Metro Estate Planning

Questions about probate & estate planning in Wisconsin? You have come to the right place.

Probate & Estate Planning in Wisconsin


Probate Overview:

What is probate?

Probate is a legal process in which the will of a deceased individual is “proven” and all property is distributed.

 

In the probate process, the court opens a case to ensure the executor, or personal representative, responsible for distributing the property and acting on behalf of the deceased, does their job thoroughly, and anyone who may want to contest the will is given the opportunity to do so. The probate court puts forth a notice to all who may want to come forward, which is published in the newspaper and, therefore, is available to anyone.

 

Prior to this, the executor of the will – a person appointed by the deceased or by the court if the deceased never named a person for this role – makes a full inventory of all property owned by the deceased party. This inventory is then filed with the court and becomes available to the public, when individuals are invited to come forward and contest the will.

 

All of the deceased’s debts are then paid out of their estate and the rest of the property is distributed based on the instructions outlined in the will. The executor is responsible for keeping careful record of everyone who received a piece of the estate and how much, the amount of value, if any, that came in or was paid out, until the estate is empty. At this point, they file these records with the probate court. Then, the executor is released from their duties by the court and the case is closed.

 

The process outlined above is known as “death probate.” This type is most common, but there are other types of probate as well. If you have questions about probate in Wisconsin, visit probate attorney Milwaukee Rob Fricker.

 

 

 

 

Formal probate

When a person dies and does not leave a will, the petitioner must request signed waivers and consents from any individual interested in the will. If they do not succeed in obtaining waivers from all, they need to undertake formal probate. Formal probate follows the same general outline as death probate, but with additional documentation and advance notice given in regards to the estate. The entire process is conducted under the supervision of a judge.

 

Informal probate/informal administration

If there are no objections or contestations to the execution of the will, it may be possible to follow informal probate. This simplified process often does not require going to court and, depending on the rules of the county, may be able to be done through the mail.

 

Special administration

As with anything in life, there are always exceptions to the rule. When a particular asset of the deceased’s estate cannot be handled within traditional death probate, such as accessing a safety deposit box that may contain the will or opening a frozen account, this will happen under a special administration case within the courts.

 

Transfer by affidavit or Summary assignment/settlement
If the total value of the estate is less than $50,000, the court may allow the executor to skip probate and follow a simplified process. This can also be used when debt owed is higher than the total value of the estate.

 

 

 


 

PROBATE Frequently Asked Questions

 

What is Probate?

Probate is a legal process in which the court oversees the execution of a Last Will and Testament. This allows the validity of the will to be proven and gives anyone an opportunity to contest the contents of the will. Additionally, the probate process ensures record-keeping of how all property was distributed or transferred, debts settled and taxes paid.

 

There are a number of types of probate and, depending on the size of the estate, the probate process may be avoided entirely. For help understanding probate, give an experienced attorney a call.

 

Who manages the probate process?

Probate is a legal process overseen by probate court. A Last Will and Testament names an executor, sometimes called a personal representative, who manages the distribution of the estate. This person, often someone whom the deceased knew and trusted, is responsible for working with the probate court to establish the validity of the will, distribute property according to the wishes of the deceased, settle debts, pay taxes, and report everything back to the court.

 

When naming an executor, it is critical to choose someone you feel is trustworthy, detail-oriented, patient, and capable of handling this significant responsibility.

 

What are the different types of probate?

Since no will or estate is the same, there are a number of variations on the death probate process that can be followed. Here are some of the more common examples:

 

Formal probate

When a person dies and does not leave a will, the petitioner must request signed waivers and consents from any individual interested in the will. If they do not succeed in obtaining waivers from all, they need to undertake formal probate. Formal probate follows the same general outline as death probate, but with additional documentation and advance notice given in regards to the estate. The entire process is conducted under the supervision of a judge.

 

Informal probate/informal administration

If there are no objections or contestations to the execution of the will, it may be possible to follow informal probate. This simplified process often does not require going to court and, depending on the rules of the county, may be able to be done through the mail.

