By: Attorney Gina C. Ziegelbauer
When people think of estate planning, they often think of a Will. Although a Will is an important part of an estate plan, a Will might not do what you think.
Most importantly, a Will does not avoid probate for titled assets. Your Will is actually the document that will tell the court how you want your estate handled if your estate does go through probate. Your Will contains the instructions to your personal representative (the person handling your estate) and to the court if your estate does go through probate. So the next question is: What is probate? Probate is the legal process for the transfer of a decedent’s property that doesn’t otherwise transfer.
In thinking about estate planning and whether you can or should develop a plan to avoid probate, you should think about the assets you have and the way each asset will transfer after your death. Most assets can transfer outside of probate if you plan properly.
-Jointly held assets will transfer to the joint owner, regardless of what your will says. Jointly held bank accounts or real estate are common examples of joint assets.
-Assets with a beneficiary designation will transfer to the listed beneficiaries outside of probate. Life insurance, investment accounts, retirement accounts, bank accounts, or even real estate (through a transfer on death deed) are examples of assets that may have direct beneficiaries listed so that the proceeds are paid directly to the listed beneficiaries without court involvement.
-Assets funded into a Trust will be distributed by the Trustee outside of probate and, assuming there are no issues or arguments among the trust beneficiaries, without court involvement.
Any asset that doesn’t transfer outside probate may require court involvement through probate to transfer the asset out of your name and to the person or people you want to receive it. There are a number of ways this can be done, but if the total value of the assets subject to probate is cumulatively over $50,000.00, then some type of probate proceeding will be needed to transfer the asset(s). That’s where the court gets involved and the Will comes into play.
While in some situations probate is an acceptable choice or cannot be avoided, most people I come across prefer to avoid it. Even though in Wisconsin probate isn’t as bad of a process as in some other states, in general, probate is more costly and takes longer to complete than other methods of transferring assets post-death. Of course, every situation is different and sometimes probate is actually preferable depending on family dynamics, for example. Probate may be unavoidable, like in a situation where there is a minor child with no living parent or legal guardian.
The point is that you should understand what your Will does and doesn’t do for you. The estate planning attorneys at Steimle Birschbach, LLC will walk you through that process and work with you to develop a plan that suits your individual situation efficiently and with as few surprises for your family as possible.