You might not spend a lot of time thinking about probate until a loved one passes away. Now the legal process becomes very real. Probate is used to settle a person’s estate, pay debts, and distribute assets after death.
While it serves an important purpose, many Wisconsin families want to avoid probate when possible. These legal proceedings can take time and add extra stress during an emotional period.
There are several ways to transfer assets outside of probate. With a little planning, you can make things much easier for the people you leave behind.
Consider a Revocable Living Trust
One of the most common ways to avoid probate is to establish a revocable living trust. This holds your assets during your lifetime and distributes them after you pass away.
In most cases, the person creating the trust serves as the trustee during their lifetime. They keep full control of their assets, allowing them to buy, sell, or manage property. However, the trust technically owns those assets.
When the trust creator passes away, a successor trustee will distribute the assets according to the instructions in the trust. Since the trust owns the property, those assets don’t have to go through probate.
Use Payable-on-Death and Transfer-on-Death Designations
Some probate-avoidance tools are built into many financial accounts. Banks and investment companies allow account holders to name a payable-on-death (POD) or transfer-on-death (TOD) beneficiary.
When the account owner passes away, the funds transfer directly to the named person with evidence of a death certificate. There is no court process required. These designations are available for:
- Bank accounts
- Investment accounts
- Certificates of deposit
In Wisconsin, there are also transfer-on-death deeds for real estate. With that, a homeowner can name a beneficiary to automatically receive the property when the owner passes away.
Joint Ownership Also Avoids Probate
Another estate planning strategy involves joint ownership of assets. When property is owned as joint tenancy with right of survivorship, that surviving owner automatically inherits the property when the other owner dies.
Married couples will designate their homes or bank accounts this way. In that case, if one spouse passes away, the surviving spouse automatically becomes the sole owner. Since ownership transfers instantly, probate is not required for those assets.
However, adding someone as a joint owner should always be done carefully. It can expose the property to the other person’s creditors or create tax complications if it’s not handled properly.
Don’t Forget About Beneficiary Designations
Some of the largest assets people own already bypass the probate process. Retirement accounts, such as IRAs and 401(k)s, allow account holders to name beneficiaries. With the person’s passing, they will receive the funds.
Life insurance policies work the same way. When the policyholder dies, the insurance company pays the benefit directly to the listed beneficiary.
Since these assets transfer by contract, they never become part of the probate estate. There is an important catch: beneficiary designations should be reviewed regularly. Marriage, divorce, or the birth of a child can make an outdated designation a problem when it no longer reflects your wishes.
Small Estates Have Other Options
Even if probate cannot be avoided, Wisconsin has options for smaller estates. If an estate falls below certain value thresholds, heirs may be able to use a small estate affidavit instead of going through full probate. This process can allow beneficiaries to claim property quickly and with fewer legal steps.
Yes, it does not avoid probate completely, but it can make the process much less complicated for family members.
Estate Planning Now Makes Things Easier Later
So, how to avoid probate in Wisconsin? You need to plan early. Unfortunately, estate planning gets pushed to the bottom of the to-do list. Most people assume there will always be time to deal with it at another time. But putting a plan in place now can make a huge difference for your family down the road.
At Collins Law Firm, we can help you find the best options to protect your legacy based on your personal goals, family dynamics, and the types of assets involved. A little planning today can spare your loved ones from probate in the future. If you would like to learn more, reach out today toschedule a consultation.