. The Exit Plan:
– Define clear exit goals that consider the transfer of ownership, sale of the business, if you hypothetically want to close it down, and what you want to achieve with all of this in mind
– Prepare the business by improving its value, addressing any issues and optimizing the operations if you plan to sell it
– Take into account the financial and personal impact this will have and adjust your plan accordingly

All in all, family business succession planning helps guarantee that your hard work stays in trusted hands for generations to come. By incorporating your family business success plan into your estate plan, it will address the complexities of ownership transition, division of personal property, minimize taxes, and allow the growth of your business to flourish.

Andrew E. Martzahl Joins Lin Law LLC

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We are pleased to announce, introduce and welcome our newest attorney, Andrew Martzahl, to Lin Law LLC. Andrew brings with him a wealth of experience in the areas of Estate Planning, Business Succession Planning, Probate, Trust Administration, Corporate Law, and Real Estate.

As a Green Bay native and loyal Wisconsinite, Andrew earned his Bachelor’s in Business Administration (BBA) in Finance and Economics from the University of Wisconsin-Madison. After his graduation from UW-Madison, Andrew decided to continue his education and simultaneously earned his law degree from Marquette University Law School, where he graduated cum laude, along with his Master of Business Administration (MBA) from Marquette University. During his time at Marquette, he served as the President of the Marquette Law Estate Planning Society and worked as a research assistant on federal estate tax law.

Furthermore, Andrew’s background includes his legal experience at an Am Law 200 firm—one of the top two-hundred (200) largest law firms in the country, as recognized by Law.com and American Lawyer magazine, where he advised his clients – primarily companies in the manufacturing, food & beverage, and construction industries, and their owners – in the areas of wealth planning, mergers and acquisitions, business and transactional law, and business formation. This distinguished experience has provided him with advanced skills when it comes to delivering comprehensive legal guidance making him an invaluable addition to our team.

Outside of the office, Andrew enjoys the great outdoors where you can find him golfing, hiking, fishing, or hunting. Following that, he is a committed supporter of all Wisconsin sports teams. Naturally, as a die-hard Packers fan, he’s counting down the days until he can hopefully and finally get his own season tickets which he is on the waitlist for.

Please join us in welcoming Andrew to Lin Law LLC! We are excited to see what the future holds for him here and are grateful for his expertise and dedication as we know he will be an invaluable asset to our team and clients alike.

🤖AI Can’t Replace Human Value: Debunking Myths About Legal Expertise 🤖

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In light of artificial intelligence’s (AI) present-day developments, more specifically, in regard to the context of recent claims that AI might replace human professionals, this infographic features critical weaknesses and shortfalls of AI in relation to estate planning practices. Additionally, this serves as a reminder that while AI is an impressive and seemingly all-encompassing tool that it ultimately can’t replace human value that is essential to the intricate practice of legal work. As of right now, it is impossible to completely rely on AI to create legal documents because it would require the client’s informed consent. Although in the near future within the legal world, AI should be able to assist with drafting, analyzing data, and increasing the efficiency of these tasks. It is important to address the broader conversation regarding AI’s role in the workforce, as it could replace certain low-skilled jobs by making routine tasks automated, however, this will ultimately drive the demand for higher-skilled professionals to refine their own expertise and work together rather than against AI to enhance their practice. The infographic portrays how AI does not have the ability to make ethical decisions, interpret complex legal issues (i.e., state-specific laws, individualized tax planning, court interpretation, etc.), and/or provide empathetic guidance. 

Ultimately, AI didn’t attend law school and does not have adequate comprehension of legal principles or the essential moral compass that human lawyers acquire. All in all, the future of work in the legal world isn’t about whether AI will replace human professions but rather how human professionals can utilize AI as a tool to enhance their abilities. The future lies in collaboration, where attorneys use AI as a tool rather than a replacement to ensure that legal work is kept confidential, accurate, caters to each client’s individual needs, and is, most importantly, legally sound and enforceable.

