Most folks who we assist with estate planning have had an experience with a family member’s probate, whether directly or indirectly. Over the years we’ve heard a variety of stories about bad probate experiences, as well as misconceptions about what probate is and what it involves.
What probate is: Probate is simply the process of administering a Will according to its terms. This can cover everything from appointment of a guardian for minor children if their parents die, to the exercise of a legal right on behalf of a deceased individual, or most commonly, to transfer the ownership of property held in the name of an individual who has died.
There are a few general considerations that affect the process. As a matter of standard procedure, there is an initial question of whether or not there is a valid Will. After this is resolved, there are numerous steps to the probate process.
If there is a Will, the main details of proceeding will be laid out in the Will subject to confirmation by a court. If there is no Will, state law specifies most terms for the probate proceeding.
Wisconsin Statutes and local rules can make the process tedious in either scenario. This is by design (and arguably for good reason). Why does it have to be so tedious? It’s largely to ensure that the process of transferring property ownership isn’t abused.
Of course, typically (when there is a Will and the appointed Personal Representative is willing to serve), the individual whose property is being legally transferred to a subsequent owner has died, the Personal Representative is a person of the deceased individual’s choosing, and property will be distributed at the in accordance with the deceased individual’s instructions.
Indeed, the result of the probate process is quite unobjectionable. But nevertheless, at its most basic level, the process empowers a surviving person to legally take ownership of an individual’s property—so naturally, checks, balances, and formalities are associated.
The probate process has to be tedious because individuals have such broad discretion with how they’d like to distribute their property at the time of their death. The deceased individual’s wishes stated in the Will could be to leave everything to a surviving spouse, to leave everything to the deceased individual’s children equally, to leave everything in trust for one or more beneficiaries, to leave everything to charity, etc. Everyone’s wishes will be different to some degree.
The probate court’s role is to ensure that the deceased individual’s Will is followed and the PR is acting according to the deceased individual’s wishes. Formalities are necessary in the process. As you can see, it’s for good reason.
What probate isn’t: Probate doesn’t apply to assets where there are built-in instructions for how the asset should be transferred upon the owner’s death. A common example of that would be for an IRA or 401(k), where beneficiaries are typically designated as part of standard procedure. If that’s the case, there’s no need to take ownership from the deceased person by means of a legal proceeding. In that case, the custodian will have its own process for transferring the asset.
Probate also isn’t necessary for collecting assets when the total value of all probate assets is under $50,000, although there may still be formalities associated with the process of collecting these assets.
(Nor is probate typically necessary if an estate plan is in place, a client’s goal is to avoid the probate process by use of a trust or through other means, and the client has taken the initiative to follow through with pre-planning.)
What it shouldn’t be: Generally speaking, excessively long. There are several varieties of assets that may prolong the process, but the only delay required by the Wisconsin Statues is the 3-4 month period that allows creditors to make final claims against the probate estate.
Some issues (especially related to sale or distribution of real estate, or tax resolution) tend to make the process longer. However, the majority of our probate cases are completed within a year of being opened. Our general observation has been that most estates requiring a long time to close are caused by issues other than transferring ownership of estate assets or are due to issues beside the 3-4 month delay required by law.
How we add value: While the probate process isn’t straightforward, our firm has practiced in the areas of estate planning and administration since its beginnings. We’ve seen many common mistakes made by fiduciaries who are unfamiliar with the process laid out by the Wisconsin Statutes. Although the mistakes typically result in headache, they may cause additional delay or cost. We add value by reducing these for the Personal Representative and beneficiaries when possible.
While each probate estate has its own considerations, our experience is that clients value the efficiency we can add during the probate administration process, and reduce their headache, delay, and perhaps even overall cost.
Let us know if we can be of assistance.
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