Our blog provides information on all aspects of estate planning, elder law,
and special needs planning.
and special needs planning.
4 Reasons to Consider a Custom Financial Power of Attorney
We all want to save time and money when possible. So, when clients ask me if pulling a generic power of attorney form off the web, like the standard Wisconsin power of attorney for finances, will work, I understand the motivation to put a crucial document in place quickly and economically. A generic form is valid and will give your agent certain powers to manage your finances. However, they do have limitations to be aware of.
Often a generic form will lack provisions that may be necessary for making complex financial decisions to ensure your plan is carried out. We often face navigating more complex financial situations when planning for Medicaid. You should consider the following four factors before using a generic form.
Funding Your Trust
Nearly as important as creating the trust is the concept of "funding the trust." The trust itself is the "vehicle" for your assets; your assets are the "passengers" and must get into the vehicle in order for the trust to do its job properly. If you don’t properly fund the trust, your assets may have to go through Probate, simply to get into the trust! That can defeat some of the purposes for creating a trust.
For Real Estate, this means that deeds need to be prepared and properly executed for transferring ownership of real estate into the trust. Some people prefer not to record the deeds during their lifetime for a variety of reasons. This is acceptable, but we do recommend that the deeds be prepared and be in recordable form. However, sometimes original documents are misplaced or accidentally destroyed; keep this in mind. For vehicles, the same is true. Titles should be prepared in assignable form so that they can be immediately transferred to the trust. Again, some people, for convenience, prefer not to make the actual conveyance through the motor vehicle department during their life.
You should be sure to have your Bank Accounts, Stocks and Bonds, properly transferred so that they are in your trust. Most bankers and stockbrokers are familiar with this process and can assist you in making these transfers, as appropriate.
In addition to transferring assets at the time of creating the trust, it is important that any assets received later should likewise be transferred, or funded, into the trust. For example, many people will change the vehicle that they own, many times. It is important that not only the first car that you have, or car that you own at the time of creating the trust, be placed in the trust, but likewise that any replacement vehicles be properly titled or funded into the trust. So should you receive assets from some other source (gift, inheritance, earnings, etc.) they should likewise be funded or titled in the trust.
The proper title for any of these assets would be, for example: "John A. and Jane A. Smith, trustees of the John A. & Jane A. Smith Trust dated December 31, 20XX, or its successor trustee."
As described above, the Marital Property Agreement, if appropriate, can fund assets into the Trust, at either the death of the first spouse, or the second spouse. The advantage of funding by way of the Marital Property Agreement, verses a Pour Over Will, is that the Marital Property Agreement does not have to go through probate, whereas a Will does.
If you have questions regarding your Trust or any elements of your Estate Plan, please contact our office.
Attorney Aric Burch
Grosskopf & Burch Law Firm