 

Special administration

As with anything in life, there are always exceptions to the rule. When a particular asset of the deceased’s estate cannot be handled within traditional death probate, such as accessing a safety deposit box that may contain the will or opening a frozen account, this will happen under a special administration case with the courts.

 

Transfer by affidavit or Summary assignment/settlement
If the total value of the estate is less than $50,000, the court may allow the executor to skip probate and follow a simplified process. This can also be used when debt owed is higher than the total value of the estate.

 

 

I’ve been named an executor of a will. Do I need a lawyer to manage the probate process?

As the executor or personal representative of a will, you may find that you need the advice of an experienced attorney to help you through the probate process. You are welcome and encouraged to hire a lawyer to provide assistance of this kind, and it does not need to be the lawyer who originally helped draft the will.

 

Under Formal Probate, it is required that a lawyer represent the personal representative and estate in court and strongly advised that this professional attend all meetings and hearings. This person will help the representative understand the case and can provide specific legal advice.

 

What is not covered by probate?

In most circumstances, estates with a total value under $50,000 can bypass the probate process and complete a “transfer by affidavit” process instead – something that can usually be done by mail.

 

In larger estates, certain types of property are excluded from probate. Jointly-owned property transfers to the surviving owner, and retirement accounts pass automatically to a beneficiary, if one is named.

 

What costs are associated with probate?

There are a few costs associated with probate: court filing fees, attorney fees, bonds (if applicable), and a small fee and reimbursement of expenses for the executor. All costs are covered by the estate.

 

Court filing fees are determined by the value of the estate, while attorney fees are not based on the value. Rather, an attorney may charge per hour or a flat rate. Request an estimate from any attorney you consider hiring once they have an understanding of the estate.

 

Any cost to the executor, including travelling expenses, will be reimbursed out of the estate. There may also be a small fee paid to the executor for carrying out their duties. This may be written into the will, decided on by the beneficiaries, or predetermined as 2 percent of the value of the inventory of the estate. However, if the executor does not adequately perform their role, the court has the power to withhold this fee.

 

What are the tax ramifications of probate?

The State of Wisconsin has neither estate tax nor inheritance tax, no matter the value of the estate or property distributed to an individual. However, the estate is still beholden to any state or federal income tax on money it earns during the probate process.

 

What can I expect from the probate process?

The length of time you can expect the probate process to take varies widely, and depends on a number of factors. Size of estate, type of property contained therein, taxes, marital property concerns, creditors’ claims on the estate, and business ownership are just a few. Wisconsin State law allows a maximum of 18 months for probate, though a court may provide for an extension. However, if the probate process takes too long, this could be a reason for the court to replace the executor, attorney, or both.

 

During the probate process, it is still possible that beneficiaries may receive the property that was left to them. Once debts have been settled, taxes paid, and expenses covered, the executor has the power to begin distributing parts of the estate.

 

Every situation is different, so it is nearly impossible to accurately guess how long your case may take. However, an experienced attorneys can make probate as easy as possible for you and your loved ones .

 

Does every estate settlement require probate?

Not all estates require probate, though many do. For estates with a total value under $50,000, all that may be required is a Transfer by Affidavit process, which is much simpler than probate and can often be done via mail. Additionally, if the deceased established a revocable living trust and transferred their property therein, probate may be avoided.

 

Advance planning may help your loved ones and beneficiaries avoid probate, but it is complicated. Not all types of assets can avoid probate, so it is important to seek out experienced legal counsel when planning for your future.


 

Estate Planning Glossary of Terms

This glossary brought to you by estate planning attorney Wauwatosa, Paul Margerie.

A Trust
The surviving spouse’s portion of an A-B, or marital, trust.

A-B Trust
A joint trust created by a married couple naming the financial beneficiary as any person other than the other spouse. It allows both spouses to use their federal estate tax exemptions, saving in estate taxes.

Administration
The distribution of an estate during probate including the collecting and managing of assets. Also used to describe the same process for a trust after the grantor dies.

