Many people choose to avoid probate by utilizing trust
administration. There are a number of legal strategies that will allow
you to pass property after death without going through probate.
Joint Tenancy, Survivorship Marital Property, and Tenancy by the Entirety
Adding another person to your assets as a joint owner, a joint tenant
with rights of survivorship, or a husband and wife as the “survivor”
with regard to marital property will allow your property to pass to that
person upon your death without going through probate. There are
pitfalls to these strategies, however. These strategies allow access to
creditors of co-owners to your assets because your property is in their
name as well.
Beneficiary Designations
Wisconsin law allows Transfer on Death (TOD) and Payable on Death
(POD) beneficiary designations to be added to real estate, bank
accounts, and other financial accounts. Beneficiary designations like
these are preferable to joint tenancy because they allow you to transfer
property only upon your death without giving away current ownership.
One of the drawbacks, however, is that it can be difficult to obtain an
equitable distribution of property among your heirs by utilizing
beneficiary designations. Additionally, if you have beneficiaries listed
on your assets, those assets will be distributed upon your death to the
listed beneficiaries, even if your last will and testament state
otherwise.
Revocable Living Trusts
A revocable living trust is a legal document that allows you to
establish a separate modifiable entity, the trust) to hold legal title
to your assets while you are alive, and to name trustees to manage those
assets according to the trust terms. Typically, as the trust creator,
you will serve as the trustee while you are alive, managing your assets
for your own benefit. Upon your disability or death, the trust terms
appoint your successor trustee who then continues to manage – or
distribute – the assets held in trust. A properly drafted trust can
accomplish many goals, including guardianship and probate avoidance for
your estate, as well as bloodline, marital and creditor protection for
your children.
The Advantages of Trusts
A trust-based estate plan offers many important advantages, including greater control over how and when your assets are distributed, increased privacy, and the ability to avoid the time and expense of probate when properly funded. Trusts can simplify estate tax planning, provide asset protection, and allow property located in multiple states to be managed through one comprehensive plan. They are especially beneficial for blended families, second marriages, and individuals with children from prior relationships because they allow for clear and customized distribution plans. Trusts also provide peace of mind, as they help ensure your wishes are carried out according to your intentions.
Deciding if a Trust Will Work for You
A properly drafted and funded trust will generally avoid probate and need not be filed with the probate court. Nonetheless, there are still steps necessary to administer the trust. Beneficiaries must be contacted, assets must be gathered, valued, and managed; potential creditors must be notified; debts, taxes, and final expenses must be paid; and, ultimately, any remaining income and assets must be distributed in compliance with the trust terms. Successor trustees often lack the time, resources, or knowledge to personally administer the trust, and therefore may call upon legal, accounting, and investment professionals for assistance. Oftentimes, a corporate fiduciary (e.g., a trust company) is an excellent alternative to relying solely on busy family members or friends to serve as trustees.
The loss of a loved one is a very difficult period. This is not the time most people are at their best. It is particularly challenging when you are asked to begin making financial and legal decisions. Our attorneys are sensitive to your concerns and are committed to helping your successor trustee(s) deal with the complexities of administering your trust. For a consultation with one of our estate planning attorneys or Trust Administration Lawyers at Doar, Drill & Skow, call 877-890-7934 toll-free or contact us online. Located in New Richmond, we serve clients throughout western Wisconsin.
