Wisconsin Estate Planning Tips Part 3

WILLS
by Neil L. Wojtal

 A Will is a written document that sets forth your wishes concerning the distribution of your estate, who will raise your children, whether your beneficiaries will receive your assets outright or through a trust and who will serve as your personal representative to see that your wishes are carried out. Anyone who owns assets and certainly anyone with minor children should have a Will. Without one, a guardian will be appointed for your minor children and a judge will decide who will have custody of your children. If one parent survives the other this may not be an issue, however, if both parents die at the same time, this process can be time consuming, expensive and create a lot of tension in a family. For instance if both sets of grandparents are living, there could be a dispute as to who should raise the children. You and your spouse may have a brother or sister who you would prefer to raise your children. If those wishes are not set forth in a written will they will not be followed by a judge.

Further complications arise if the deceased person has children as a result of different marriages. If you want your children from a previous marriage to receive part of your estate, you would need to cover that bequest in your will. In addition, if you desire to gift certain property such as your grandmother’s wedding ring for example, that specific gift could be covered in your will. You can also make it clear in your will that certain assets are to be distributed to a favorite charity or relative. All of your specific wishes can be addressed in your will so that there is no confusion as to your wishes and you will then have appointed a personal representative selected by you to see that your wishes are carried out.

There are simple wills that are legally valid contained in the Wisconsin State Statutes in Sections 853.55 and 853.56. In fact, Chapter 853 contains a lot of information that would enable a person to create their own legally valid will. However, as with the Powers of Attorney referenced above, these wills are very simple and may not fit your individual circumstances. If that is the case, you should have a will and powers of attorney for both health care and finance and property drafted by the Zimmerman & Steber Legal Group or another qualified attorney who will customize your will and powers of attorney to meet your specific situation and address your desires.

I hope that you will seriously consider putting these important documents in place to make your wishes known to your loved ones when you are unable to speak for yourself.

 When creating a will, the following tax consequences need to be considered. Consultation with a tax expert is advised before creation of a will to get the most favorable tax treatment for your assets and heirs.

Federal –

1. Estate tax imposed on estates of $5 MIL or more ($10 MIL for a couple) in 2011 and 2012. The amount will change to $1 Million or more in 2013 unless Congress acts.

2. Inheritance tax if amount inherited is over $3.5 Million.

3. Gift Tax – 2010 and 2011 exclusion is $13,000 annually per person. You can give away $5 Million in your lifetime without having to pay a gift tax.

 State of WI –

1. Estate Tax – none in 2011 or 2012 unless the legislature acts.

2. Inheritance Tax – None if person died after 1/1/1992.

3. Gift Tax – None after 1991.

Next Posting, Trusts Part 4

Wisconsin Estate Planning Tips Part 2

Durable Power of Attorney for Finances and Property
by: Neil L. Wojtal

A Durable Power of Attorney for Finances and Property allows you to appoint an agent who will make financial decisions for you in the event you become incapacitated. If you do not have a Durable Power of Attorney for Finances and Property in place and you become incapacitated, your family may have to ask a court to appoint a guardian for you. This can be a time consuming and expensive process. Your family must hire an attorney who will arrange for a court hearing and a doctor would have to provide evidence that you are incapacitated.

Some people believe that they do not need a Durable Power of Attorney for Finances and Property if they do not own a large amount of assets. However, without one there are specific legal actions that cannot be accomplished without specific legal authority such as applying for work related disability or income continuation benefits such as Social Security; accessing or changing retirement plans; filing insurance claims or appealing denials; signing tax forms; selling a house or contracting for health care services.

This Power of Attorney can be effective immediately upon signing or it can be a “springing power”, i. e. effective only after a doctor declares you incapacitated. Even if you elect to have the Power of Attorney effective immediately, as long as you are competent, you will be able to handle your own affairs. Your agent will only be able to act if you are not able to do so. Once the Power of Attorney is activated, the agent’s authority does not end until you die. At that point, your Will takes effect and the personal representative named in your Will has the authority to act on your behalf to wrap up your affairs and distribute your assets pursuant to your wishes. Note that the agent under the Power of Attorney and the personal representative under your Will can be the same person. The statutory form for a Power of Attorney for Finances and Property is located in the Wisconsin State Statutes, Section 244.61. Note that an appendix must be attached to the POA which lists the definitions of the various powers as contained in Sections 244.44 through 244.56.

