Have a Little Respect for Your Estate Plan
An American icon died last week. Aretha Franklin was the Queen of Soul, and with that came celebrity. Even with an attorney of nearly 30 years who counseled her through her triumphs and tribulations, she died unprepared. Like many people, the Queen of Soul died without a will or trust. And the Queen was not alone in her neglect. Prince died in April of 2016, also without an estate plan. His estate, estimated to be around $200 million before taxes, is now being overseen by individuals he did not choose. These celebrities exemplify the cautionary tale of why it is so important to get a will or trust in place during your life. What they have left is a costly legacy for their heirs and plenty of work for lawyers.
Even if you aren’t music royalty, or you don’t have diamonds or pearls to distribute or bequeath to loved ones upon your passing, the importance of executing an estate plan in life is important for many reasons. Like Aretha Franklin’s attorney, who tried to get her set one up for years, we often preach about the benefits of establishing an estate plan to both clients and potential clients. The consequences of dying intestate, or without having an executed will or trust, are selling points enough.
First and foremost, let’s explain the basic terms of estate planning. A will is a document that passes a decedent’s assets to beneficiaries named in the document. The will names a personal representative, and that personal representative administers the estate and pays the beneficiaries pursuant to the terms of the will. A will must be filed with a probate court and goes through an administration process, or judicial proceeding, in probate court. It is public, takes time, and is very hard to navigate without legal help.
Often, people will form a trust to avoid probate. A trust is typically set up during the life of the decedent and typically funded (assets are put into it) during the decedent’s lifetime. The decedent, during his or her lifetime, is the trustee and the beneficiary. When the decedent dies, the trust document names a successor trustee who distributes the trust’s assets to the beneficiaries of the trust. A trust does not go through probate. The successor trustee administers a trust wholly outside of probate.
In Wisconsin, whether or not you have a will or trust determines who administers your estate and who receives your assets. If you die without a will or trust in place, your assets are administered by someone determined by the state laws of intestacy. The court appoints someone, either a surviving spouse, an adult child, or other heir, to administer your estate in probate, meaning your estate will be handled by someone whom you did not choose in life. This is the current situation with Prince’s estate. Additionally, without a will or trust, the laws of intestacy dictate who the heirs of your estate are. With a will or trust, you choose your beneficiaries who will receive your assets. Essentially, when you die intestate, the state of Wisconsin and the laws of the state choose for you who administers your assets and who is given your assets.
Another factor that many people are not aware of regarding probate is that the process requires that the assets of the estate be publicly listed on CCAP. The personal representative is responsible for submitting an inventory of total assets in the estate to the probate court. The probate court, in turn, publishes the inventory. Industries exist to search the probate court records and inquire about the deceased’s home being sold or cleaned, or servicing the family of the deceased in some other way. Some of these are legitimate, but some prey on people at this difficult time. This can be a nuisance or downright disrespectful.
There is also cost of probate in time and money. Probate requires numerous documents be filed with the court and vast amounts of information be compiled. The process of filing probate documents is complex, and therefore attorneys, including myself and other Axley attorneys, are regularly retained to assist and file probate documents with the probate court. Each county is different and requires different documents and processes. It can be a highly stressful process if you are not familiar with it, especially while you are mourning the loss of a loved one. On top of that, probate is a time-intensive process to file and see the estate through the process.
Probate is neither timely nor convenient. Probates can take up to a year or more, with simple estates, and longer with complex estates. Often, personal representatives have to drive to an attorney’s office to personally sign documents that require notarization in order for the documents to be in the necessary form to be submitted to the probate court. Additionally, some probate courts require that heirs, beneficiaries, personal representatives, or the estate attorney appear in court. This takes time and money for all parties.
When advising clients, we are transparent about fees and processes. We either charge an hourly or flat fee, depending on client desires and the issues with the estate process. Axley attorneys are advocates of putting the time and cost in how to formulate an estate plan so that you and your loved ones can avoid the consequences of probate and dying without a will.
We are transparent about the process of drafting an estate plan, and walk our clients through the various considerations that must be made before finalizing an estate plan. Our approach is to make estate planning as efficient and cost-effective as possible because we believe that everyone deserves to be able to afford an estate plan.