Elder Law & Special Needs Journal publishes article by Lin Law

The following article by Lin Law was published in the October 2020 issue of the Elder Law & Special Needs Journal of Wisconsin.


In re the Estate of David F. Oaks: ‘Gifts Causa Mortis’ Explained


This recent court of appeals case concerns the doctrine of “gift causa mortis,” a gift made in contemplation of the donor’s imminent death. Gift casua mortis, BLACK’S LAW DICTIONARY (11th ed. 2019). This doctrine operates as an exception to the general rule that testamentary dispositions must comply with the statutory requirements for a valid will. In re the Estate of David F. Oaks, ¶ 13 (citing Meegan v. Netzer, 2012 WI App. 20, 339 Wis. 2d 460, 810 N.W.2d 358). A gift causa mortis becomes effective upon the donor’s death if the following elements are satisfied:

  1.  the donor had an intention to make [the] gift effective at death;
  2.  the donor made the gift with a view to the donor’s death from present illness or from an external and apprehended peril;
  3.  the donor died of that ailment or peril; and
  4.  there was a delivery of the gifted property.

Id. (citation and internal quotation omitted).

Shortly prior to his death by suicide, the decedent, David Oaks, wrote a note bequeathing all of his “worldly belongings” to his significant other, Lynne Stouff, with whom he had lived for the last 10 years. The note read as follows: “Lynne Stouff has been my companion and my crutch for a long while. As I leave this existence I want all worldly belongings to be assigned to Lynne.” Oaks died intestate, with one estranged child from a prior relationship. His daughter, Cheri Wardell, filed a petition for formal administration of the estate, and was named personal representative. Stouff filed a claim against the Estate, contending she was entitled to the entirety of Oaks’s assets under the doctrine of gift causa mortis. The Estate denied Stouff’s claim on the basis that a gift causa mortis cannot occur when the donor commits suicide, and that Oaks had failed to deliver the gifted property to Stouff. The circuit court, however, rejected the Estate’s arguments and granted Stouff’s motion for summary judgment. On appeal, the court of appeals affirmed the circuit court.

The court of appeals held that a gift causa mortis made in contemplation of the donor’s suicide is not per se invalid. Id. ¶17. Rather, the beneficiary may show that the donor made the gift in anticipation of his or her death from a “present mental illness.” Id. This issue being a question of first impression, the court of appeals cited case law from other jurisdictions finding that an effective gift causa mortis may occur in the context of suicide as the result of the donor’s present mental illness. Id. ¶¶ 23 – 25 (citing In re Van Warner’s Estate, 238 N.W. 210 (Mich. 1931); Scherer v. Hyland, 380 A.2d 698 (N.J. 1977)). In this case, the decedent had a well-documented history of depression, which was found to have resulted in his death by suicide. Id. ¶ 28. In ruling in Stouff’s favor, the court of appeals noted that proof of a donor’s death by suicide would not be sufficient to satisfy the second and third elements of a gift causa mortis in all cases, and that the issue of whether the donor’s death was caused by his or her present mental illness would generally be a question of fact. Id. ¶ 30.

Second, the court of appeals held that Oaks completed delivery of his possessions to Stouff prior to his death because she was the legal owner of the home that she and Oaks shared, which held all of Oaks’ tangible personal property, and Stouff had access to “indicia of ownership” for the remainder of Oaks’ possessions, including keys to his vehicles, checkbooks, and bank account information. Id. ¶ 38. Although physical delivery may be necessary in some circumstances, Wisconsin case law provides that the required form of delivery will vary depending upon the nature of gifted assets and the situation of the involved parties. Id. ¶ 32 (quoting Sorenson v. Friedmann, 34 Wis. 2d 46, 55, 148 N.W.2d 745 (1967)). Where the parties are members of the same household, as in this case, the donor’s declaration of his or her donative intent, followed by the donor treating the gifted asset as the donee’s property, will generally be sufficient to effectuate delivery. Id. ¶ 37 (citing Potts v. Garionis, 127 Wis. 2d 47, 377 N.W.2d 204 (Ct. App. 1985); Horn v. Horn, 152 Wis. 482, 140 N.W. 58 (1913)). Based on these holdings, the court of appeals affirmed the circuit court’s grant of summary judgment in Stouff’s favor.

