Probate and Estates
When a loved one dies, there are always questions. Do we have to file papers with the probate court? What do we do with their assets? What about their debts? Talking with an Attorney about these questions and others you may have will make the process easier. Depending on the circumstances, you may have to go through the court system, you may have to file certain forms with the bank and government agencies, or you may have to do nothing at all. Each case is different.
Need help? Give us a call. Our law firm offers free consultations in all our areas of practice and would be more than happy to meet with you and see how we can help you. Our law office serves the communities of Appleton, Neenah, Menasha, Oshkosh, Green Bay, and their surrounding areas.
Frequently Asked Questions:
When Do I Have to Go Through The Court System?
An estate going through the court system is called a probate case. Wisconsin requires any estate worth more than $50,000 to be probated. When you do probate, the court assigns someone to be in charge of transferring or selling assets, paying off creditors, and filing papers with the court showing what happened with the estate assets and debts. This person is called the Personal Representative.
If the total of all the assets is less than $50,000, there are other ways to handle the estate. The most common ways are doing Transfers by Affidavit, Termination of Decedent’s Interest, or Vehicle Title Transfer to Heir. Which of these procedures is needed depends on what type of assets are in the estate.
What is the difference between Formal and Informal Probate?
Formal Probate is when the court watches what happens in the estate very closely. The actions of the Personal Representative are supervised by a judge. There are various court hearings where the judge will review the intentions of the Personal Representative and approve or deny them. Also, the statute requires that the estate hire an attorney.
Informal Probate is where the court still appoints a Personal Representative, but it does not need to approve all the Personal Representative’s actions. Instead, the court reviews the Personal Representative’s papers as the case goes on and makes sure all the assets and debts of the estate were handled. This is available when all the people inheriting from the estate agree to it or when the deceased person had a Will and nobody objected to informal probate. That said, the case can be converted or required to do formal probate if someone requests it.
What If They Did Not Have a Will?
If the deceased person did not have a will but had more than $50,000 in assets, then the case still has to do formal or informal probate. The family simply picks who they think would be the best person to be the Personal Representative. If the family cannot agree, then the case has to go through formal probate. Who gets the assets of the estate when there is no will is called Per Stirpes. That is a statute that lists who gets the assets of the estate and looks at if the person had a spouse, had children, had grandchildren, had siblings, or any other family members.
If the estate’s assets total less than $50,000, then other procedures can be used, but the Per Stirpes statute still applies. The estate can be handled with Transfers by Affidavit, Termination of Decedent’s Interest, or Vehicle Title Transfer to Heir. Which of these procedures is needed depends on what type of assets are in the estate.
What If Their Spouse Is Still Alive?
If the deceased person’s spouse is still alive, then the estate is likely worth less than $50,000. This is because Wisconsin is a community property state and jointly owned assets usually go to the spouse automatically. If that is the case, then probate is not needed. That said, there are many instances where assets are titled in only one spouse's name and probate may still be needed. Even if probate is not needed, the estate needs to be reviewed. The deceased person’s name needs to be removed from vehicles, real estate, bank accounts, and other titled assets. If this is not done, the family will have a lot more work to do after the spouse dies.
What about their Debts?
If the estate must be probated, the court requires the Personal Representative to give notice to all known creditors of the deceased and to post notice of the probate in the newspaper. The court will also order a due date for creditors to file their claim against the estate. If they do not file their claim by the due date, they do not have to be paid by the estate.
If the Estate does not have to be probated and other procedures are used to transfer assets, then the person receiving the assets is liable for the debts, but only up to the value of the assets received. For instance, if a person receives a $1,000 from an estate that was not probated and the estate has a debt of $4,000, then that person is liable for up to $1,000 of that debt. That sounds scary, so talking with an attorney about this can be helpful before anything is done with the assets.
Another issue to watch for is Medicaid repayment. If a person was on Medicaid when they died, then the expenses paid by Medicaid during their lifetime must be paid by the estate. The most common time this happens is if a person was in a nursing home for a long time before they passed. Because of how expensive nursing home care is, the amount owed to Medicaid is likely more than the total of all the estate assets. Living in a nursing home, the decedent usually has very few assets. Usually they only have clothing, a television, and some family pictures. There is a list of assets that Medicaid can not take from the estate and it would include most of these things. Either way, talking with an attorney will help decided what to do.