Estate Planning, Wills, and Probate

Personalized Services for Individual Estate Planning

Taking care of estate planning can be a daunting task, which many people would rather put off to another day. Schmidt, Rupke, Tess-Mattner & Fox, S.C. does all we can to make the process simple and straightforward for you.

Do you have a new baby? Are you planning to travel? Do you have family members with special needs who will need care after you're gone? Do you have a non-traditional family? Have you remarried? Are you concerned about what will happen to your family business? Are you struggling with health issues? Are you going into military service?

These are just some of the many situations that prompt people to “get their affairs in order.” We will talk with you about your specific estate planning needs and concerns and will recommend the best estate planning approach based on the information shared. A well-organized estate plan can help you:

• Make provisions for elderly parents or special-needs children
• Leave a gift to church or charity
• Minimize estate taxes
• Simplify transferring assets
• Establish long-term control over family assets
• Preserve the family business

Depending upon your specific circumstances, we may recommend using a variety of estate planning tools, including a will, general durable power of attorney, health care power of attorney (also called a “living will” or “advance health care directive”) and various trusts.

We also assist with the following related areas:

• Probate of wills
• Estate administration
• Trust administration, including charitable and family trusts
• Intestate succession

For general information about wills, trusts, powers of attorney, and the probate process in Wisconsin, please continue reading below. Call today with any other questions and to make an appointment.

Wills and Estate Planning: Answering Your Legal Questions

While you’re living and healthy, you value being able to make your own decisions about your finances, property, health care, and raising your children. Should you die or become incapacitated, you hope others will handle these matters for you according to your wishes.

The only way to assure that will happen is through estate planning. This process involves weighing various personal and financial decisions and creating legal arrangements to carry out those decisions. This brochure looks at key estate-planning tools: wills, living trusts, powers of attorney, and living wills.

What is a will?

A will is a written document that allows you to designate:

• who will receive your estate (your property that does not pass by beneficiary designation or joint ownership arrangement; see more below) after you die
• who will raise your children if you die while they’re still minors, and your spouse is unavailable to care for them
• whether your beneficiaries receive their inheritance outright or in a trust
• who will serve as your representative – that is, the person who will pay your bills and taxes and distribute the rest of your estate to your beneficiaries

When should I write a will?

If you have accumulated some assets, and you care about who will receive those assets after you die, it’s time to write a will.

Anyone with minor children definitely should have a will. In it, you can name the person you want to raise your children should something happen to you and your spouse. Discuss this carefully with the prospective guardian, to be sure he or she is up to the job. Also, name an alternate guardian in your will as a backup.

On the other hand, if you’re a young adult, have no children, and own few possessions, you probably don’t need a will yet. The state would distribute your possessions to your parents. But if you’d rather leave your car to your girlfriend, or your prized Spider-Man comic book collection to a favorite nephew, then a simple will is a good idea.

What if I die without a will?

In this case, the court appoints a representative who distributes your entire estate to your surviving spouse or registered domestic partner – unless you have children from outside your current marriage. In that case, your spouse or registered domestic partner retains half the marital property and receives half your individual property, with the rest of your estate split equally among all your children, from this marriage and outside it.

If you have no spouse, registered domestic partner, or surviving children or descendants of children when you die, your estate goes to other surviving relatives. State law lists the order of inheritance as follows: parents, brothers and sisters, nieces and nephews, grandparents, and descendants of grandparents. The state school fund receives your assets if you leave no heirs closer than the descendants of your grandparents.

If you leave behind minor children and have named no guardian in a will, a court must choose a guardian. If a minor inherits money or property, the court will likely place it in a guardianship account. Ask yourself: Is that a decision you want someone to make for you?

Having a judge decide who will raise your children can be emotionally wrenching for other family members. Also, court-supervised guardianships entail extra costs. Avoid the upset and expense by naming a guardian in your will.

Finally, bear in mind that if you have no will, the court will appoint a representative to administer your estate. Having a will allows you to choose this person. Also, you can stipulate in your will that the representative (if a Wisconsin resident) need not post a surety bond, thus saving money for your estate.

What types of property pass to your beneficiaries outside of a will?

