What is probate?
In Estate Planning, probate is the process by which, at your death, a personal representative collects your assets which are subject to probate, pays any outstanding expenses or allowable indebtedness, and distributes the remaining assets as you have designated in your will. If you do not have a will, the net remaining assets will be distributed as set forth in the Wisconsin Statutes.
What is the process?
If you have a will, the personal representative that you have designated in your will will file the appropriate paperwork with the probate court. Notice will be given to creditors to file claims. The notice will be published in a local newspaper. The personal representative may object to any claims which should not be paid and the probate court will decide if the objected claims should be paid.
From the time of appointment, the personal representative will begin collecting your assets and transferring specific assets that you have designated in your will or selling non-designated assets. The personal representative will file an inventory of all of your assets, file income tax returns for the last year that you were alive, and file any income tax returns for the probate estate. The personal representative may, depending upon the type of probate, complete an accounting of the assets and the payments made and then distribute the balance to the beneficiaries listed in your will.
If you have no will, duties of the personal representative are the same. The difference is that the distribution will be determined Wisconsin Statutes: first to your spouse, if any, then to your children or their children, then to your parents, siblings and continuing, following the bloodline.
Is everything I own subject to probate?
Probate property does not include assets for which you have listed beneficiaries or made payable upon your death. Examples would be life insurance policies, annuities, IRAs, 401ks, bank accounts, savings bonds payable on death, real estate transfers upon death, jointly held property or property held as marital survivorship property.
Is probate expensive?
A fee of $2.00 for each $1,000 of assets being probated is payable to the probate court. There may be some administrative costs such as real estate brokers or accountants. Retaining an attorney is not required. That is a decision of the personal representative, depending on the type of assets, the complexity and whether there will be any objections from any of the heirs as to who is included to receive or the amounts to be received from probate. If counsel is retained, obtain a clear understanding at the start as to what the cost will be.
What is a Will?
A Will is a written document signed by you and witnessed by two witnesses which states how you wish your property to be distributed upon your death, who should be responsible for the distribution, and provisions for any minor children or any other persons who would might be unable to manage their money. You may also provide for the selection of a guardian for any minor children. The assets which are distributed through the Will are known as probate property and do not include the properties in which you have designated a beneficiary, such as insurance policies, IRAs, other retirement funds, joint or survivorship marital property, payable on death accounts, or transfer on death real estate.
Do I need a Will?
The answer is, it depends on your situation. If you wish to choose who will be resolving your affairs after your death, you will need to have a will to designate that person. You should also have a will if you wish to designate who will be the guardians of any of your minor children or if you wish the monies to be managed for them past the age of 18 (unless you have a trust that makes those provisions). You should have a will if you wish to give any of your assets or monies to a person or organization outside of your spouse or someone within your bloodline.
If you do not have a will, the Wisconsin Statutes set the distribution of your assets after your death. First, to your spouse. If you do not have a spouse, then to your children, then to your grandchildren, then to your parents and following your bloodline.
What is a Durable Power of Attorney for Finances?
A Durable Power of Attorney for Finances is a document that enables another individual to handle your financial affairs. Most people choose their spouse, a trusted family member or a friend. It is called durable because it will be valid even though you may become incapacitated or unable to handle your finances.
What is a Power of Attorney for Health Care?
A Power of Attorney for Health Care is a document that enables another individual to make decisions concerning your medical treatment only if you are incapable of making those decisions. Your health care agent will make those decisions on your behalf. You may also give very specific instructions, such as not allowing chemotherapy. Your medical providers must follow the agent’s instructions as if you were personally giving the instructions. Your health care agent should be someone you trust and who is knowledgeable of your wishes.
What is a Living Will?
A Living Will, also known as a Declaration to Physicians, is a document that informs your health care providers of specific instructions if you are permanently unconscious or terminally ill. Those instructions must be followed by the health care providers.