Wisconsin Embraces Remote Notarization for Estate Planning Documents

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By Attorney Curtis A. Edwards

In a progressive move to modernize the legal process of executing estate planning documents, on March 21, 2024, Governor Tony Evers signed into law SB 898 (Wisconsin Act 130), which establishes a procedure for the remote notarization and/or witnessing of estate planning documents.

While remote notarization of other types of documents has been possible under Wisconsin law since 2020, estate planning documents have been an exception due to the need for more stringent protocols. The new legislation marks a significant shift in how individuals can legally execute crucial estate planning documents, ensuring accessibility and convenience while upholding the integrity of the law and the documents being executed.

The new legislation encompasses a wide array of estate planning documents, including wills, trusts, powers of attorney, health care directives, and marital property agreements. The comprehensive nature of the law demonstrates the state’s commitment to facilitating essential legal transactions in an increasingly digital world.

Under the new law, remote notarial acts relating to estate planning documents must adhere to stringent procedures outlined in section 140.147 of the Wisconsin Statutes. Unlike other remote notarization processes, estate planning documents necessitate supervision by a Wisconsin-licensed attorney in good standing. This provision ensures that legal oversight is maintained throughout the remote execution process, safeguarding against potential fraud or misconduct.

Crucially, the use of audiovisual communication technology is mandated to enable real-time interaction between the notary, supervising attorney, remotely located individual, and any witnesses. This ensures transparency and accountability, mirroring the traditional in-person notarization process while leveraging technological advancements for greater efficiency and access.

Additionally, remote notarization of estate planning documents requires confirmation of the signer’s physical presence in Wisconsin, along with stringent identity verification measures. These include personal knowledge or production of government-issued credentials to authenticate the signer’s identity and location.

During the remote signing process, individuals must declare their understanding and voluntary execution of the document, and the document must specifically reference that it is being executed pursuant to section 140.147 of the Wisconsin Statutes. Upon completion, the notarized document is forwarded to the supervising attorney for retention and archiving, ensuring a record of the document is made.

The legislation further mandates the completion of an affidavit of compliance by the supervising attorney, affirming adherence to the statutory requirements. This affidavit serves as a crucial record of due diligence, providing additional assurance of the document’s validity and legality.

Overall, SB 898 represents a significant step forward in modernizing legal practices in Wisconsin, providing individuals with greater flexibility and accessibility in executing vital estate planning documents. By embracing remote notarization, the state reaffirms its commitment to innovation while upholding the highest standards of legal integrity and protecting against fraud and misconduct.

If you have any questions or are interested in learning more about this topic, please contact Lin Law LLC at (920) 393-1190.

Navigating the Corporate Transparency Act: A Comprehensive Overview

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By Attorney Curtis A. Edwards

 

As we usher in a new year on January 1, 2024, the Federal government will also be ushering in the era of the Corporate Transparency Act (CTA), which creates new reporting obligations for businesses operating in the United States. Designed to combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activities, the CTA mandates that most entities disclose their beneficial ownership information (BOI). This blog delves into the key aspects of the CTA, shedding light on its reporting requirements, compliance and implications for businesses.

Who Does the CTA Apply To?

The CTA applies to a broad spectrum of entities, including U.S. businesses formed by filing with a Secretary of State (Department of Financial Institution in Wisconsin), including most small family businesses, LLCs, corporations, and even entities designed to hold real estate and conduct no other business. Foreign entities registering to do business in the U.S., and certain excluded entities, such as highly regulated entities, public companies, and government authorities also fall under the purview of the CTA. While there are some exemptions, such as for churches, charities, and other nonprofit organizations, it’s crucial for business owners to assess their classification and compliance requirements.

Understanding Beneficial Ownership:

One of the core elements of the CTA is the obligation for reporting companies to disclose information about their beneficial owners. A beneficial owner, in this context, is an individual who owns or controls at least 25% of the reporting company or exercises substantial control over its operations (which might include any individual employed as an officer, director, manager, chief financial officer or investment trustee).

