Posts Tagged ‘real estate’

Conservation Easement: A Beautiful Thing

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A conservation easement is an interest in real property. It is established by agreement between a landowner and a qualified private land conservation organization (often called a “land trust”) or a government organization (often the DNR). It is put in place to restrict the exercise of rights otherwise held by a landowner in order to achieve stated conservation purposes.

The most recent Conservation Easement project underway here at our office presents a great story. Our Clients are both nature buffs. They truly love the outdoors and they want to make a difference in society.

After thinking it through, they decided that the best way to accomplish that goal was by donating 75 acres to a local nonprofit Audubon society. They also made the land subject to a conservation easement to be held by a Madison area land trust.

The Property contains areas of prairie grassland and oak woods/oak savanna. The public will have access to the property for bird-watching, hiking and other educational and recreational activities.

The preservation of this slice of heaven for the scenic enjoyment by and the outdoor education of the public is very important to the Landowner. What a terrific thing for the people of Wisconsin and beyond.


News Flash: Few People Actually Plan for Death or Incapacity

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Estate Planning Note:

AARP shared an article that reminds us how few of our neighbors have done Estate Planning.

See: http://www.aarp.org/…/info-2017/half-of-adults-do-not-have-…

The failure to plan for your death or incapacity can be painful for the family members left behind. This really rings true if you have underage kids or an asset like a family farm or other type of business that needs to be thoughtfully passed on to the next generation. The family assets can sometimes be tied up for years with fees and cost racking up.

With this in mind, this just might be the year to finally get this particular project done.

Have a great day.


Transfer-On-Death Deed: The Best Thing Since Sliced Bread

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A transfer-on-death deed, or TOD deed has proven to be a simple, inexpensive, and effective tool to transfer a real property interest at the death of the owner, and has become very popular with attorneys, property owners, and beneficiaries alike. The reason TOD deeds have become so popular is that the transfer of the land under a TOD deed can work to avoid both the after death expenses of probate, and the upfront planning expenses of a trust.

The TOD deed has been available in Wisconsin since 2005 and in Minnesota since 2008. If a landowner in these jurisdictions properly completes and files a TOD deed with the register of deeds, title to the real estate passes directly to the beneficiary or beneficiaries named in the TOD Deed when the landowner dies. This is similar to how title passes in a joint tenancy deed or a pay-on-death designation for a bank account.  The beneficiary takes ownership of the property upon the death of the present owner without the need to probate the property.

A landowner can change her mind with a TOD deed designation too. If circumstances change after a landowner designates someone to receive the real estate using a TOD deed, the landowner can revoke her TOD deed or simply replace it with another one naming someone else. If the property is sold by the landowner to a third party, the TOD deed terminates at that time.

The TOD deed can also reduce some risks from third parties. This is because even though individuals are named as beneficiaries under a TOD deed, they have no ownership rights until after the death of the landowner. This lack of ownership rights in the real estate helps avoid problems. For example, if a landowner adds her son, her grandson, or her daughter as beneficiary under a TOD deed, the real estate cannot end up as a divisible asset in her son’s divorce, a liquidated asset in her grandson’s bankruptcy, or with liens on it from her daughter’s creditors.

The TOD deed may be the most effective way for a landowner to pass real estate to desired beneficiaries. However, careful consideration should always be given to determine if the TOD deed is appropriate for your particular circumstances.


Is a Cottage Limited Liability Company Right for You?

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The family cottage is a location where good memories are made.  People who experience life at a family cottage reflect on the peace and quiet that can only happen when life’s intrusions are so effortlessly left at home.  This makes it even more tragic when the time comes to change ownership–for example, when a grandparent passes.  The details of the transfer can ruin family relationships.  Often times, some members of the family want to hang on to the cottage and keep the family traditions alive, while other family members want to sell the cottage and split the money.  If the folks who want to keep the cottage cannot afford to buy-out the others, the family can be headed down a painful road.

In Wisconsin, as in many states, the law can fall short as far as easing these burdens.  Title to property may be held as “tenants in common”.  This means that a co- owner who wants to sell the cottage can force a complete sale of the property, even if other family members want the cottage to remain in the family.  Alternatively, through the use of a limited liability company, one can put together a solid cottage succession plan to help maintain harmony and ensure that the family cottage stays in the family for generations.  The operating agreement for the company can be structured so that it is not possible to sell the cottage without the mutual agreement of the members.  Heirs cannot argue about whether or not it can be sold.  In addition, if an heir is to buy-out another heir, a mechanism can included in the agreement for establishing the purchase  price and other terms for the sale.

The limited liability company structure is especially nice because it allows families to create their own rules to reflect their own values, history, personality, etc.  A plan can be rigid (i.e. the plan can state that nobody except for founders can be owners of the cottage).  On the other hand, other parts of the agreement can be very flexible (i.e. the schedule of use can be amended on a majority vote of the members).

The limited liability company would actually take title to the cottage.  The family members would own the cottage indirectly by owning an interest in the LLC.  Transferring the cottage to a legal entity versus an individual means that entity law governs the relationship of the members.

One of the beauties of a cottage limited liability company is that it can be structured to incorporate democratic principles.  If desired, the members can vote on everything from what color to paint the cottage to rebuilding it completely.   The members can also establish a time-sharing schedule and how expenses will be paid.  In a nutshell, it would be a shame if a place that holds so many fond memories was lost after the death of a loved-one.  It is important for people who own a family cottage to think outside the box and plan appropriately for the future.