(Next posting  Part 3 -Wills)

WISCONSIN ESTATE PLANNING TIPS PART 1

ESTATE PLANNING

Part One – Durable Power of Attorney for Health Care

BY: Neil L. Wojtal

While you are living and healthy, you value being able to make your own decisions about your finances, property, health care, and raising your children. Should you die or become incapacitated, you hope others will handle these matters for you according to your wishes.

The only way to assure that will happen is through estate planning. There are three primary Estate Plan Documents that everyone should have in place.  The three primary Estate Plan Documents are: 1) a Durable Power of Attorney for Health Care - so someone can make health care decisions for you if you are not capable of doing so; 2) a Durable Power of Attorney for Finances and Property - so someone can make financial decisions for you if you are not capable of doing so; and 3) a Will directing the distribution of your Assets consistent with your desires and Estate Plan.

DURABLE POWER OF ATTORNEY FOR HEALTH CARE

A Durable Power of Attorney for Health Care (Durable POA for Health Care) authorizes another person to make health care decisions for you when you are unable to make such decisions for yourself. There is a state form contained in the Wisconsin State Statutes (Section 155.30) that you can use or you can have the power of attorney created for you by an attorney. Note that while the state form is legally acceptable it is a “one size fits all” form. It does not address any specific wishes you may have concerning your treatment in the event you are unable to communicate with your doctors. A Durable POA for Health Care can be effective immediately upon signing or it can become effective only after two physicians state in writing that you are incapable of making your own decisions. If you do not have a Durable POA for Health Care in place when you become incapacitated, no one will have the authority to speak for you concerning any decision regarding your continuing care. No one will be able to decide if extraordinary measures should be taken by your doctors to prolong your life if, for example, you are considered brain dead. Any such decision will then have to be made by a court after hearing testimony from your doctors. This is a time consuming and expensive process that will create stress for your loved ones since they are helpless to proceed without legal action since your specific wishes are not contained in a written document.

You only have to look at the Terri Schiavo case to see an example of a legal battle that lasted 7 years at great cost and family stress by all the involved parties. Ms. Schiavo was declared brain dead by her doctors and her husband, as her legal guardian, asked that her feeding tubes be disconnected allowing her to die. Ms. Schiavo’s parents insisted that she be kept alive in the hopes that she would someday recover some use of her brain and based upon her religious beliefs. The battle between her husband and her parents resulted in 14 appeals, and numerous motions, petitions and hearings in the Florida courts; five suits filed in federal district court; Florida legislation struck down by the Florida Supreme Court; a subpoena by a congressional committee to qualify Schiavo for witness protection; federal legislation and four denials of certiorari from the U. S. Supreme Court. While this case is an extreme example, all of this litigation could have been avoided had Ms. Schiavo completed a Durable POA for Health Care with specific instructions as to the use of extraordinary life saving efforts such as feeding tubes in the event her doctors declared her brain dead. A detailed Durable POA for Health Care will contain these instructions and appoint a person who has the power to carry out your wishes.

Note that a Durable POA for Health Care is not the same as a Living Will. A Living Will is a separate document, not a part of your Will. A Durable Power of Attorney for Health Care allows your agent to make health care decisions for you. A Living Will allows you to state in writing your preferences about life prolonging medical treatment. A Living Will only takes effect when you become incapacitated, cannot speak for yourself and there is no hope for recovery. A Durable POA for Health Care will cover the same scenarios as a Living Will but, if you elect to have it effective immediately upon signing, it will also cover any instances where you may be temporarily incapacitated such as a medically induced coma for instance. The standard form for the Living Will is located in the Wisconsin State Statutes in Section 154.03. Again, while this form is legally adequate, it does not provide your detailed instructions for various scenarios. A Durable POA for Health Care drafted by an experienced attorney will detail your wishes regarding several scenarios and give specific instructions as to what extraordinary measures you want to be taken by your doctors to prolong your life in the event of a life ending scenario or a temporary condition where you are unable to speak for yourself.

