In this article...
In this article, we will discuss these five commonly asked questions about trusts in Wisconsin such as: How do I set up a trust in Wisconsin?, How does a trust work in Wisconsin?, What are the advantages of a trust in Wisconsin, What are the disadvantages of a trust in Wisconsin, and Which is better in Wisconsin, a trust or a will?
Creating a trust in Wisconsin for different needs is an option for anyone considering do some estate planning in Wisconsin. There are a few different types of trusts and the trusts themselves are fairly flexible depending on how they are constructed. Many people often ask which is better, a Wisconsin will or trust? The answer is that is really depends on what your goals are both overall and for what you want the trust to do for you.
1) How Do I Set Up A Trust in Wisconsin?
Prior to setting up a trust in Wisconsin you need to think carefully about what your goals are and what assets you want to fund the trust with. You should consult with an experienced Wisconsin estate law attorney prior to making the decision to create a trust. Here is a simplified list of how a trust is created in Wisconsin:
- Pick what kind of trust
- Pick out your trustee
- Select your beneficiaries
- Have the trust document drafted
- Sign the trust document in front of a notary
- Place assets in the trust
You can name yourself as both a trustee and a beneficiary if you want to control and access the trust during your lifetime. A simple explanation of the types of trusts and what they are used for is given in the next section. If you are creating a trust in Wisconsin, you will need to sign the final trust document in front of a notary. Once you have the trust document complete and signed in front of a notary, you will place assets into the trust, a process known as “funding the trust.” Once the trust is funded, it is active.
The cost of creating a trust in Wisconsin varies. If you are just planning on creating something simple on your own then the cost will naturally be lower. On the other hand, if you want to create a more complicated trust or use the trust for a special purpose you should work with an experienced Wisconsin estate law attorney who can advise you on choices and create an appropriate trust for you so that you can be certain of getting the results you want and not
2) How Does A Trust Work In Wisconsin?
There are five basic kinds of trust, you select your trust based on what you want it to do. The majority of people who look at forming a trust are typically trying to avoid the probate process and use the trust in place of a Will.
Revocable- aka the “living trust” and the most popular stand in for a will. This trust is the most flexible type of trust but you will have to pay some taxes on it.
Irrevocable-The irrevocable trust is potentially dangerous if not handled by an expert. The irrevocable trust is usually created to avoid taxes and probate BUT but once it is in place you can’t change it or break it usually-you shouldn’t try to create a revocable trust without an experienced estate planning attorney, this trust becomes active once it is funded and you cannot change any terms of the trust, hence the trust being referred to as irrevocable.
Testamentary-The testamentary trust is a trust that is created by terms laid out in your will. The assets in the trust WILL be subject to probate taxes and the distribution is still fairly slow
Marital-The marital trust is a revocable trust used for passing your estate to your surviving spouse and it will be taxed.
Bypass-The bypass trust is typically used to “bypass” federal estate taxes and it is for married couples with substantial assets, its usually a combination of a martial trust and a family trust. The martial trust is revocable and passes directly to the surviving spouse. The family trust is irrevocable and those assets don’t pass to the surviving spouse they pass to other family members.
The trust ends when all beneficiaries are paid or when the trust instrument says the trust ends
3) What are the Advantages of a Trust In Wisconsin?
If it’s the post death transfer of assets you want it for then a revocable trust has many advantages, its private and potentially less expensive. Having a trust instead of a will also means it is unlikely to be challenged in court as it is very hard to claim that you were incompetent when you created the trust. Trusts are flexible within reason, meaning that you can use a trust in several different ways, depending on your goals. When funds are distributed through a trust, the grantor retains total control of how the trust funds are distributed. If a trust is created in order to pass assets after death the use of a trust will save the estate money on court costs and estate taxes.
4) What are the Disadvantages of a Trust in Wisconsin?
Generally there are not many disadvantages to having a trust in Wisconsin. There is some additional paperwork involved in getting assets transferred to the trust and you need to keep accurate records for the trust. Any time over the years when you transfer assets in or out of the trust you will need to make sure you maintain an accurate record of the transfer. A will you can just create and sign in front of witnesses and then the will is complete as long as you don’t want to make any changes to the will. One “disadvantage” of a trust vs. a will is that the creditor claims period for a will is shorter than the creditor claims period for a trust. If the estate incurs debt any creditors only have about three months to make a claim on an estate passing by will but since a trust keeps operating regardless of the grantor being deceased
5) Which is Better in Wisconsin, A Trust or a Will?
It depends on what your goals are, both legal instruments have their advantages and disadvantages but living trusts are rapidly becoming very popular as a way to avoid probate. If you think that you would be interested in creating a living trust, or any other trust, to protect your assets and have a greater degree of control over them even after you deceased then you
should meet with an experienced Wisconsin estate planning attorney to discuss your options.
What to Expect From a Consultation
The purpose of a consultation is to determine whether our firm is a good fit for your legal needs. Although we often discuss expected results and costs, our attorneys do not give legal advice unless and until you choose to retain us. Although most consultations are complimentary, some may carry a charge depending on the type of matter and meeting location.