These include:

• Survivorship marital property – goes directly to a surviving spouse. An example would be a house that has both spouses’ names (and only their names) on the title
• Property that is jointly owned – goes to the surviving owner(s)
• Life insurance proceeds and funds in IRAs and other retirement plans – go directly to the beneficiaries you listed on the appropriate forms.
• Transfer on Death (TOD) and Payable on Death (POD) assets and accounts – go directly to the beneficiaries named on the account or deed

If all your property falls into the above categories, and you have no minor children, you might think you have no need for a will. You may be right. On the other hand, a will may still be wise.

For example, you and your spouse, the other joint tenant, or your beneficiary could die at the same time or that person could die before you. A will would enable you to name alternate beneficiaries. Also, you could save on estate taxes, thus leaving more to your beneficiaries, by using a will to set up a trust.

What makes a will legal?

To be valid, your will must be in writing, and you must date and sign it. At least two witnesses also must sign the will. They can do this after they watch you sign it. If they weren’t present then, you can state to them that the signature is yours, and then the witnesses can sign. The witnesses should not be beneficiaries named in the will or your heirs as designated by law.

Can I write my own will?

Yes, if you comply with all the above-mentioned requirements to make your will valid. But if in creating your will, you encounter any questions or complexities you don’t understand, it’s a good idea to see your attorney. Remember, this document must spell out all the conditions for transferring your assets. And, if you have minor children, it names their guardian.

A will is an important document. You’ll want to be sure it correctly expresses your wishes and that it’s legally enforceable. A lawyer can give you advice about not only your will but also other aspects of estate planning you might otherwise overlook. We’ll discuss some of those later.

How does someone change my will?

A person can attempt to prove in court that:

• you were under duress or undue influence when making your will;
• you were incompetent or unable to understand the results of your will when writing it; or
• your will does not meet the requirements that make it valid, as listed earlier.

How can I change my will?

You have two options. You can simply write a new will, which automatically replaces an older one. Or you can add a supplement, called a codicil, to your existing will. For a codicil to be valid, it must satisfy the same legal requirements as those mentioned for a will.

Where should I keep my will?

Place your will where it’s safe from theft, fire, or other damage. A safe-deposit box is one possibility, although it may be difficult for your representative to access your safe-deposit box after your death.

Be sure your representative knows where your will is. Some people also give a copy to their representative. You’d want to do this, for instance, if you include funeral preferences in your will. Usually, the reading of a will doesn’t happen until after a funeral. So you’d want your representative to have a copy on hand, to be able to carry out your funeral wishes.

Is a will written in another state legal in Wisconsin?

To be valid in Wisconsin, the will must comply with the laws of one of the following: Wisconsin, the place where you properly signed your will, or the place where you lived when you properly signed your will.

Be aware, however, that Wisconsin has a marital property law and a same-sex domestic partnership law. If your will is from a jurisdiction with no such laws, you should have an attorney review your will. That way you can assure it still achieves the results you intend.

What is a trust created by a will?

You can use your will to create a trust upon your death. The trust holds your property for another person’s benefit. For example, a trust may provide an income for your spouse, be used to minimize or eliminate estate taxes, or it can hold property for your minor children until they become adults.

You name a trustee to oversee the trust. The trustee can be either a trusted individual (a friend, relative, or professional advisor) or a financial institution (a bank, brokerage firm, or trust company). The trustee is responsible for protecting the assets, paying out income earned, and terminating the trust as your will instructs.

What is a living trust?

You can create a living trust to control your property while you are alive. The trustee then would control your property after you die. Under this arrangement, you sign documents to give your property to the trust. As long as you’re living, you are usually your own trustee and your property is treated the same for tax purposes as if you still own it.

An advantage of a living trust is that property can pass to heirs after you die without going through probate. A drawback is that buying, handling, or selling assets held in a living trust may be more cumbersome while you’re alive. Ask your attorney how a living trust would affect your property.

For more information, see the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Revocable Living Trusts.

If I have a living trust, do I still need a will?

Yes. A will would be important for several reasons. You may have property that never got transferred to your trust while you were alive. You would need a will to transfer that property to your trust after your death. Or your estate might receive money after your death. For instance, if your death was the result of an accident, your estate may receive wrongful death benefits. Again, you would need a will to transfer this money to the trust.

You also need a will to name a representative and a guardian for your minor children. That’s not part of setting up a living trust. A representative can take certain actions on behalf of your estate that a trustee cannot, such as pursuing a wrongful death claim.

