Probate Avoidance – Brookfield, WI.

Serving Waukesha, Elm Grove, New Berlin, Wauwatosa, Pewaukee, & all of Lake Country.

In Wisconsin, if assets valued at $50,000 or more are transferred through a Will, a Probate is mandatory. Probate is a judicial process where the court supervises the administration of a Will, essentially supervising the transfer of a deceased person’s assets to their heirs and beneficiaries. Avoiding the probate process has become an increasingly popular estate planning goal. Unfortunately, the only way to avoid probate is to plan ahead. At Carroll Estate Planning, we will analyze your situation and help you develop a comprehensive estate plan utilizing the most efficient and effective probate avoidance tools based upon your unique needs.

4 Reasons to Avoid Probate

  1. Probate is an Emotional Burden Losing a loved one, especially if the death is unexpected, is a very difficult and emotional experience. Having to jump through the court created hoops of the probate process can complicate the grieving process and rekindle or give rise to family conflicts while family members are trying to process their emotions and come to terms with the loss of a loved one.
  2. Probate is a Financial Burden In Wisconsin, the probate court charges a filing fee based on the value of the estate, requires the estate to incur the expense of publishing notice to creditors in the newspaper and may require the personal representative to get a bond. Even using the informal probate process, the court process is extremely difficult to navigate without the assistance of an attorney. The attorney’s fees and court costs likely to be incurred in the probate process usually exceed the costs of developing an estate plan designed to avoid probate all together.
  3. Probate is Public Because probate is a court process, probate files are public court records. This means that financial information such as assets and debts become public record in a probate proceeding. Further, the names of beneficiaries and the amounts they receive also become public record. Many people prefer to keep the details of their lives and personal finances private. Avoiding probate accomplishes that goal.
  4. Probate is Lengthy and Time Consuming Probate is a court process that typically takes 6 to 18 months to complete and even longer in more complex estates. The probate process requires a lot of work by Personal Representative

(Executor). The Personal Representative is responsible for gathering, preserving and liquidating the assets of the estate, keeping detailed records, signing documents, meeting with the probate attorney and attending court hearings.

Methods of Probate Avoidance

Revocable Living Trusts

A properly drafted and funded revocable living trust instrument avoids probate for any asset held by the trust. The first step is creating the trust instrument, in which you are the initial trustee and name a successor trustee to manage the trust assets after your death. The trust instrument will also provide direction to your trustee about how, when and to whom your assets are distributed. The next step is to transfer title to your assets to your trust. You can put virtually anything in a trust including but not limited to real estate, investments, bank accounts, insurance proceeds and vehicles. After your death, the trustee will follow your instructions for the transfer of your assets to your beneficiaries privately and relatively informally without a probate.

Direct Transfers on Death

If you are not using a trust to avoid probate, probate avoidance can be achieved by the direct transfer of assets upon death. Only assets that are transferred through a Will or the intestacy laws in the absence of a Will are subject to probate. Accordingly, in order to avoid probate without a trust, you will need to ensure that as many of your assets as possible transfer to your named beneficiaries outside of your will so that the assets that do transfer through your Will total less than $50,000 in value. Direct transfers on death are cost effective ways to avoid probate in less complex situations and when the beneficiaries are not minor children.

Death Beneficiary Designations

Life insurance policies, retirement accounts, investment accounts, bonds, stocks, IRA’s and other similar instruments allow you to designate beneficiaries of those instruments upon your death. The named beneficiary will become the owner of the account upon your death. Most institutions allow you to name more than one primary beneficiary and even allow you to name contingent beneficiaries.

Payable-on-Death (POD) Designations for Bank Accounts

Most banking institutions tend to use a different term to describe a direct transfer of an account upon the death of an account holder. The term most banks use is Payable-on-Death or (POD) and the reasoning is that the account ownership does not transfer upon the death of the account holder, but rather, the funds held within those accounts become payable to other people or charities. POD designations are typically available for all types of bank accounts including checking, savings, certificates of deposit and money market accounts. For these accounts, the owner will remain in control of the funds and after their death, the funds will be transferred to the person(s) who have been named as the beneficiaries. In most cases, a person can claim the funds in a POD account by providing proof of their own identity and a copy of the owner's death certificate. It is very important to note the distinction between a POD bank account and joint account. Adding another person to your bank account is very different than making the account payable to them upon your death.

Transfer-on-Death Deeds for Real Estate

The ability to transfer title to assets is not limited to investment accounts, retirement accounts and bank accounts. In Wisconsin, owners of real estate can execute and record a Transfer on Death Designation (TOD-110) for their home, lake house or other real estate naming the person or persons you want to take title to the property upon your death. You remain the owner of the property during your lifetime and retain the power to revoke or change the designation and even sell the property. After your death, the person or persons named on the Transfer on Death Designation need only record a Termination of Decedent’s Interest (HT-110) to take title to and ownership of the property.

While non-probate transfers, like payable on death and transfer on death accounts can be effective, they can also create problems and should be reviewed as part of a comprehensive estate plan. If you have any questions about how best to use payable on death or transfer on death accounts, other non-probate transfers, trusts, or other tools to ensure that your and your family's financial needs are aligned, then contact the Carroll Estate Planning LLC. We provide a complete range of probate and estate planning legal services.

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