A little more than a quarter-century ago, the state Legislature passed the Wisconsin Marital Property Act (MPA). This statute, along with the state’s law regarding trust funding, provides a significant degree of flexibility to certain Wisconsin residents when it comes to estate planning.
For many Wisconsinites, avoiding probate is a substantial estate planning goal. In some states, a married couple’s options for probate avoidance might require substantial advance trust planning, along with the constant obligation to ensure that all property is transferred into the couple’s trust. If you fail to do so, those assets not transferred likely become subject to probate.
Wisconsin residents enjoy an additional legal safety net, however. The MPA allows married couples (or, in the case of same-sex couples, registered domestic partners) to create what’s called a Marital Property Agreement. Under this agreement, couples can spell out which assets are individual property and which ones are marital property.
This agreement also permits couples to agree that, upon the occasion of the death of either spouse, either or both spouses’ assets may be transferred without probate. By creating such an agreement, couples can ensure that their assets avoid probate. A unique component of the MPA is that it allows couples to construct their agreements such that their assets transfer to their living trust upon death. Only in Wisconsin can residents fund their living trusts after death without undergoing a probate procedure.
Using a marital property agreement to transfer assets to a living trust at death has both advantages and disadvantages. As a positive, it creates an additional safety net to protect against assets which, whether forgotten or acquired late in life, get left out of the living trust funding process and would otherwise require probate to distribute. It also, in many situations, can provide substantial tax savings.
On the other hand, however, waiting until death to complete this asset-transfer process diminishes some of the other potential advantages of your living trust. Should you become incapacitated, a fully funded living trust, in combination with a health care power of attorney, often defeats the need for a court-appointed guardian, and the legal process of guardianship that goes with that. An estate plan in which your assets are not yet transferred to your living trust would lack this potential benefit.
The law in Wisconsin contains many options for achieving your estate planning goals, including avoiding probate. To learn more about each option, and which one makes the most sense in your situation, consult Madison trust attorney Daniel J. Krause of Krause Law Offices LLC. Krause Law Offices LLC offers our clients the knowledge, experience and dedication to personalized attention, plus individualized planning to ensure you get the best plan possible. Contact Attorney Daniel J. Krause to find out more today.