What is a durable power of attorney?

This authorizes another person, called an agent, to act for you in financial matters. The agent’s rights to act on your behalf depend on what you say in your durable power of attorney document. These rights might include the authority to sign legal documents, pay bills, buy and sell real estate, and take other actions on your behalf. Choose a person you trust absolutely.

A durable power of attorney can take effect in one of two ways. If you wish, it can take effect immediately. Your power of attorney may provide that it becomes effective at a later date or if you become incapacitated. A doctor, a judge, or some other person may be named to determine whether you are incapacitated. The latter is called a “springing” power of attorney.

A durable power of attorney ends at your death. Your agent retains no further authority to handle your finances. If you want your agent to settle your financial affairs after you die, you need to name that person as your representative in your will.

What is a durable power of attorney for health care?

This authorizes another person to make health care decisions for you when you’re unable to make them yourself. Not even your spouse or domestic partner can make health care decisions for you without written authorization. This is a heavy responsibility for anyone to assume. Be sure you discuss your health care preferences with your agent, so he or she knows what you’d want. This makes the agent’s job much less difficult during what may already be a stressful time.

To create a durable power of attorney for health care, you can use the standard state form. Or, an attorney can create an individualized document for you. Either way, a durable power of attorney must meet specific requirements for it to be valid.

Can I have the same agent for both finances and health care?

Yes, one person can serve as both. If you feel you need to name two different agents, be sure they can work together. This would avoid a situation, for instance, in which your agent for finances could interfere with health care decisions by refusing to pay certain medical bills.

What is a living will?

A living will is a separate legal document, not a part of your will. It is not the same as a durable power of attorney for health care. The latter allows your agent to make health care decisions for you. A living will, on the other hand, allows you to state in writing your preferences about life-prolonging medical treatment.

In a living will, you can declare that you wish medical professionals to withhold or withdraw life-sustaining procedures or non-orally ingested food and water – if you are in a terminal condition, you’re near death, or you’re in a persistent vegetative state.

Your living will takes effect only when you cannot speak for yourself, and there’s no hope for your recovery.

Your durable power of attorney agent also can make these sorts of end-of-life health care decisions for you, if you grant that power. If you have both a living will and durable power of attorney for health care, the latter rules if there is any conflict between the two.

The current law regarding living wills went into effect on Nov. 25, 1991. If your living will was written before then, you should have your attorney review it to be sure it still expresses your wishes.

For more information on a durable power of attorney for health care and living wills, see the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Health Care.

This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.

Probate: Answering Your Legal Questions

Many people assume probate is a time-consuming, expensive process. While it does entail costs and take time, probate may be less cumbersome than you fear. This brochure presents basic information about what probate does and how it works – and when it is unnecessary.

What is probate?

Probate is a court-supervised procedure for transferring ownership of someone’s assets after he or she dies. This process validates the person’s will and distributes property as the will directs. If the decedent left no will or other legal arrangement for transferring assets upon death, the estate may still go through probate.

The goal of probate is to protect the rights of heirs or other beneficiaries and others who have an interest in an estate. Probate determines what the estate owes in taxes and to creditors.

Who oversees the probate process?

The will names a representative who is responsible for overseeing the probate of an estate. A representative (called an executor in many states) may be a family member, friend, business associate, financial institution, or trust company. If the will designates no representative, the court appoints one. The representative’s main duties are to:

• Identify and collect the decedent’s assets
• Manage those assets during the probate process
• Determine the surviving spouse’s rights under the state marital property law
• Pay debts, claims, taxes, and probate administrative expenses
• Make any distributions to the surviving spouse or dependent children required under state law
• Distribute the remaining assets to those named in the will (or if there is no will, to the heirs at law)

What's the difference between formal and informal administration?

A probate judge presides in formal administration, while the county’s register in probate supervises informal administration. Generally, you must use formal administration if the will has contested issues. Only a probate judge can rule on such disputes. If contested issues arise during informal proceedings, the matter would have to be switched to formal administration.

Informal administration costs less than formal, and, in many cases, you can handle all or most of the process through the mail. Milwaukee County, however, does require the representative to appear in person at the initial hearing.

Should I hire an attorney to handle probate?

