Probate is a legal process through which an individual's estate is administered after that individual passes away. Generally, the probate process is supervised by the Court. The probate process is designed to ensure that debts of the decedent are paid and that any assets are distributed to the appropriate beneficiaries.
When is probate needed?
There are two common situations where an estate may need to go through the probate process.
First, if a person has a Last Will and Testament ("Will") when he or she passes away, then probate will often be required. The Will must be filed with the Court, and the Court will determine whether the Will is valid and should be honored.
The second her situation when probate will often be required is when a person passes away with no estate planning of any kind. If a person dies without a Will or other estate planning, the person's probate assets will ultimately pass to his or her "heirs," according to Wisconsin law. The law defines who those heirs are depending on the person's marital status, children, and other family relationships.
What is a Personal Representative?
The Personal Representative is the person that the Court appoints to handle the probate process. You may also hear this person referred to as an "executor."
If you have a Will, you are permitted to nominate a specific individual or organization to serve as Personal Representative. However, that nominated party will not actually become Personal Representative until the Court approves the nomination and appoints the party to act.
In Wisconsin, the Personal Representative is authorized to receive 2% of the total probate assets as compensation for his or her service in this role, unless the Will states otherwise.
Is there any way to avoid probate?
Some clients wish to avoid the probate process, because it is a matter of public record, and many people would prefer that their financial matters remain private. Those individuals who wish to avoid probate will utilize "non-probate" transfers in their estate plans. Some examples of non-probate transfers are as follows:
1. If an asset is jointly owned, with rights of survivorship, the asset will generally pass directly to the surviving owner(s) without going through probate. This is common with joint bank accounts.
2. If there is a valid beneficiary designation, the asset will generally pass to the named beneficiary or beneficiaries without going through probate. This is common on life insurance policies and retirement accounts.
3. If an asset is held in a trust, it will generally not pass through probate. Instead, the asset will be governed by the terms of the trust. A trust is the most common non-probate transfer document that an attorney will prepare. There are many different types of trusts.
When you meet with an estate planning attorney, you will likely discuss probate and non-probate options for administering your estate when you pass away. Many estate plans include a combination of probate and non-probate strategies.
Each individual's estate plan should be tailored to that specific individual, because every individual's assets, income, family situation, and wishes are unique.