Losing a loved one is never easy. However, dealing with the financial and legal aspects that follow can make the grieving process even more stressful. During this process, certain questions, including how long does it take to distribute assets from a trust in Wisconsin?
Unfortunately, there is no set answer. The timeline will depend on a variety of factors, including the simplicity of the trust and challenges from beneficiaries. If you’re wondering what to expect, here’s a breakdown of how the process works.
The General Timeline to Distribute Assets
There are several scenarios that dictate how long a trustee has to distribute assets. This can include:
Quick Distributions
In some cases, distributions can happen quickly. Many times, this is within three to six months. However, the estate must be easy to settle. This can apply to trusts with cash or easily transferable assets. Along with that, the trust must also not have outstanding debts or disputes among beneficiaries.
If everything is set, some beneficiaries may receive their inheritance within a few months of the grantor’s passing.
Typical Trust Settlement
For most trusts, the process takes a year or two. Wisconsin law does require that probate be settled within 18 months. During this time, the trustee has to take an inventory of assets. This can take time, especially if it holds real estate, investments, or business interests. Plus, there is an issue of paying off taxes and debts.
When there are larger trusts, complications or disputes are always possible. They need to be settled before any distributions can proceed.
Longer Delays
Unfortunately, some trusts take even longer to settle. There are many reasons for that. Sometimes, the trust has complex assets that need to be divided or sold. Paying off estate taxes can also hold up the process. Once again, beneficiary disputes must be addressed before distribution.
What Happens If a Trustee Takes Too Long?
As trustees, these individuals are legally required to act in good faith and in a timely manner. Beneficiaries have the right to take action if they take an unreasonable amount of time for distributions. This can include:
- Being removed as trustee: In these cases, the court can appoint a new trustee.
- Legal action: Beneficiaries can file a lawsuit to force distributions.
- Financial penalties: If a trustee mismanages assets or causes economic losses, they could be held personally liable.
If you’re a beneficiary and believe a trustee is deliberately delaying distributions, you may want to consult with an estate lawyer to see your options.
Can Assets Be Distributed Early?
In many cases, a trustee can make partial distributions while waiting for the rest of the trust to be settled. If cash is available and there are no immediate debts, a trustee might distribute a portion of the inheritance early. However, they will hold back some assets to cover final expenses and taxes.
However, trustees might want to wait. They could run into financial trouble if they distribute too much too soon and later discover outstanding debts.
What If the Trust Requires Long-Term Distributions?
Some trusts are designed to last for years or even generations. In these scenarios, distributions can be affected. These include:
- Trusts for minors: These assets may be distributed at different ages, such as 18, 25, and 30.
- Special needs trusts: These provide lifelong financial support for a disabled beneficiary.
- Charitable trusts: Some trusts make distributions over time instead of in a lump sum.
If you are a beneficiary of one of these trusts, your inheritance may follow a long-term schedule rather than being paid out immediately.
Learn More About Trust Distribution in Wisconsin
How long does a trustee have to distribute assets in Wisconsin? That will depend on the trust, the assets, and whether any legal or financial complications come up. Most trusts are settled within 12 to 24 months, but some can take longer.
Trust administration can be long and complicated. If you have any questions about the distribution or want legal guidance, contact an experienced estate lawyer.
At Collins Law Firm, we offer estate planning, administration, business, and elder law services. Schedule your free and confidential consultation today by contacting us or calling (414) 207-6292.