One question that Oaks left unanswered is whether a valid gift causa mortis is capable of overriding a preexisting testamentary disposition. With regard to a decedent who has an existing will, the answer is most likely “no,” unless the gift causa mortis involves a writing sufficient to supplement or revoke the decedent’s existing will. See Wis. Stat. § 853.11. The question remains, however, for intestate decedents who have utilized alternative methods of testamentary disposition.

In this case, the doctrine of gift causa mortis resulted in the decedent’s intended beneficiary receiving the entirety of his estate, despite Oaks’ failure to execute a will. The doctrine should not, of course, be seen as a method of bypassing the usual testamentary formalities, particularly in light of its narrow application. It is, however, an issue for practitioners to remain aware of when representing interested parties in an estate administration.

Happy National Healthcare Decisions Day!


National Healthcare Decisions Day, celebrated annually on April 16, is a nationwide initiative to inspire, educate, and empower the public and health care providers about the importance of advance healthcare planning. But what, exactly, is advance healthcare planning? Broadly speaking, advance healthcare planning is the process of formulating and documenting your beliefs and wishes in connection with your health care.

Issues to consider in this process include nursing home admission, end-of-life care preferences, and organ donation, just to name a few. After deciding what your wishes are in this regard, the next most important decision is selecting initial and successor health care agents. Your agents should be people that you trust to follow your wishes and make health care decisions on your behalf, if you should become incapacitated. Finally, once you know “what” and “who,” it is imperative that you memorialize your wishes in writing. In the State of Wisconsin, this can be accomplished via various advance health care directives, including Powers of Attorney for Health Care, HIPAA Authorizations for Release of Protected Health Information, and Declarations to Physicians (also referred to as a “Living Will”).

The Conversation Project, the nonprofit organization charged with managing and promoting National Healthcare Decisions Day, has various resources available on its website, including a COVID-19 specific conversations guide. The State Bar of Wisconsin has also made it’s excellent publication, A Gift to Your Family: Planning Ahead for Future Health Needs, available as a free download through April 25, 2020, in recognition of National Healthcare Decisions Day. We hope that these resources will be helpful to you and your family, no matter where you are in the process of your own advance healthcare planning.

If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.

CARES Act Authorizes $349 Billion in Forgivable Small Business Loans

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), authorizing the United States Small Business Administration (the “SBA”) to issue up to $349 billion in forgivable loans to eligible small businesses through June 30, 2020. SBA §7(a)-approved lenders will be begin processing loan applications as soon as April 3, 2020.

Under Section 1102 of the CARES Act, the “Paycheck Protection Program,” employers with five hundred (500) or fewer employees can borrow up to an amount equal to 2.5 times the employer’s average monthly payroll expense or $10 million, whichever is less. The Paycheck Protection Program waives a number of the requirements that are typically applicable to SBA loans, caps interest rates at four percent (4%), and provides for complete payment deferment (including payment of principal, interest and fees) for not less than six (6) months and not more than one (1) year.

Section 1106 of the CARES Act provides that the principal balance of a loan obtained under the Paycheck Protection Program is forgivable in full, provided that the loan is used to pay for business continuity expenses, including: payroll (wages, health insurance, sick leave, retirement, and other benefits), mortgage interest expenses, rent expenses, and utility expenses. However, the total amount of the principal balance that is forgiven will be reduced if an employer lays off employees who are not subsequently rehired or reduces compensation to employees by more than twenty-five percent (25%) during the covered period (March 1, 2020, through June 30, 2020).