To Be Continued - Durable Power of Attorney for Finances and Property

Employment Law Tips Part 5

                    Zimmerman & Steber Legal Group, S. C.
                    By: Neil L. Wojtal

                    V.   OTHER ISSUES

A.  Classification of Employees as Independent Contractors: the Wisconsin Statutes, Sec. 102.07(8), requires an employer to meet all nine tests listed in the statute before the employer can classify an employee as an independent contractor. The tests are:

1. Maintain a separate business

2. Obtain a Federal Employer Identification number from the Federal Internal Revenue Service (IRS) or have filed business or self-employment income tax returns with the IRS based on work or service in the previous year.

3. Operate under specific contracts

4. Be responsible for operating expenses under the contracts

5. Be responsible for satisfactory performance of the work under the contracts

6. Be paid per contract, per job, by commission or by competitive bid

7. Be subject to profit or loss in performing the work under the contracts

8. Have recurring business liabilities and obligations

9. Be in a position to exceed or fail if business expenses exceed income

In the event an employer misclassifies an employee as an independent contractor, the employer can be subject to several issues such as tax liability, unemployment compensation issues and workers’ compensation issues to name a few.

Information on this issue can be found on the DWD website at:

http://dwd.wisconsin.gov/wc/employers/independent_contractors.htm

B.  Termination of Employment: Every employer should review their termination process, not only for compliance with federal and state laws such as discrimination, but also to prevent lawsuits arising out of the process. Foe example, no employee issue should be discussed publicly with an employee. Any employee who is subject to disciplinary action should be taken to a private room for the discussion. Any termination should be squarely based upon rule violations or business considerations. If an employer has a written disciplinary procedure, it must be followed uniformly for each employee. In addition, any disciplinary action taken by the employer must be documented in the employee’s personnel file. If an employee wishes to comment on the action, those comments should be kept in the employee’s personnel file as well. Any decision to terminate should have documentation in the employee’s personnel file that supports the business reasons for the termination. If an employer is unsure that the business reasons justify a termination, the employer should consult with an attorney prior to terminating the employee.

I hope that the information provided will be of help to all employers seeking to improve their employment processes.

The information contained in this document is intended for the sole purpose of providing general legal information and is not intended as legal advice of any kind.

This information may not apply to your specific issue, therefore, do not act upon this information without consulting Zimmerman & Steber Legal Group, SC or another qualified attorney.

Employment Law Tips Part 4

               Zimmerman & Steber Legal Group, S. C.
               By: Neil L. Wojtal

IV. EQUAL EMPLOYMENT OPPORTUNITY/FAIR

       EMPLOYMENT REGULATIONS

A.     Every employer should also review their hiring, firing and discipline

procedures to ensure that they are in compliance with the federal and state equal employment opportunity and fair employment laws. The Wisconsin Fair Employment Act (Sec. 111.31 – 111.395 of the Wisconsin Statutes) provides that it is unlawful for employers, employment agencies, labor unions and licensing agencies to discriminate against employees and job applicants because of any of the following:

age, ancestry, arrest record, color, conviction record, creed, disability, genetic testing, honesty testing, marital status, military service, national origin, pregnancy or childbirth, race, sex, sexual orientation, or use or nonuse of lawful products off of the employer’s premises during nonworking hours. Employees may not be harassed in the workplace, based on their inclusion in any of these protected categories. There is a 300 day time limit for filing a discrimination complaint.

In addition, an employer cannot retaliate against an employee for filing a complaint, for assisting with a complaint or for opposing discrimination in the workplace.

