One common objective among people planning their estates is avoiding probate and many of the people who seek to avoid probate use a revocable living trust to accomplish that end. A living trust can be an enormously beneficial tool in the planning and distribution of your estate in Wisconsin. On the other hand, it may be an unnecessary step, since many Wisconsin laws allow you to avoid probate through other estate planning means that may be more appropriate for your unique set of circumstances.
Alternatives to creating a living trust: “transfer on death” designations
If you do decide to create a living trust, the next step is to place assets under the control of that trust so that they will avoid probate when you die. Obviously, the largest asset many people own is their home. For several others, the next most prominent assets they own maybe their financial accounts and their vehicles. Depending on your situation, however, you may not want to place these assets in your trust. Consulting an attorney experienced in handling estate planning options in Wisconsin is crucial to ensure the choices you make in this regard are appropriate for your own personal circumstances.
You may want to fund your home into your living trust through the creation of a deed that transfers legal ownership of the property from you as an individual to you as the trustee of your living trust. However, Wisconsin law also allows people to create a “transfer on death deed,” which operates exactly as the name implies, and similarly avoids probate. In some situations, a transfer on death deed may make sense for your real estate assets if, for example, you still have a mortgage on your home or if you are considering applying for Medicaid.
With your financial accounts, funding them into your trust usually just involves filling out a proprietary transfer form available from the institution holding the account. Similar to real estate though, you may transfer many of these assets without probate by using “transfer on death” or “pay on death” designations. These accounts can include bank accounts, securities accounts, and certificates of deposits, among others. Similarly, your life insurance also avoids probate due to the death beneficiary on it, without the need for a living trust.
Vehicles can be transferred by filling out a form at the DMV. You may discover, though, that titling your vehicles makes dealing with your auto insurance company more difficult. If you have only vehicles with modest resale values, you might consider bypassing the step of placing them in your trust altogether as well.
The upside to using a living trust to avoid probate: simplicity and efficiency
With many of these assets, you may have noticed that the alternative to trusting funding involved “pay on death” or “transfer on death” designations. Be forewarned – using death beneficiary designations means that you must change each one individually should a life event or other circumstance cause you to need to change your distribution plans, whereas funding all these assets into a single living trust may provide you with a more efficient and easier to manage the plan. Having this seamless management of your assets may be a vital benefit if you and your attorney determine that a low-maintenance plan suits you best.
Planning your estate can be an exciting time, as you embark on the process of leaving a legacy, providing for your loved ones, and securing your own peace of mind. This path is filled with many choices, each with its own unique positives and negatives. To help you find the best path for you, we invite you to request a consultation with one of our experienced estate planning attorneys. They have many years of experience helping our clients navigate the paths of estate planning and trust funding, and look forward to helping you get where you are going.