Trust is a critical part of estate planning, and we are not talking about revocable living trusts. We are talking about the fact that you need to entrust another person–i.e. the personal representative or executor of your estate–to manage your affairs after you die. Your choice of an executor is often more critical than deciding how to distribute your property. After all, if you select someone who is untrustworthy, there is no guarantee that your estate will be administered in accordance with your wishes.
Milwaukee-Area Lawyer Confesses to Misappropriating Estate Funds for Himself
Sadly, we still see too many probate scenarios in which an executor violates a decedent’s trust. For example, a Milwaukee-area attorney was recently sanctioned after the Office of Lawyer Regulation (OLR) charged him with abusing his position as personal representative of a former client’s estate. Specifically, the OLR said the attorney “wrote checks and made electronic fund transfers totaling over $25,000 to himself or his law office.” While the attorney eventually repaid the money to the estate, the OLR said he did not produce any financial records.
The attorney attempted to argue in court that “as a personal representative he was the owner of the money at issue and he couldn’t steal from himself,” according to a report in the Milwaukee Journal-Sentinel. That was a non-starter with the judge. According to the Journal-Sentinel, the judge said “such an interpretation would irrationally allow every personal representative to take estate assets before probate was complete.”
How Bonds Protect Estates
So, what happens when a personal representative improperly takes money from an estate, or is otherwise negligent in the performance of his or her duties? The main form of protection for the estate (and its heirs) under Wisconsin law is a probate bond, also known as an executor’s bond or a signature bond. Section 856.25 of the Wisconsin Statutes states that nobody shall act as a personal representative “until the person has given a bond,” which basically serves as an insurance policy against the executor’s potential misconduct.
Bond may be waived in certain cases. Many people include language in their wills expressly waiving the need for their personal representative to post bond. Wisconsin law, however, states that such waivers are not binding on the probate court. The court ultimately retains the discretion to order or waive bond as it deems appropriate.
Need Help from a Madison Estate Planning Lawyer?
Despite all this talk about bonds and personal representatives stealing estate funds, it is important to note that most Wisconsin estates are administered without serious incident. That does not undercut the importance of proper estate planning beforehand. Getting your affairs in order now is the best way to prevent the potential for problems down the road.
The estate lawyers of 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.
To attend a free estate planning workshop or to receive our client planner to assess your estate planning mindset, contact our office by calling (608) 292-5185 or use our online contact form.