The SBA recently updated its website to include information regarding Paycheck Protection Program loans, including a sample application form.

If you have any questions regarding this topic, please contact Lin Law LLC at (920) 393-1190.

The Business News publishes guest legal column by Lin Law LLC

The following article by Lin Law LLC’s Attorney Emily E. Ames was published in the March 30, 2020 issue of The Business News as Now is good time to review succession plan.


Preparing During a Pandemic: Does Your Business Have a Succession Plan?

In the midst of a global pandemic and the corresponding uncertainty regarding the future, now is a good time to review your business’ succession plan (if you have one) or to start putting one in place (if you do not). Unsure whether you have a business succession plan? Two basic but important questions for business owners to consider are: “what will happen to my business when I’m ready to retire?” and “what will happen to my business if I die unexpectedly?” If you do not have a good answer to one or both of these questions, it’s time to do some work.

At a minimum, it is important to ensure that your business has all the necessary documentation in place. For a limited liability company, this will primarily consist of a comprehensive Operating Agreement, and should also include consent resolutions executed by the members, which document important transactions and business decisions. For a corporation, this means up-to-date Bylaws, accurate and regularly-maintained corporate minutes, and a Shareholders’ Agreement or other similar Buy-Sell Agreement. The business should, ideally, have an Employment Agreement in place for all key employees.

There are also practical considerations to keep in mind. Does someone other than you have the log-in information for all hardware and important software? Does someone other than you have access to the information necessary to maintain essential business operations? If the answer to either of these questions is “no,” begin documenting these items as soon as possible.

Another issue to consider is whether you intend to pass the business on to an employee or business partner, or whether you would prefer to sell it to a third party. If the former, it is important to begin identifying potential successors and training them as soon as practicable. The sooner you start, the better. If the latter, consider how you will go about identifying an appropriate buyer and what you can do to make the business more marketable. In both cases, it’s important to understand what your business is realistically worth.

Keep in mind the interplay between your business succession plan and your estate plan, and ensure that the two are coordinated. Ideally, your Operating Agreement or Shareholders’/Buy-Sell Agreement will specify what happens to your ownership interest upon your death. These documents will frequently grant a right of first refusal for the corporate entity or other owners to purchase your ownership interest. If this is the goal, it’s important to have life insurance in place that will prevent any liquidity issues in the event the corporate entity wishes to exercise that option. However, if none of the other owners or the company are willing or able to exercise such option, your ownership interest will generally be distributed in accordance with the terms of your Will or Revocable Trust, if you have one, or the default laws of inheritance, if you don’t.

These issues are just a starting point, but they illustrate the importance of having an official business succession plan in place. While having no official succession plan for your business is still a plan, it’s not a very good one.

If you have any questions regarding this topic, please contact Lin Law LLC at (920) 393-1190.

Lin Law LLC Is Here for You

Pursuant to Governor Evers’ Safer at Home Order, dated March 24, 2020, law firms are deemed an essential business and, as such, may continue to operate during the ongoing COVID-19 pandemic. Lin Law LLC will remain open and continue to serve our clients during this difficult and unprecedented time.

We will, however, conduct client meetings and other business via teleconference or videoconference to the extent reasonably possible, in order to protect our clients and staff. If you need to visit Lin Law LLC in person, we ask that you call ahead and maintain social distancing while visiting our office. We will update you, our valued clients, on any changes to these practices.

Wishing you and your family continued safety and health,

Lin Law LLC

Expanded Leave Under the Families First Coronavirus Response Act

On March 18, 2020, President Trump signed into law House Resolution 6201, the Families First Coronavirus Response Act (the “Act”). The Act, which is applicable to employers with five hundred (500) or fewer employees, provides expanded paid and unpaid leave to employees in response to the ongoing COVID-19 pandemic.