Reporting Requirements:

Reporting companies are required to furnish comprehensive information, including legal and trade names, corporate address, jurisdiction of formation, TIN or EIN, and details about beneficial owners and company applicants. Beneficial owners must be identified either through a FinCEN identifier or by providing their legal name, date of birth, address, and a unique identifying number and photograph from a current passport or a state or government issued document, such as a driver’s license.

Company Applicants:

Entities formed after January 1, 2024, must disclose information about their company applicants – individuals responsible for forming the entity or directing the filing process. If your entity is being formed by a law firm, this will generally be the paralegal or staff member that files the document and the attorney who is primarily responsible for directing or controlling the filing.

Compliance Deadlines:

Domestic reporting companies face varying deadlines depending on their formation date, with the initial reports due by January 1, 2025 for entities formed before January 1, 2024, or within 30 calendar days of formation for entities formed on or after January 1, 2024. Foreign reporting companies follow a similar timeline, aligning with the date of registration or public notice.

Updates and Corrections:

To ensure accuracy, reporting companies must promptly update any changes to previously reported information within 30 days. The CTA provides a safe harbor for filing corrected reports within 90 days of discovering inaccuracies.

Penalties for Non-Compliance:

The CTA imposes substantial penalties for reporting violations, including civil and criminal penalties of up to $500 per day for ongoing violations and fines of up to $10,000 with a maximum imprisonment of 2 years for willful non-compliance. Businesses are urged to understand and adhere to the new reporting requirements to avoid any negative legal consequences.

Seek Professional Guidance

In conclusion, compliance with the Corporate Transparency Act is complex and nuanced, with each businesses circumstances and ownership structure being unique and requiring a comprehensive analysis. Early awareness, proactive planning, and collaboration with a knowledgeable attorney can help businesses not only ensure compliance now but also establish the necessary protocols to stay in compliance in the future. If you have any questions or are interested in learning more about this topic, please contact Lin Law LLC at (920) 393-1190.

To Port or Not: The Federal Estate and Gift Tax Exemption

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Uncover the benefits of Portability in Trust and Estate Law with this informative article written by Attorney Evan Y. Lin for the State Bar of Wisconsin. Learn how leveraging portability can help you minimize estate tax liabilities and protect your family's financial legacy.
Read the full article here:  https://www.wisbar.org/NewsPublications/Pages/General-Article.aspx?ArticleID=30066

Medicaid Planning for Nursing Homes: Preserving Wealth and Ensuring Care

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By Attorney Curtis A. Edwards

When it comes to planning for long-term care and nursing home expenses, Medicaid is a critical program for many individuals and families in Wisconsin. With nursing home costs in Wisconsin ranging anywhere from $8,000 to $12,000 a month, it is essential to understand how Medicaid planning can be a valuable tool in preserving your wealth while ensuring you receive the care you need.

Medicaid vs. Medicare: Know the Difference

Medicaid, not Medicare, is the primary program that provides financial assistance for nursing home care and home-based long-term care in Wisconsin. While many people use the terms Medicaid and Medicare interchangeably, it is important to recognize that they are two distinct programs with vastly different coverages and eligibility requirements. Before delving into Medicaid planning, it’s crucial to understand the fundamental differences between Medicaid and Medicare:

Medicaid, is a state and federally funded program that provides health care and long-term care services for low-income individuals, including seniors. To qualify for Medicaid, your income and assets must fall below certain thresholds.

Medicare, on the other hand, is primarily a federal health insurance program for people aged 65 and older. While it covers some medical expenses, it offers limited coverage for nursing home and long-term care costs.

Key Aspects of Medicaid Planning

  1. Protecting Your Home

One of the most common concerns for individuals who may need to go into a nursing home is that they will lose the family home. Many people mistakenly believe that they must sell their home in order to qualify for Medicaid. However, this is not the case in Wisconsin. Your primary residence is typically not considered an asset as long as you reside in it or have the intent to return, even if returning seems impractical due to your current health condition. This means that you can retain ownership of your home while receiving Medicaid benefits for nursing home or long-term care services.

