Probate is a court-supervised process that oversees the transfer of assets from a deceased person to their heirs or beneficiaries. While probate ensures the proper distribution of an estate, it can also be time-consuming, costly, and invasive. An experienced Wisconsin estate planning and probate attorney can offer various legal solutions and strategies to help individuals avoid probate and ensure a smoother transfer of assets to their loved ones.
Why Avoid Probate?
Avoiding probate has several advantages:
- Time Savings: The probate process can take months or even years to resolve, delaying the distribution of assets.
- Cost Efficiency: Probate fees, including court costs, attorney fees, and executor fees, can significantly reduce the estate's value.
- Privacy: Probate records are public, which means anyone can access details about your assets and beneficiaries.
- Reduced Stress: Simplifying the process for your loved ones can reduce emotional and logistical burdens during a difficult time.
What Assets Go Through Probate in Wisconsin?
In Wisconsin, only assets that are solely owned by the deceased and do not have a designated beneficiary are subject to probate. These include:
- Solely owned real estate
- Bank accounts without payable-on-death (POD) or transfer-on-death (TOD) designations
- Personal property, such as vehicles or collectibles
- Investments or retirement accounts without named beneficiaries
Non-Probate Assets
Out of the deceased person’s assets, certain assets bypass probate by default, including those with designated beneficiaries or co-owners, such as:
- Life insurance proceeds
- Jointly owned property with rights of survivorship
- Retirement accounts with named beneficiaries
- Assets held in a trust
Strategies on How to Avoid Probate in Wisconsin
A knowledgeable Wisconsin estate planning lawyer may recommend the following strategies to avoid probate court proceedings:
Establish a Revocable Living Trust
This is one of the methods we recommend, as it’s reliable and succeeds where other methods fail. A revocable living trust is one of the most effective tools for avoiding probate. When you create a trust, you transfer ownership of your assets to the trust during your lifetime. You serve as the trustee and retain control of the assets, but upon your death, the successor trustee distributes the assets according to the trust terms, bypassing probate.
- Advantages:
- Avoids probate for all trust assets.
- Provides flexibility and control during your lifetime.
- Ensures privacy, as trust administration is not a public process.
- How to Set It Up:
- Work with an experienced estate planning attorney to draft the trust.
- Transfer ownership of assets, such as real estate, bank accounts, and investments, into the trust.
Joint Ownership with Rights of Survivorship
Assets owned jointly with another person, such as a spouse, can automatically pass to the surviving co-owner upon your death. Common examples include jointly owned real estate or joint bank accounts.
- Key Considerations:
- Joint ownership must include rights of survivorship.
- Adding someone as a joint owner gives them partial control over the asset during your lifetime.
Name Beneficiaries on Financial Accounts
Many financial accounts, such as retirement accounts, life insurance policies, and annuities, allow you to designate beneficiaries. These accounts are paid directly to the named beneficiaries without going through probate.
- How to Name Beneficiaries:
- Review and update beneficiary designations periodically to ensure they reflect your current wishes.
- Include contingent beneficiaries as a backup.
Gift Assets During Your Lifetime
By gifting assets to your heirs while you are still alive, you can reduce the size of your estate and avoid probate for those assets.
- Wisconsin Gift Tax Rules:
- Wisconsin does not impose a state gift tax, but federal gift tax rules apply.
- The federal gift tax exemption allows you to gift up to $17,000 per recipient annually (2023 limit) without incurring tax.
Use a Small Estate Affidavit for Estates Under $50,000
In Wisconsin, estates with a total value of less than $50,000 may qualify for a simplified process using a small estate affidavit. This avoids formal probate and allows heirs to claim assets by presenting the affidavit to the entity holding the asset.
- Steps to Use This Option:
- File the affidavit under Wisconsin Statutes Section 867.03.
- Ensure the total value of the estate meets the threshold.
A skilled attorney may utilize estate planning strategies such as designating survivorship marital property, holding savings and checking accounts in joint ownership, titling property jointly (joint property ownership), and using tools like trusts to transfer assets while avoiding probate efficiently.
Potential Pitfalls and Common Mistakes to Avoid
- Failing to Properly Fund a Trust: Creating a trust is only the first step. If assets are not retitled into the trust, they may still go through probate.
- Not Updating Beneficiary Designations: Life changes, such as divorce or the birth of a child, may require updating beneficiary designations to reflect your current wishes.
- Joint Ownership Complications: Adding a joint owner may have unintended consequences, such as exposing the asset to the co-owner's creditors.
- Ignoring Small Assets: Even small assets without proper designations or estate planning documents may trigger probate.
Role of Our Estate Planning Attorneys in Wisconsin
Personalized Estate Planning Solutions
At Krause Estate Planning & Elder Law Center, we understand that every family is unique. Our attorneys work closely with you to create customized estate plans that meet your specific goals, whether you want to protect assets for future generations, ensure smooth inheritance transfers, or avoid the legal process of probate.
Holistic Approach to Elder Law and Probate Avoidance
We take a comprehensive approach to estate planning, integrating elder law strategies to address long-term care needs and Medicaid planning. Our team is experienced in creating trusts and other tools to help you avoid probate and minimize complications for your loved ones.
Probate Services and Litigation
If probate becomes necessary, our attorneys guide you through the process with efficiency and care. Whether handling uncontested matters or representing clients in probate litigation, our probate attorney can provide diligent representation to resolve disputes and protect your family’s interests.
Choose Board-Certified Estate Planning Law Specialists in Wisconsin
At Krause Estate Planning & Elder Law Center, our attorney, Dan Krause, is one of only seven Board-Certified Estate Planning Law Specialists in Wisconsin, certified by the Estate Law Specialist Board, Inc. This prestigious credential highlights our legal capabilities and our commitment to ensuring your peace of mind. Call us today at 608-268-5751 / 414-285-1082 or contact us online to schedule your free consultation with our dedicated team.