You can find an explanation of all of these protected categories on the DWD website at:

http://dwd.wisconsin.gov/er/discrimination_civil_rights/fair_employment_law.htm

Wisconsin also has several laws that protect employees from retaliation for reporting issues related to specific industries and working conditions. Such as labor standards, elder abuse, public employee health and safety, health care workers and toxic chemicals in the workplace. You can view these laws on the DWD website at:

http://dwd.wisconsin.gov/er/discrimination_civil_rights/retaliation_protection.htm

B.  Sexual Harassment: An employer must eliminate any workplace condition that could create a hostile environment or be considered sexual harassment under the state and federal EEO/Fair Employment laws. It is recommended that an employer create a formalized anti-harassment policy which includes an investigation procedure. You should also institute a periodic training procedure for all employees. You should look at your workplace to determine if anything within the workplace could be creating a hostile work environment such as obscene or pornographic materials in public view, inappropriate language use by employees and the general interaction between employees in the workplace. The DWD has a publication available which can help with this evaluation at:

http://dwd.wisconsin.gov/er/discrimination_civil_rights/publication_erd_7334_pweb1.htm

Part 5 to follow

Employment Law Tips Part 3

Zimmerman & Steber Legal Group, SC
By: Neil L. Wojtal

III.   LEAVE AND RETURN TO WORK OBLIGATIONS

One area that can be very costly for employers is violations under various laws that require an employer to provide leave to employees or return employees to work after a temporary absence.

A.     Workers’ Compensation Leave: There is no legal requirement that an employer hold a position open or create a new position for an employee once an injured employee is released by their doctor to return to work. However, if an employer has suitable employment available within the returning employee’s physical and mental limitations, the employer must offer the employment to the returning employee. If an employer, without reasonable cause, refuses to rehire the returning employee when suitable employment is available, the employer may be liable for compensation of wages lost during the period of refusal, up to one year of wages. Note that this is an uninsured obligation of the employer. The rehiring obligations are set forth in the Wisconsin state statutes, Section 102.35.

B.     Federal and Wisconsin Family and Medical Leave Acts: Generally, both Acts only apply to employers with more than 50 employees. Note that the Federal FMLA does not supersede the Wisconsin FMLA so employers that are covered by both Acts must comply with the provisions of each Act. The Wisconsin Department of Workforce Development has a publication entitled “Comparison of Federal and Wisconsin Family and Medical Leave Laws” which describes the differences and similarities between the two Acts. You can access the publication online at:

http://www.dwd.wisconsin.gov/er/family_and_medical_leave/publication_erd_9680_p.htm

One other leave law should be considered if an employer has any employees who are called up for military service. The federal Uniformed Services Employment and Reemployment Rights Act (USERRA) protects an employee’s job for a period of time when the employee is called up for active duty. The Department of Labor has a website that explains an employer’s obligations under USERRA at:

http://www.dol.gov/elaws/vets/userra/userra.asp

C.     Americans with Disability Act: The Americans with Disability Act (ADA) must also be considered when an employer is reviewing potential leave obligations.

While the ADA does not require an employer to accommodate an employee who must care for a disabled family member, the FMLA may require employer to take such steps. Some courts consider that leave, with the corresponding obligation to rehire the employee, is a “reasonable accommodation” under the ADA. Employers with more than 15 employees who are covered by the ADA must determine whether leave may be required under the ADA. The EEOC has a publication available online that explains the interaction of the Acts at:

http://www.eeoc.gov/policy/docs/fmlaada.html

D.     Short Term and Long Term Disability Policies: If you have your own policies for your employees you must review your policies to make sure that your policies conform to any requirements of the ADA, FMLA and the workers’ compensation laws.

Part 4 to follow

Employment Law Tips Part 2

Zimmerman & Steber Legal Group, SC

By: Neil L. Wojtal

Hiring Practices (cont.)

