Wednesday, March 29, 2017

I was nominated as a Personal Representative in a Will, now what do I do?

A loved one has just passed away and someone tells you the decedent nominated you as the Personal Representative of their Estate in their Last Will and Testament. What does this job entail? What authority do you have? What should be your first steps?

In a nutshell, the role of a Personal Representative (also sometimes called an "Executor") is to oversee the gathering of a decedent’s probate assets, pay all necessary creditors, and make distributions in line with the terms of the Last Will and Testament. The Personal Representative is the "manager," overseeing the entire probate process.

A Last Will and Testament should list a particular person(s) to act as Personal Representative. If a will was never executed and no other estate planning documents were completed, an interested person, usually a close friend or family member, petitions the Probate Court to be appointed.

In either case, the Probate Court determines whether to approve the individual, and if a bond will be required to be paid by the nominated Personal Representative as collateral against the value of the probate assets.

If approved by the Probate Court, Domiciliary Letters will be issued to the Personal Representative. Domiciliary Letters serve as formal proof that the Personal Representative has the legal authority to act. Often banks, credit unions, and other financial institutions require this Letter prior to releasing any information.

Throughout the process of administering an Estate, the Personal Representative will also want to keep a close eye on the deadlines mandated by the Probate Court. Deadlines often include: filing a required Notice to Creditors, filing an Inventory of the decedent's probate assets, and filing a final Estate Account listing all the expenses and payouts to beneficiaries. Sample blank forms can be found on the Wisconsin Court System website:

The Personal Representative is also responsible for paying any outstanding bills, selling any estate assets, submitting final tax returns, and more. There are often specific time deadlines complicating each step of the process of administering an Estate.

It is not uncommon, given the steps involved, to have a probate proceeding open anywhere from 9-15 months, or longer.

If you have questions or concerns about the probate process or your job as Personal Representative, please click here. We are more than happy to guide you through the probate administration and what to expect as a personal representative.

Friday, March 17, 2017

Do I need a Will or a Trust?

What is a will? What is a trust? How does one differ from the other? Which one do I need? Rightly so, there is a fair amount of confusion concerning wills and trusts. While there is no standard one-size-fits-all approach, understanding each document can help determine the best fit for your family.

A will is designed to instruct the probate court of your wishes on how you want your assets distributed. You can name individuals, charities, or any legal entity to receive an amount or percentage of your assets. From a cost perspective, a will is relatively inexpensive to set up on the front-end.

One drawback of a will is that it must go through probate, prior to any distribution of assets to beneficiaries. Probate involves extra costs, delays and formalities required by the court. The process typically costs several thousands of dollars and takes months or years.

So, how does a trust differ? A trust avoids court intervention and allows your assets to be distributed outside of the probate court. This allows for direct distribution of assets, no court formalities and limited or no attorney fees. A trust, however, is often more costly to prepare than a simple will.

A trust can also offer unique protections for beneficiaries that a will cannot. A trust can specify when, how much and for what purpose a beneficiary can receive assets. For example, a trust may designate that a beneficiary can receive 1/3 of their share at age 25, 1/3 at age 30, and the remainder at 35. Under a simple will, a beneficiary will receive their entire share outright unless they are a minor. This is just one of many unique legal protections trusts offer.

As with any choice there are positives and negatives to consider. A will is not for everyone. A trust is not for everyone. Discuss your goals, your specific family situation, and your concerns with your attorney. Only after weighing these factors can you achieve the best choice for you and your family.

To find out what whether a will or a trust is right for you, considering signing up for a complimentary Life & Legacy Planning Session with one of our attorneys.  We will walk through your goals and objectives to find out what is right for you!  Click here to sign up for this complimentary appointment today!