The representative may wish to turn to a lawyer for professional legal advice related to the probate process. The representative is free to hire any attorney of choice; this need not be the lawyer who drafted the will.

For formal probate proceedings, a lawyer must represent the estate’s representative. And, though not required, it’s advisable for the attorney to attend informal administration hearings, if there are any. The register of probate’s staff can answer basic questions about procedures and preparing forms. But, unlike an attorney, they can’t evaluate your case and provide legal advice.

Which assets can bypass probate?

Probate is unnecessary if the property solely owned by the decedent totals less than $50,000 in value. Then all that’s required to transfer property is completing a “transfer by affidavit” form.

Also exempt from probate is property titled in joint ownership, which automatically passes to the surviving owner. In addition, life insurance payments and funds in an IRA, pension, 401(k), or other retirement plan bypass probate – if the decedent has named beneficiaries other than the estate. Those beneficiaries would receive the funds directly. But if the decedent named no beneficiaries, or named the estate as the beneficiary, these assets would go through probate.

Other assets may be exempt from probate, as well, if the decedent has done the necessary estate planning before death. More on this later.

How much does probate cost?

The major probate expenses include court costs, costs of putting up a probate bond if the bond is not waived by the will, and fees paid to the representative and the attorney. The funds to pay these expenses come out of the estate.

The value of the estate’s assets will determine the court filing fees. Attorney fees vary depending on the complexity of the estate. Also, fees vary from one attorney to another, depending on experience and other factors. Billing methods also differ. Some lawyers charge by the hour; others charge a fixed fee. But by law, the attorney cannot base charges for probate services on a percentage of the estate’s value.

Once an attorney has basic information about the estate, he or she should be able to give you a rough estimate of the total fees. Be sure you understand the fee arrangement before retaining the attorney.

The representative has a right to reimbursement for expenses incurred in managing and settling the estate and for time spent carrying out those duties. Payment for the latter may equal 2 percent of the inventory value of the estate assets (less any mortgages or liens) or be some other amount the decedent specified, the beneficiaries agreed upon or the court approved. If the representative is derelict in carrying out duties, the court may reduce or deny compensation. The court also must approve expenses and attorney fees in formal probate proceedings.

How long does probate take?

Probate can take two years, even longer, for a large or contested estate. But the process may last up to six months even for a small, uncomplicated estate. Why does it take so long?

One reason is the time allowed for creditors to file claims against the estate. Usually, it takes a few weeks to notify creditors after death. Once that’s occurred, creditors have three months to file claims against the estate. Also, the representative must file any outstanding income tax returns for the decedent as well as income tax returns for any income earned by the estate after the decedent’s death.

If the estate is large enough, the representative may also need to file estate tax returns (due nine months after the date of death). The representative must then wait to receive tax closing letters from the Department of Revenue and Internal Revenue Service to close the probate.

Thus, the time needed for probate depends on such factors as estate size, type of assets owned, form of ownership, tax issues, the complexity of creditors’ claims, marital property issues, and whether a business is involved. State law requires that an estate be closed within 18 months. However, several counties adopted a benchmark for completing probate within 12 months. For either period, a court may grant a Petition for Extension. If the process goes beyond the allowed time, the court can replace the representative or the attorney for the estate, or both.

Even while the estate is still in probate, however, beneficiaries may be able to receive part of their inheritance. Once the creditors’ claim period has passed, the representative should make sure the estate has enough funds set aside to cover all expenses and taxes. Then out of the remaining funds, the representative could make a partial distribution to beneficiaries before the probate is complete.

Can I avoid probate?

As noted earlier, some estates and types of assets are not subject to probate. Certain types of estate planning also can make probate unnecessary. For example, you can put your assets into joint ownership or a revocable living trust (see the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Revocable Living Trusts).

Still, even with this kind of advance planning, probate may be necessary for some assets. This could occur, for instance, if an owner overlooked certain assets when transferring property to a revocable living trust. Or additional assets, such as a personal injury settlement, could be payable to the estate after the owner’s death and thus not be included in the trust.

And, creating a living trust doesn’t eliminate the need to pay taxes. The trust will owe federal and state income taxes on income the trust earns, and also federal and state estate taxes if the estate is large enough.

Is it smart to plan so that your heirs and other beneficiaries can avoid probate?

The answer depends on many factors. Your attorney can help you sort out your options.

This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.