Month: March 2018

What is an Estate Inventory?

Probate administration in Wisconsin requires the personal representative (executor) of an estate to complete several steps before winding up the final affairs of the deceased. One critical step is filing an inventory with the probate court. The estate inventory, as the name suggests, is a listing of all property owned by the probate estate.

Valuing Stocks and Other Assets

Chapter 858 of Wisconsin Statutes governs the filing of probate inventories. The personal representative normally has to file an inventory within a “reasonable time,” which is typically within six months of opening the estate, unless the probate court orders differently. The estate inventory itself must include:

  • A description of all property owned by the decedent;
  • The value of said property;
  • Whether any property is classified as “marital property”; and
  • Any “existing obligation” related to an item of property, e.g. a home mortgage or car loan.

It may be necessary for the personal representative to obtain an outside, independent appraisal for certain inventory items, such as a house or other real property. For many simpler assets, such as bank accounts or publicly traded stocks, the personal representative may value those assets without an appraisal simply by reviewing the applicable account statements. Note that when it comes to an inventory, all property is valued as of the day the person died, not the date the personal representative files the inventory.

This is especially important to remember when it comes to stocks. The common method for stock valuation is to take the average of the highest and lowest trading prices for the date of death. This information can easily be obtained from online sources such as Google Finance. To give a simple hypothetical example, say a person who died on March 12, 2018, owned 100 shares of Microsoft. That day the stock’s high and low trading values were $92.29 and $88.40, respectively. The inventory value of the stock would then be the average of these two prices–$90.35–times 100 shares, or $9,035.

Making Sure Your Personal Representative is Responsible

Preparing an accurate estate inventory is important for many reasons. Inventory values are used to determine the amount of the probate court’s fees. They also form the new cost-basis for probate assets passed onto the decedent’s heirs. This is why you need to ensure the individual named as personal representative in your will is responsible and capable of complying with the law. Filing a proper inventory is just one of many tasks your personal representative will have to complete, ideally with the assistance of a qualified probate attorney.

The estate lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.

Contact our office by calling (608) 268-5751 to schedule a consultation or use our online contact form.

I am Administering an Estate: Do I Need to Hire a Probate Attorney?

For many Wisconsin residents, administering a parent or relative’s estate may be their first extended interaction with the legal system. If you find yourself in the position of a first-time personal representative or executor, you may wonder if it is even necessary to hire an experienced probate and trust administration lawyer. After all, if your relative’s estate only has a few assets–maybe nothing more than a house and a checking account–you can surely handle everything on your own and spare the expense of a lawyer, right?

Can a QTIP Trust Help You and Your Spouse Save on Estate Taxes?

One reason many Wisconsin residents create a trust is to reduce their estate’s potential estate tax liability. For example, with a qualified terminable interest property (QTIP) trust, married couples can maximize the potential estate tax deduction for their combined property. Basically, the way a QTIP trust works is that the first spouse to die leaves a “life estate” in his or her property to the surviving spouse. This means the surviving spouse may continue to use and receive income from the deceased spouse’s property. The property itself remains in trust until the second spouse’s death, at which time the trust assets are distributed to a final beneficiary, such as the couple’s children.

Wisconsin Court Holds Father’s Will Did Not Create QTIP

Creating a QTIP trust is not necessarily difficult, but it is something that must be done carefully to ensure there is no confusion as to your intentions. If you did not clearly intend to create a trust, do not expect a judge to make one for you after you die just to help your estate save money on its estate tax bill. The law is not that generous.

Here is a recent case in point. Four adult children attempted to sue the law firm that handled their father’s estate more than 30 years ago for malpractice. The children maintained that their father had intended to create a QTIP trust and the attorneys failed to do so after his death, eventually leaving the children with an estate tax bill of over $260,000.

Using a Wisconsin Living Trust to Keep Family Members From Controlling Your Estate

A Living trust is a flexible estate planning device that you can amend, modify, or revoke at any point during your lifetime. Of course, once you pass away, the terms of the trust become irrevocable. In other words, your successor trustee is bound by its terms and must administer the trust assets as you direct.

This also means that your choice of a successor trustee is critical in ensuring the successful administration of the living trust. Many people create a living trust because they fear certain family members gaining control of their estate. Having a strong trustee in place, which in some scenarios may even mean appointing a non-relative or corporate trustee, can help ensure that the trust ultimately fulfills your wishes.

Do I Need to Go to Court to Get a Debt Repaid From a Family Member’s Estate?

Probate administration is the legal process of distributing a deceased Wisconsin resident’s property in accordance with the terms of his or her will, or if there is no will, under the state’s intestacy laws. Probate is also when anyone to whom the deceased owed money can present claims for payment. This includes health care providers, credit card companies, and even family members of the deceased.

Court Dismisses Son’s “Frivolous” Lawsuits Against Mother’s Estat

Under Wisconsin law, a creditor may demand “formal proceedings” in probate court to resolve any disputed claim against the estate. Probate court is the proper place to resolve such issues. In other words, a family member or other creditor should not initiate civil litigation outside of the probate administration process.

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