Administrator/Administratrix
The personal representative named by the court when there is no will or the will did not name an executor.

Alternate Beneficiary
Person or organization named to receive assets if the primary beneficiaries named in the Trust die before the grantor.

Ancillary Administration
An additional probate in another state, often occurring when real property is owned in another state and is not titled in the name of the trust.

Annual Exclusion
Allowable amount that can be transferred to another person each year without incurring a gift tax.

Assets
Anything of value that is owned, including real estate, vehicles, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.

Assignment
A short document transferring assets from one name to another.

B Trust
The deceased spouse’s portion of an A-B trust, also known as credit shelter or bypass trust.

Basis
The value that is used to determine gain or loss for income tax purposes, usually what was paid for the asset.

Beneficiaries
In a living trust, the person(s) and/or organizations who receive or benefit from the trust assets after the death of the trust grantor.

By-Pass Trust
Another name for the “B” part of an A-B living trust.

C Trust
Also known as QTIP, a trust that allows a spouse to give a life estate without incurring the federal gift tax.

Certificate of Trust
A version of a trust that verifies the trust’s existence, explains the powers given to the trustee, and identifies the successor trustee(s), but does not reveal any information about the trust assets, beneficiaries, or their inheritances.

Children’s Trust
A living trust established that allows property to be left to minor children, but managed by the named trustee until the child reaches the age specified in the trust.

Codicil
A modification or amendment to a Will.

Co-Grantors
Two or more persons who establish a living trust together, usually spouses.

Co-Trustees
Two or more individuals or corporations who have been named to act together equally in managing a trust’s assets.

Common Trust
One living trust established by two or more individuals, usually spouses.

Community Property
Assets a married couple acquires by joint effort during marriage, giving each spouse one-half ownership in the event of divorce or death. Nine states qualify as community property states.

Conservator
One who is appointed legally responsible for the care and well-being of another person due to physical/mental limitations or age. May also be called a guardian.

 

Conservatorship
When a judge appoints a conservator for a person who is unable to manage his/her own affairs due to mental or physical incapacity. May also be called a guardianship.

Contest
To dispute or challenge the terms of a will or trust due to belief that the trustor was incapacitated or influenced when signing the trust document.

Credit Shelter Trust
Another name for the B Trust in an A-B living trust, the deceased party’s portion.

 

Creditor
Person, institution or company to whom money is owed.

Custodian
Person named to make major decisions for a minor, including manage assets left to a minor under the Uniform Transfer to Minors Act. In most states, the minor receives the assets at legal age.

Deceased
Person who has died.

Deed
A document that conveys or transfers title of real estate to another person(s). Also see warranty deed and quitclaim deed.

Disclaim
To refuse to accept a gift or inheritance. It then goes to the next recipient in line, and is the same as never having owned it.

Discretion
The full or partial power to make a subjective judgement, given by the trust creator.

 

Disinherit
To prevent a person or persons from inheriting one’s property.

Distribution
Payment in cash or asset(s) to one who has been named to receive it.

Durable Power of Attorney for Asset Management
A legal document that gives another person legal authority to sign one’s name on his/her behalf in his/her absence. It is valid through incapacity until time of death. For instance if you own a concrete contractor Fishers business and were unable to function, you can appoint someone else to manage your business & assets.

 

Durable Power of Attorney for Health Care
A legal document that gives another person legal authority to make healthcare decisions in the event one is unable to make them for him/herself. Also known as a health care proxy or medical power of attorney.

Equity
The current market value of an asset, less any liability.

Estate
Combination of the assets and debts left by an individual at death.

Estate Taxes
Federal or state taxes on the value of assets at the time of death. Also known as inheritance taxes or death taxes.

Executor/Executrix
Person or institution named to carry out the terms of a will, sometimes called a personal representative.

Federal Estate Tax Exemption
Amount of an individual’s estate that is subtracted from an estates gross value to calculate taxes owed.

Fiduciary
Person having the legal duty to act primarily for another’s benefit, usually a trustee.

