Month: April 2012

The Probate Process in Wisconsin

In Wisconsin and other states, probate is the legal procedure through which a person’s assets are transferred after their death. The process is supervised by a court of law and designed to protect anyone with a legal interest in the deceased person’s estate. Probate is used to distribute a decedent’s assets not only to beneficiaries, but also to creditors and taxing authorities.

Any Wisconsin estate that exceeds $50,000 in value must go through the probate process unless the property is subject to certain exemptions. Some exemptions include assets that are titled jointly with another individual, life insurance proceeds, and any retirement funds where a beneficiary other than the deceased person’s estate was chosen. Additionally, assets placed in a revocable living trust are not subject to the probate process.

The probate process is usually handled by a personal representative (also called an executor) selected in advance by the decedent. If no personal representative was chosen, the court will generally appoint a relative, financial institution, or trust company to fulfill the role. In Wisconsin, a personal representative will normally identify all of the assets of the person who died, manage those assets throughout the probate process, pay any outstanding debts, taxes or estate expenses, make any distributions that are required by state law, and distribute any remaining assets to the decedent’s heirs or designees.

In Wisconsin, the probate process may be either formal or informal. If the way in which an estate will be distributed is contested, a formal probate process must be used. If an estate goes through formal probate, the decedent’s personal representative must be represented by an attorney. When an estate is probated in an informal manner, however, it is also a good idea for a personal representative to consult with a Wisconsin estate planning lawyer. It is also advisable to have an attorney attend any informal probate hearings.

Generally, any probate costs are paid for by the estate. Costs must also be approved by a court if the assets are distributed through a formal probate process. State and federal income taxes and any required estate taxes will also be paid from a decedent’s estate. In 2019, up to $11.4 million in assets are exempt from the federal estate tax. That number is scheduled to be reduced back to about $6 million in 2026. Currently, the State of Wisconsin does not collect an estate tax. Additionally, assets passing to a surviving spouse will normally be exempt from estate tax.

Although Wisconsin law requires that probate be completed within 18 months, a court may choose to grant an extension. On average, probate in Wisconsin takes no less than six months. The probate process must allow time for creditors to be notified, file required income tax returns, and resolve any disputes. Creditors must file any claims against the estate within four months of notification. Once the four-month period has passed, creditors are prohibited from making claims against the estate.

Funeral costs have priority in settling a probate case. Then come taxing authorities, secured creditors and unsecured creditors who have made a claim. Finally, the beneficiaries get to have what is left. Careful advance planning including use of living trusts may reduce or eliminate the need for your loved ones to wait for the probate process to conclude. For more information on the probate process or creating a living trust, contact our experienced Wisconsin probate and trust administration lawyers.

Celebrities Highlight the Need to Prepare Your Wisconsin Estate Planning Documents

Estate planning is an important topic for everyone. Accidents and serious medical conditions can arise suddenly and it is important to be prepared. The need for effective end-of-life planning impacts everyone, even the rich and famous. Take for example Stieg Larsson, author of the highly successful Girl With the Dragon Tattoo trilogy. Hollywood’s recent movie adaptation of the novel grossed more than $140 million. Unfortunately, Larsson died suddenly at age 50 from an unexpected heart attack. The author never prepared a living trust or will. Consequently, a lengthy legal battle over his $40 million estate ensued between his girlfriend of 32 years, with whom he shared a residence, and his family. Larsson’s estate was eventually awarded to his relatives.

Years later, Larsson’s family is still engaged in a court battle with his girlfriend over an unpublished novel that is allegedly in her possession. Larsson could have avoided the legal battle between his loved ones simply by preparing a living trust or will that clearly expressed how he wanted to divide his assets. By creating your Wisconsin living trust or will, you decide who receives your property and other assets upon your death. If you fail to provide for your loved ones in a trust or will, Wisconsin courts will distribute your estate according to Wisconsin intestacy laws, which may exclude certain people you would have wanted to include.

It is also crucial to create a health care power of attorney and a financial power of attorney well before any medical issues arise. If you are unexpectedly incapacitated, a health care power of attorney allows the individual you select to make any necessary medical decisions for you without heading to court. Making end-of-life medical and financial decisions can be tough on family members and often results in fighting. For example, although the late Etta James prepared a financial power of attorney that designated one of her sons as her decision-maker in 2008, her husband of 42 years challenged the document and claimed it was created after she became incompetent from dementia. Eventually, her husband and her sons reached an agreement regarding James’ care, but this does not always occur. You can protect yourself and your loved ones from legal battles by appointing medical and financial decision-makers well ahead of unexpected medical situations.

Keeping your living trust and your will and other legal documents updated is also crucial. Many people fail to update their documents after major life events such as a move to a new state, the birth of a child, or a divorce. It is a good idea to review your documents regularly. For example, when author Michael Crichton died at the age of 66, his wife was six months pregnant. His will not only failed to provide for the child but also specifically excluded additional children. Unfortunately, his wife and his adult daughter from a previous marriage wound up in a court battle. Although the baby was eventually allowed to inherit from his estate, Crichton could have avoided the court battle simply by keeping his will and other estate planning documents updated.

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