Attorney Shannon Wynn: Transfer on Death Deeds eliminate probate

When any of Wynn at Law LLC's clients own real property in Wisconsin, we look at a Transfer on Death Deed (commonly called a TOD Deed or a TODD) to see if it is a suitable fit for their estate plan. It can sometimes wipe out the need to go to probate court, which is a time and cost saver.

As our earlier article pointed out, if you have $50,000 or more in probate assets, probate court comes into play when distributing assets. Probate assets are all assets NOT automatically transferred to another person when the owner passes. Life insurance proceeds, for example, skip probate because a beneficiary is identified. So, if assets can avoid probate, why not place a TODD on an asset like a vacation home to transfer it directly to beneficiaries, such as the kids?

The answer in some cases is that if you need to protect assets – for or from your children – you might not want to transfer them on your death. For the minor kids, you might want to transfer the asset to a trustee for their benefit until they're older. In the case of adult children who may have creditor problems or a looming divorce, you might again want a trustee instead of transferring the property to them directly. Otherwise, a TODD making assets 'unprobatable' is an alternative for every Wynn at Law LLC client because the property doesn't need to be owned free-and-clear. You can have a mortgage, a second mortgage, even a line of credit against the property and still use the TODD to pass it on… and skip probate.

Let's say you had a car and some bank assets totaling $49,995 and a $89,000 getaway cabin up north. All in, the assets would require probate, but if a TODD was placed on the cabin, the cabin passes to your heirs (they still get the debt if it was mortgaged, by the way) and the rest of the estate would avoid probate because it's under the $50,000 limit.

Your accountant, or your beneficiary’s, will point out that there may be tax benefits to this strategy as well, because the transfer isn't considered a 'gift' subject to gift tax. The TODD may also reduce or eliminate capital gains taxes if and when the property is sold by the beneficiary.

Even if you have the Transfer on Death Deed, you can still choose to sell a property while you're living: It's yours! The TODD designation does not give the beneficiary 'ownership' of the property while you're alive… if the document is drafted properly. Call an attorney.

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Ekaterina Kondratova, used with permission.

Attorney Shannon Wynn: Minding summer’s attractive nuisances

 

Warmer weather has at last arrived. School’s winding down. That means more kids out and about. When a kid spots something in your yard and says, ‘Wow, that looks like fun,’ there is probably the potential for litigation. Wynn at Law LLC’s team isn’t the downer you’ll neglect to invite to your neighborhood party, but we do help clients stay clear of ‘attractive nuisance’ trouble. I’m talking about a pool. A trampoline. A ladder. A junked fridge. Kids are drawn like magnets to them and other adventures.

When adventure turns into trespass, misadventure and injury and it ends up in court, the property owner is under fire… not the trespasser.

Defining an attractive nuisance is lengthy but pretty cut-and-dried. It’s anything artificial on your property you know that can cause harm, especially to people too young or inexperienced to understand the risk, and you fail to take reasonable measures to eliminate the danger. It’s a mouthful. But so is defending your attractive nuisance in a court case.

Here’s a link to an interesting piece from the American Bar on home/property owner risks, and here are three common nuisances with some remedies that will help keep summer fun, safe, and litigation free.

·         Pools – even the small splash pools – are the leader in litigation. Property owners sometimes prevail in swimming pool injury cases, when they can show a trespassing child got into pool areas despite the owners' reasonable measures (high fences, locked gates) to keep them out.

·         Home construction projects draw in little boys like moths to a flame. Loose lumber scraps in the yard or dumpster are like gold to them. Newly dug foundation holes are an invite to treasure hunt. You should wall or fence off these areas well. Courts sometimes side with or exempt builders and construction companies in attractive nuisance cases: Their very businesses require them to maintain a temporarily hazard. However, the property owner should see the risk as incentive to minimize dangers to children.

·         Play structures are designed for kids, but are a risk to them as well. A fenced yard helps keep out younger or less experienced kids when it comes to skateboard jumps, trampolines, jungle gyms, and tree forts.

See the common theme here?  Fences. There’s an old saying that good fences make for good neighbors. The minor expense of a fence also makes good sense for protecting you from litigation.

 

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 

 Photo by Scott Stevens, used with permission.

Attorney Shannon Wynn: Being neighborly while protecting your rights

When you buy a property, one of the things Wynn at Law, LLC looks at closely is whether or not the property has easements. The most common easement is the right to travel over your land, like you'd give to the power company. This is known as a 'right of way.' Property owners commonly grant easements for the placement of utility poles, utility/cable/phone trenches, water lines, or sewer lines. If an easement is in place, the legal title to the property still remains in your name as the owner. The person or company granted the easement owns the right of way.

Seems pretty cut and dried. Everything is, until it isn't. With the amount of lake property, hunting land, and farmable acreage in Walworth county, there sometimes is access given to neighbors to have right of way to the water, woods, or fields. This isn't the same right of way you give WE Energies. This usually is considered 'permissive use' – best kept in writing with an attorney – or can be an actual easement. An actual easement by a neighbor over your property can devalue the property you're buying… and if you're a seller, it could scare off buyers who don't want neighbors on their land the same way you allow.

Easements are difficult to reverse, and you probably wouldn’t want to reverse it when you're talking about a utility company easement. We look at them to give you a little foresight just in case there is a conflict down the road. Permissive use, on the other hand, can be reversed. You can just revoke the permission, again, in writing.

Wynn at Law, LLC helps you walk that fine line between being neighborly and exposing your property and yourself to potential litigation. Easements do open the landowner up to some liability and some trespass you may not foresee. It's best to work with a neighbor on an airtight agreement on what you're granting, for which use, and when. Putting it in writing with signatures from all parties is the best way to protect your largest investment even when the situation for which you grant permission seems harmless at first. Verbal agreements do not stand up in court.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 

Photo by John Panella, used with permission.