Funding
The transferring of assets to a living trust.

Gain
The difference between what was paid for an asset and what it was sold for. Used to determine the amount of capital gains tax due.

Gift
A transfer of assets from one individual to another without compensation in return.

Gift Tax
A federal tax on gifts made while living. Currently the exemption is $15,000/person/year. Also see “Annual Exclusion.”

Grantor
The person who creates the trust.  Also called creator, settlor, trustor, donor or trustmaker.

Gross Estate
The total value of an estate before any debts are paid.

Guardianship
See “Conservatorship.”

Health Care Proxy
See “Durable Power of Attorney for Health Care.”

Heir
One who is legally to receive part of an estate upon that person’s death.

Homestead Exemption
Portion of a residence that cannot be taxed while the remaining spouse is living.

Incapacitated/Incompetent
The inability to manage one’s own affairs, either temporarily or permanently, therefore rendering the person incapable of legal power.

Independent Administration
A form of probate available in many states intended to simplify the probate process by allowing an individual to take action without permission of the court.

Inheritance
The assets received from the deceased.

Irrevocable Trust
A trust that cannot be modified or revoked without the beneficiary’s permission. Opposite of revocable trust.

Intestate

A person who did not make a will before death.

Joint Ownership
Two or more persons owning an asset together. Types of joint ownership include joint tenants with right of survivorship, tenants in common, and tenants by the entirety.

Joint Tenants with Right of Survivorship
A form of joint ownership in which the share of the deceased’s owners asset(s) transfers to the surviving joint tenant(s) automatically.

Land Trust
A device for acquiring, holding, managing and selling real property. The title is transferred to a corporate trustee or corporation, but the owner maintains control of the land use. In all financial transactions and dealings, the personal name of the owner is not disclosed, allowing for privacy. Also called a title holding trust.

Liquid Assets
Cash and other assets, such as stocks, that can quickly be converted into cash with little or no loss in investment.

Living Probate
The court-supervised process of appointing a guardianship or conservatorship of one who is incapacitated.

Living Trust
A written legal document that creates an entity to which assets are transferred during life and includes instructions for management during life and after death or incapacitation. Avoids probate at death and court control of assets at incapacity. Also called a revocable inter vivos trust.

Living Will
A written document that states a person’s wishes regarding medical treatment should he/she become unable to express informed consent.


Marital Deduction
A provision in the United States Federal Estate and Gift Tax Law that lets a deceased spouse leave an unlimited amount of assets to the surviving spouse, free of estate taxes. However, if the surviving spouse’s estate is more than the amount of the federal estate tax exemption in effect at the time of his/her death, estate taxes will be due at that time.

 

Marital Trust
See “A Trust.”

Medicaid
A federally-funded health care program for low-income families and individuals.

Medicare
A federally-funded health care program for Americans over age 65, certain persons with disabilities, and persons with end-stage renal disease.

Minor
A person who is under the legal age for an adult; 18 in most states.

Net Estate
The value of an estate after all debts have been paid, upon which Federal estate taxes are based.

Net Value
The current market value of an asset minus any loan or debt.

Payable-on-Death Account
See “Totten Trust.”

Per Capita
A way of distributing an estate so that each generation splits an inheritance equally.

 

Per Stirpes
A way of distributing an estate so that the surviving descendants will receive only what their immediate ancestor would have received if he/she had been living at the time of the grantor’s death.

Personal Property
Movable property, including furniture, automobiles, equipment, cash and stocks.

Personal Representative
Another name for an executor or administrator.

Pour Over Will
A short will often used in conjunction with a living trust, stating that any assets left out of the living trust will become part of the living trust upon death.

Power of Attorney
A legal document giving another authority to act for another person in legal or financial matters. Ends at incapacity (unless it is a durable power of attorney) or death.

Probate
The legal process of establishing validity of a will.

Probate Estate
The assets that go through probate after death, usually including assets owned in the guarantor’s name and those paid to his/her estate. Usually does not include joint assets, payable-on-death accounts, insurance and other assets with beneficiary designations. Assets in a trust do not go through probate.

