Probate & Trust Administration
My probate and trust administration services utilize paralegal services to reduce client fees.
What is Probate?
Probate is the court supervised process of validating Wills, gathering assets, ensuring that creditors and taxes are paid, and distributing the remaining assets to the rightful heirs.
What is Trust Administration?
Administering a trust is managing the trust and distributing assets pursuant to the terms of the trust agreement. Trusts requiring administration can be testamentary trusts that are under the supervision of the court or intervivos trusts that are created during the grantor’s lifetime or through a revocable trust. A revocable trust also may require administration after the original grantor passes away and the trust is now a separate taxpayer and is required to terminate.
What are Probate Assets?
There is often confusion between what constitutes taxable estate assets (for estate tax purposes) and what constitutes probate assets, but the distinction can be extremely important. Probate assets are those that pass under the terms of your Will or under the laws of intestacy should you die without a Will.
Non-probate assets are those that:
- Pass by beneficiary designation to a named beneficiary, such as life insurance proceeds, pension or IRA benefits, or annuity benefits;
- Pass by contract, such as under a buy/sell agreement;
- Pass by operation of law, such as property held in joint tenancy with rights of survivorship, payable on death accounts, or marital property with rights of survivorship; and
- Assets transferred during lifetime to a “Living Trust” or “Revocable Trust” which sets out terms for management and ultimate distribution of the trust assets.
What is the Probate Process?
The process of probating an estate is a court-supervised procedure for transferring the ownership of a person’s assets after his or her death. Basically, it is the process of gathering a decedent’s assets, paying all claims made against the estate, filing all required personal income and gift tax returns (if necessary), filing all required fiduciary income tax returns and distributing the remaining assets to the rightful beneficiaries. Probate is a court supervised process and the various steps of the process are given deadlines for the personal representative (called an “Executor” in Illinois) to complete. In Wisconsin, there are simplified procedures available when the total gross value of the assets of the estate is under $50,000 or when the beneficiary of the estate is the surviving spouse.
How much does it cost to Probate an Estate?
The major costs of probating an estate include court costs, costs of buying a probate bond for the personal representative if the Will does not waive the bond requirement, and fees paid to the personal representative and the attorney. All of these fees and costs are paid out of the decedent’s assets.
I utilize paralegal services to help keep the costs of probating an estate down. Most of the legal services related to an estate may be handled by a paralegal under my supervision, with the exception of preparation of the income tax returns, although the paralegal may assemble them for signature and filing which still reduces the cost of the returns.
Not all attorneys charge for probating an estate the same way. I charge on an hourly basis. Some attorneys charge a flat rate. But in all cases, an attorney may not charge you a percentage of the value of the assets being administered. Informal Administration costs less than Formal Administration. Summary Proceedings cost less than Informal Probate.
In Wisconsin, how long does Probate take?
Probate can take two years, or even longer, for a complex, contested, or other reason for the estate to remain open for an extended period of time. I have had an estate where I petitioned the court for an extension of five (5) years to complete the probate process in order to defer taxes that would have passed directly down to the beneficiaries if we had closed the estate earlier. Even for the most simple of estates that must file for informal probate administration, it will typically take a minimum of six months to complete the process.
Why does the probate process take so long?
The main reason is that one step of the process requires the personal representative to send written notice to known creditors and to publish notice for unknown creditors in order to give them an opportunity to file a claim in the estate. Once notice is published, creditors are given three months to file claims.
First you have to prepare and file the paperwork to open the estate with the court in the county where the decedent resided, then send written notice to creditors and have the notice published in the county publication of record.
After the creditor notice period expires, file any personal income and gift tax returns for the decedent that are required to be filed, obtain any appraisals of the property required, file an inventory of the estate assets with the court, file any income tax returns for the estate and/or estate tax returns that are required, make a partial distribution if possible to heirs (including funding any trusts that required to be established pursuant to the Will), and prepare and file a final account with the court if that particular county requires one.
You also must wait for the tax clearance certificates to be received by the personal representative, file the tax clearance certificates with the court that are required if any, make a final distribution to heirs, and then complete the paperwork to close the estate.
If real estate is owned in another state, start a probate proceeding in that state to administer that property. Completing all of these steps can be time consuming.
Therefore, the time required to probate an estate depends upon such factors as the estate size, the type of assets owned, tax issues, the type of ownership for the assets, complexity and number of creditor claims, insurance processing of decedent’s final medical bills, marital property issues, if the assets must be sold to effectuate distribution to the heirs, and if a farm or business is involved.