Waukesha Probate & Estate Administration Attorney

Many clients come to Riverwood Legal & Accounting Services, S.C., with a fear of “probate,” even though they are not quite sure what the word means. They are seeking counsel in an attempt to avoid the dreaded unknown. They come to us because we have been recommended as reliable and talented estate planning attorneys. If you have questions regarding any aspect of estate planning or need to create a will or trust fund, our skilled team is here to help.

What exactly is probate?

Probate is simply the legal process through which a will (as in “last will and testament”) is determined to be valid and then administered according to its stated terms. If an individual dies intestate (without a will), the estate will still go through the probate process. The reason probate has a negative connotation is that the process tends to be costly and time-consuming. In many cases, savvy estate planning attorneys are able to create, through judicious actions, one or more carefully constructed trusts that avoid probate altogether.

The goal of probate is to protect the rights of those chosen by the decedent to inherit, whether heirs or other beneficiaries. Probate also determines what the estate owes to creditors and what the estate owes to the federal and/or state government in taxes.

The Role of the Personal Representative in Probate

Typically, the person having his or her will drawn up names a personal representative (known in some states as an executor). This individual is the party chosen to oversee the probate of the estate and is usually a close relative or friend. In some cases, however, the personal representative may be a more distant relative, a trusted business colleague, or a financial institution. If the testator (the person for whom the will is created) does not choose a personal representative, the court will appoint one after the testator’s death.

The duties of the personal representative include:

  • Identifying and assembling the decedent’s assets

  • Managing those assets during probate

  • Paying any rightful creditors, taxes, and administrative fees

  • Distributing assets to heirs and beneficiaries named in the will

The personal representative, like the person who appointed her or him, should have a knowledgeable estate planning attorney as a legal representative. It is sensible when dealing with legal matters to have someone at your side who is not only professional and well-informed on current laws, but who is your personal advocate.

Formal and Informal Probate Administration

There are two types of probate administration: formal and informal. They are differentiated according to whether a judge will supervise the probate process. In a formal administration, a probate judge presides, whereas in an informal administration, the probate process is overseen by the county registrar.

Generally speaking, a formal administration is necessary only if the will is contested (disputed). In a simple, uncontested probate, informal administration is all that is required. Occasionally, however, someone contests the will during informal proceedings, in which case the matter has to be transferred to a judge for formal administration. Though the personal representative has to appear in person at the initial hearing even if it is an informal one, informal administration is less costly and most of the process can be handled through the mail.

Assets that Can Circumvent Probate

There are a number of circumstances in which probate is not necessary, including:

  • If the decedent’s property is valued at less than $50,000

  • If property is owned jointly by another party

  • If the money is in a life insurance policy with a named beneficiary

  • If funds are in bank accounts with “pay on death” (POD) or “in trust for” designations

  • If the funds are in an IRA, pension, 401(k) or other retirement plan

An exception to the last item on this list occurs if the decedent did not name a specific beneficiary to receive the funds. In such a case, the assets in question are considered part of the estate and will, therefore, have to go through probate.

Probate Costs

The aspect of probate that people fear most is the cost of the process. They worry that probate fees will take a big bite out of the estate as a whole. Unfortunately, they are not entirely wrong, which is why it is crucial to work with an estate planning attorney who knows the ropes when are planning for your family’s future.

There are multiple costs included in the process of probate, including court costs, probate bond costs, fees to the personal representative, appraisal fees, and attorney fees. Payment to the personal representative of the estate may equal 2 percent of the estate’s value (minus any mortgages or liens) or it may be an amount specified by the decedent in the will itself. The other combined fees are usually quite high; they may amount to as much as 3 to 5 percent of the total value of the estate.

What taxes does probate involve?

No estate taxes are due on property distributed to a surviving spouse who is a U.S. citizen. In addition, in 2017, estate taxes are due only on estates valued at $5.49 million or more. Under current law, this exemption is adjusted annually for inflation and so is likely to continue to increase each year. Fortunately for those who reside in Wisconsin, there has been no state estate tax here since the end of 2007.

How long does probate take?

Simple probate in which there is no contest or litigation is usually resolved in 9 to 18 months. The cost and time consumption of the probate process vary according to the size and complexity of the estate and the flexibility of the court’s schedule. Very large estates with complicated layers take considerably longer, especially if they are contested.

Reasons for Prolonged Probate

Apart from a will being contested, there are several reasons that probate takes an extended period. Components that delay the process include:

  • Time to notify creditors after the death

  • Time for creditors to file claims against the estate

  • Time for the personal representative to file income tax returns for any income earned by the estate after the death
  • Time for the personal representative to file estate tax returns

  • Time to settle business matters if a business is part of the estate

As mentioned earlier, estate taxes need only be paid on estates valued at $5.49 million or more. If estate taxes do have to be filed, however, the personal representative must wait to receive tax closing letters from the Internal Revenue Service in order to close the probate.

Why You Need Riverwood Legal & Accounting Services

The varying time periods necessary for probate are largely determined by how carefully your estate planning has taken place, It is important, for example, that your attorney has helped you set up appropriate trusts and business succession plans to protect your assets from unnecessary taxation. It is also essential that your lawyer has assisted you in making sure that your loved ones have sufficient funds to tide them over until the probate process has been completed.

The skilled attorneys at Riverwood have the foresight and attention to detail that can, in many cases, enable you to avoid probate altogether by putting your assets into joint ownership or into a revocable living trust. However simple or complex your financial situation is, and no matter what the size of your estate, Riverwood Legal & Accounting Services, S.C. is ready to guide and protect you and your loved ones. Contact us today for a free consultation.