Emergency Family and Medical Leave Expansion Act

Division C of the Act, subtitled the “Emergency Family and Medical Leave Expansion Act”, uses the existing Family and Medical Leave Act (FMLA) as a framework to provide eligible employees with the right to take up to twelve (12) weeks of job-protected leave. Eligible employees are those who have worked for the employer for at least thirty (30) calendar days and who are unable to work because they must care for their minor child due to the child’s school or care provider being closed or unavailable.

While the first ten (10) days of required leave may be unpaid, employers must provide up to ten (10) weeks of paid leave once the unpaid leave has been utilized by an employee. The required rate of pay is two-thirds (2/3) of the employee’s regular rate of pay, multiplied by the number of hours the employee would otherwise be scheduled to work, up to $200 per day or $10,000 in the aggregate.

Emergency Paid Sick Leave Act

Division E of the Act, subtitled the “Emergency Paid Sick Leave Act,” requires employers to provide up to eighty (80) hours of paid sick leave to eligible employees, regardless of how long the employee has been employed by the employer. Employees are eligible for paid sick leave under Division E if they are unable to work for any of the following reasons:

  • The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  • The employee is caring for an individual who is subject to an order to quarantine or isolate by a public order or self-quarantine as advised by a health care provider;
  • The employee is caring for the employee’s child if the school or place of care for such child has been closed, or if the child care provider of such child is unavailable due to COVID-19 precautions; or
  • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Employees exercising sick leave must be paid at their regular pay rate or at the federal, state or local minimum wage, whichever is greater, not to exceed $511 per day or $5,110 in the aggregate. Employees who take paid sick leave to care for another individual or child are entitled pay of two-thirds (2/3) their regular rate. In these circumstances, the paid sick leave rate may not exceed $200 per day or $2,000 in the aggregate.

Available Tax Credits for Employers 

To help offset the burden to employers, the Act provides a refundable payroll tax credit for one hundred percent (100%) of qualified emergency leave wages (as provided by Division C) and qualified paid sick leave wages (as provided by Division E) paid by an employer through the end of 2020. The allowable credit amount for any calendar quarter cannot exceed the total employer payroll tax obligations on all wages for all employees.  However, if the amount of the credit that would otherwise be allowed is so limited, the amount of the limitation is refundable to the employer.

If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.

Happy International Women’s Day!

Sunday, March 8, 2020 is International Women’s Day! This day, celebrated annually since 1911, honors working women worldwide. Most working women have a lot on their plate, and between their careers, their families, and all the other day-to-day goings-on, their estate plan is probably not at the top of their priority list. So, let’s take some time, in honor of International Women’s Day, to consider the unique challenges women face with regard to their estate plans.

Women in the United States live an average of 5 years longer than men. As a result, they are statistically likely to outlive their male spouses. Depending on each spouse’s level of involvement in the estate planning process, a new widow may or may not have a good understanding of how her estate plan works, and should consider having it reviewed to determine whether any updates are necessary.

Women are often caregivers not only for their children, but also for ageing parents (this has become so common that there’s a term for it: the “sandwich generation”). Women in this position should take the time to consider who will take over their responsibilities if they themselves become incapacitated. This may require ensuring that successor trustees, attorneys-in-fact for finances, health care agents, and/or guardians are named to take over those responsibilities.

Finally, women are often the peacekeepers in their families, and may wish to plan for and, hopefully, help soften the impact their passing will have on their spouse, children, and other family members. This could include leaving specific instructions regarding the disposition of tangible personal property (particularly items like family heirlooms), putting written procedures in place for managing the family cottage, and/or pre-planning their funeral and burial arrangements.

Planning for the future isn’t always easy, but doing so will help to ensure that your loved ones are provided for after you’re gone.

If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.