E.     I-9 Forms: Another form which is required to be completed at the time of hiring is the I-9 form issued by U.S. Citizenship and Immigration Services (USCIS). USCIS is part of the Department of Homeland Security. Given the emphasis on homeland security after the 09/11 attack, there can be serious penalties if an employer fails to maintain an I-9 form for each employee they hire. The latest I-9 forms can be found at:         

http://www.uscis.gov/files/form/i-9.pdf

Read the instructions carefully to make sure you are completing the form correctly.

Note that employers can sign up with the USCIS E-Verify Program. E-Verify is a voluntary internet based system that compares information from an employee's Form I-9 to data from the U. S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. For more information go to http://www.uscis.gov/portal/site/uscis and click on "E-Verify Homepage" in the right hand column.

F.     Personnel Files: How and where you store your employee files is also important. Proper record keeping for all employees is essential. Employers with more than 15 employees are subject to the Americans with Disabilities Act (ADA) which requires separate personnel files for each employee for the purpose of segregating medical information from non-medical information. The medical information files must be maintained in a safeguarded place and access to the files must be limited to those persons authorized under the ADA to obtain such medical information. More information on the ADA can be found at:

www.ada.gov/business.htm

You can also find an ADA Guide for Small Businesses at:

www.ada.gov/publicat.htm

G.     Recordkeeping Requirements: In addition to maintaining the forms described above, employers are required under state and federal law to maintain specific information about each employee they employ. These records are required to be kept for at least three years. The requirements are listed at on the Wisconsin Department of Workforce Development website along with other useful information for employers in ERD Publication-4906-PWEB. You can reach this information using the following:

http://dwd.wisconsin.gov/dwd/publications/erd/pdf/erd_4906_pweb.pdf

H.     Handbooks and Manuals: All employers who use any employee handbooks or manuals that set forth policy should include language in your handbooks or manuals that preserves the “at-will” status of their employees. If you include mandatory disciplinary and termination procedures in your handbooks or manuals you must follow those procedures for each employee making sure that all steps are followed. Deviations from written policies and procedures can lead to claims of discrimination from individual employees.

II.                COMPENSATION ISSUES

The next step is to review your compensation policies and procedures.

A.     Minimum Wage: The general minimum wage requirement, effective July 24, 2009, in $7.25 per hour. This wage rate applies to most employees although there are some exceptions. The Wisconsin minimum wage rates can be found at the DWD website at:

http://dwd.wisconsin.gov/dwd/publications/erd/pdf/erd_9247_p.pdf

B.     Exemptions and Overtime:  Compensation claims can arise when employees are misclassified as exempt from overtime when the employee’s duties and wage payment method clearly indicate that they are hourly employees subject to overtime. The rules for exempt/non-exempt classifications and overtime calculation requirements are found in the Wisconsin Administrative Code, DWD 274.04 and in the Fair Labor Standards Act regulations at 29 C. F. R. 541 et seq. There is a helpful publication available online from the DWD entitled “Wisconsin Hours of Work and Overtime Law” located on the DWD website at: http://dwd.wisconsin.gov/er/labor_standards_bureau/publication_erd_8298_pweb.htm

This publication also lists the timekeeping requirements in Wisconsin. All time that an employee works must be recorded.

       

Another useful publication is the “Fact Sheet on Payment of Salary” located at: http://dwd.wisconsin.gov/dwd/publications/erd/pdf/erd_13109_p.pdf

During your review of your wage payment policies, you should identify which employees are not paid overtime and you should review the rationale used to make this determination. Many employers erroneously consider the term “salaried employee” to be synonymous with “exempt employee”. This is not the case. The “Wisconsin Hours of Work and Overtime Law” publication cited above points out the criteria an employee must meet to be classified as exempt. You should review your payment policies and procedures to make sure that all federal and state overtime laws are being followed.

C.     Wage Deductions: You should review ERD Publication 4906, cited in I, G   

above, for the state rules concerning wage deductions. You can also find this information in the Wisconsin Statutes in Sec. 103.455. Generally, unless the employee agrees, you cannot deduct from the employee’s wages for defective or faulty workmanship, lost or stolen property or damage to property.

Part 3 to follow