  1. Asset Transfers

Medicaid has strict rules regarding asset transfers. Most notably, the program penalizes asset transfers made within a specified look-back period (typically five (5) years). These penalties are designed to discourage “gifts” or transfers for less than fair-market value that could be perceived as an attempt to qualify for Medicaid by impoverishing oneself artificially. However, not all transfers result in disqualification and there are permissible ways to spend down assets within the guidelines to qualify for Medicaid.

  1. Spousal Impoverishment Protection

Medicaid provides protections for married couples to prevent financial hardship when one spouse enters a nursing home or requires long-term care. These protections are based on specific dollar amounts but typically allow the community spouse (the one not receiving Medicaid benefits) to retain up to 50% of the couple’s assets up to a maximum of $148,620. If the community spouse’s share of the assets is below $50,000, then 100% of the assets up to $50,000 can be retained by the community spouse. These allowances ensure that the community spouse can maintain a reasonable standard of living while ensuring the institutionalized spouse’s care needs are met.

  1. Income Allocation

Medicaid planning can also involve the strategic allocation of income. Specifically, income can be transferred from the institutionalized spouse to the community spouse to help equalize their financial situations. This can be a crucial step in ensuring both spouses have the resources they need.

  1. Gifting Strategies

While outright gifting can raise concerns, strategic gifting within Medicaid’s guidelines can be part of an effective planning strategy. It’s essential to consult with an attorney experienced in Medicaid planning to determine the best approach for your unique circumstances.

Seek Professional Guidance

In conclusion, Medicaid planning can be complex and nuanced, with each individual’s financial and familial circumstances requiring a tailored approach. With careful planning and the expertise of a knowledgeable attorney, you can ensure a financially stable and secure future for yourself and your loved ones. If you have any questions or are interested in learning more about this topic, please contact Lin Law LLC at (920) 393-1190.

Utilizing a Washington Will in Wisconsin: An Effective Probate Avoidance Tool in Marital Property Agreements

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By Attorney Curtis A. Edwards

Wisconsin’s Marital Property Act empowers married individuals to customize the disposition of their assets during their life and after death through marital property agreements. One such provision that can significantly impact estate planning is the “Washington Will” provision, so named because of its origin and use in Washington State. This provision allows a married couple to seamlessly transfer assets upon death without the need for probate, simply by providing so in their marital property agreement.

Understanding the “Washington Will” Provision:

The “Washington Will” provision enables married couples to bypass the probate process upon the death of either spouse. By incorporating this provision into their marital property agreement, couples can direct the transfer of certain assets to specific beneficiaries, i.e. persons, trusts, or entities, without the need for a traditional last will and testament and without probate.

Avoiding Probate through Nontestamentary Disposition:

Traditionally, assets are distributed according to a will, which undergoes probate – a court-supervised process that can be time-consuming and costly. However, with a marital property agreement containing a “Washington Will” provision, designated assets are transferred directly to beneficiaries through nontestamentary disposition. This means that the assets pass to the intended recipients outside of the probate process, providing a more efficient and private transfer.

Simplifying Estate Administration:

The inclusion of the “Washington Will” provision simplifies estate administration for surviving spouses and their beneficiaries. Without the burden of probate, the transfer of assets designated in the agreement can occur swiftly, allowing beneficiaries to access their inheritance promptly. For example, the “Washington Will” provision can direct that all property transfer to the surviving spouse upon the first spouse’s death without probate.

Conclusion:

The “Washington Will” provision within Wisconsin marital property agreements is an instrument that allows married couples to exercise greater control over the distribution of their assets upon death. By avoiding probate and providing a clear roadmap for asset transfer, this provision simplifies estate administration, and ensures that the wishes of each spouse are upheld.

If you have any questions or are interested in learning more about this topic, please contact Lin Law LLC at (920) 393-1190.