IRS Announces 2020 Estate and Gift Tax Exemption Amounts

On November 6, 2019, the IRS announced the final estate and gift tax exemption amounts for 2020, as adjusted for inflation.  The estate and gift tax exemption for 2020 will be $11.58 million per person, whereas the annual gift tax exclusion amount is unchanged at $15,000.  The adjusted estate tax exemption amount means that an individual will be able to shelter up to $11.58 million in assets from estate tax upon his or her death in 2020, and a married couple will be able to shelter up to $23.16 million in assets (assuming that portability is utilized).

Keep in mind, however, that the Tax Cuts and Jobs Act will sunset on December 31, 2025 without further legislation, at which point the increased exemption amounts will return to those in effect in 2017 ($5 million, as adjusted for inflation).  In addition, new legislation reducing the estate, gift tax, and GST exemption amounts could be in the works depending on the results of the 2020 election.  For examples of some previously introduced bills to this effect, see our two recent blog posts, Dueling Estate, Gift, and Generation Skipping Transfer Tax Senate Bills and Yet Another Estate, Gift, and Generation Skipping Transfer Tax Senate Bill.  The moral of this story, therefore, is that the historically high exemption amounts now in effect may not be here to stay.

If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.

Yet Another Estate, Gift, and Generation Skipping Transfer Tax Senate Bill

In an earlier post, “Dueling Estate, Gift, and Generation Skipping Transfer Tax Senate Bills,” we discussed two different Senate bills concerning the federal estate, gift, and generation skipping transfer (GST) tax rates and exemption amounts.  On June 25, 2019, Senator Chris Van Hollen (D-Md) introduced yet another bill, the “Strengthen Social Security by Taxing Dynastic Wealth Act.”  This bill would simultaneously reduce the federal estate, gift, and GST lifetime exemption amounts while increasing the applicable federal estate, gift, and GST tax rates.

The bill would reduce the lifetime exemption amounts to a basic estate tax and GST tax exemption of $3.5 million (the exemption amount in effect in 2009) and a gift tax exemption amount of $1 million.  Notably, this would appear to “de-unify” the gift tax exemption from the estate and GST tax exemption amounts.  In addition, the bill would increase the maximum estate tax rate from 40% to 45%.  Finally, the bill would divert estate tax revenue to the Social Security Trust Fund in an attempt to bolster the program’s depleted reserves.  The projected revenue generated by the bill would cover approximately one-fifth (1/5) of Social Security’s estimated long-term funding gap.

Like the previous two bills, this one is unlikely to become law.  However, the number of bills introduced in the last year should remind us that the applicable exemption and exclusion amounts are always subject to change, and that it’s important to periodically review your estate plan with the current exemption amount in mind.

If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.

Dueling Estate, Gift, and Generation Skipping Transfer Tax Senate Bills

Earlier this year, two very different bills relating to the federal estate, gift, and generation skipping transfer (GST) taxes were introduced in the United States Senate.

On January 17, 2019, Senator Tom Cotton (R-Ark.) introduced a bill that would reduce the federal estate, gift, and GST tax rates to a flat rate of 20%.  Under current law, these transfers are subject to a progressive tax rate that maxes out at 40% for transfers in excess of $1 million (subject to the federal lifetime exemption amount of $10 million, as adjusted for inflation).

Conversely, the “For the 99.8 Percent Act,” introduced by Senator Bernie Sanders (I-Vt.) on January 31, 2019, would reduce the federal estate, gift, and GST lifetime exemption amount to $3.5 million. The federal lifetime exemption amount is currently set at $10 million (adjusted for inflation to $11.4 million for 2019), and will decrease to $5 million when certain provisions of the Tax Cuts and Jobs Act of 2017 sunset on December 31, 2025.  In addition, the Act would raise the federal estate, gift, and GST tax rates to 45% for transfers of $3.5 million to $10 million, 50% for transfers of $10 million to $50 million, 55% on transfers of $50 million to $1 billion, and 77% on transfers in excess of $1 billion.

Although neither of these bills is likely to make it through both houses of Congress to become law, it is always worth keeping an eye on legislation that has the potential to impact your estate plan.

If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.