Probate Fees
Costs associated with an estate going through probate, including court, executor and appraisal fees. Probate fees are paid from assets in the estate before the assets are distributed to the heirs.

Qualified Terminable Interest Property (QTIP)
A trust that allows a spouse to give a life estate without incurring the federal gift tax. The surviving spouse can also keep control over who will receive these assets after the first spouse dies.

Quitclaim Deed
Legal instrument that allows title transfer to real property. With a quitclaim deed, the person transferring the title makes no guarantees, but transfers all his/her interest in the property.

Real Property
Property that is fixed, such as land or a building.

Recorded Deed
A deed that has been filed with the county land records, creating a public record of all changes in ownership of property.

Revocable Trust
A trust in which the grantor retains the power to alter or cancel the trust during his/her lifetime. Opposite of irrevocable trust.

Separate Property
Generally, all assets acquired or owned prior to marriage and assets acquired by gift or inheritance during marriage.

Separate Trust
A trust established by an individual. In contrast, see “Common Trust.”

Settle an Estate
The process of handling the final affairs after a death, including valuation of assets, payment of debts and taxes, distribution of assets to Beneficiaries

Settlor
See “Grantor.”

Special Gifts
A separate listing of specific assets that will go to individuals or organizations after incapacity or death. Also called special bequests.

Special Needs Trust
Provide for a disabled loved one without interfering with government benefits.

Spendthrift Clause
Protects assets in a trust from a beneficiary’s creditors before that asset is distributed.

 

Spouse
Husband or wife.

Surviving Spouse
The remaining living spouse after the other has died.

Survivor’s Trust
See “A Trust.”

Successor Trustee
Person or institution named in a trust who will take responsibility should the first trustee die, resign, or otherwise become unable to act.

Tax-Deferred Plan
A retirement savings plan that qualifies for special income tax treatment, such as an IRA, 401(k) or pension. The contributions made to the plan and subsequent appreciation of the assets are not taxed until they are withdrawn.

 

Taxable Gift
Gift(s) of more than $15,000 in one year to someone other than a spouse. The value of the taxable gift is applied to the federal gift tax exemption, and any additional gifts will be taxed, usually at the highest estate tax rate in effect.

Tenants-in-Common
A form of joint ownership in which two or more persons own the same real property. At the death of a tenant-in-common, his/her share transfers to his/her estate

Tenants-by-the Entirety
A form of joint ownership in some states between spouses. When one spouse dies, his/her share of the asset automatically transfers to the surviving spouse, not his/her estate.

Testamentary Trust
A trust in a will that goes into effect at the time of death and does not avoid probate.

 

Testate
One who dies leaving a valid will.

Title
Document proving ownership of an asset such as a home foundation repair.

Transfer Tax
A fee imposed on the transfer of assets to another. The estate tax, gift tax and generation skipping transfer tax are all transfer taxes.
Trust
An entity that holds assets for another party.

 

Trust Company
An institution that manages trusts. Also called a corporate trustee.

Trustee
Person, board or institution who has the power to manage and distribute another’s assets according to the instructions in the trust document.

Trustor
See “Grantor.”

Totten Trust
A bank account or security that will transfer to the beneficiary who was named when the account was established. “Transfer on death” (“TOD”), “in trust for” (“ITF”), “as trustee for” (“ATF”), and “pay on death” (“POD”) often appear in the title.

Unified Credit
The amount each person is allowed to deduct from federal estate taxes owed after death, integrating gift and estate taxes.

Uniform Transfer to Minors Act (UTMA)
Allows a minor to receive assets without appointing a custodian. In most states, the minor receives the assets at legal age.

Unfunded
A living trust that has no assets in it.

Warranty Deed
Document that allows transfer of real property with the guaranty that the title being transferred is free of any encumbrances. If the title is not clear, the person making the transfer is liable.

Will
A written legal document with instructions for distribution of assets after death that can only be enforced through the probate court.