Who Inherits if There is No Beneficiary in Place?
If a person passes away without a valid estate plan, then their assets must first pass through probate before they can be transferred to the people who will inherit them. When a person dies without a will, then they are considered to have died “intestate.”
This means Wisconsin’s intestacy laws will ultimately determine how the decedent’s assets are distributed:
- If you pass away with a surviving spouse but no children, then your spouse inherits everything.
- If you pass away with children but no spouse, then your children inherit your assets.
- If you pass away and leave behind a spouse and children who are all descendants from that spouse, then your spouse inherits your assets.
- If you pass away with a surviving spouse and at least one child who isn’t a descendant of that spouse, then your spouse will receive half of your separate property, while your children will inherit your portion of the community property and half of your separate property.
- If you pass away without a spouse or children, then your parents inherit your assets.
- If you pass away without a spouse, children, or parents, then your siblings inherit your assets and so on.
These defaults can lead to disastrous results, including estranged relatives receiving your hard-earned property; parents who receive Medicaid benefits losing eligibility because of an inheritance; or even the proverbial “laughing heirs” with whom you have no relationship and would have preferred selected family members, friends, or charities to inherit.
Types of Estate Administration
There are three main types of probate proceedings in Wisconsin:
- Transfers by Affidavit: This transfers the decedent’s assets for estates worth $50,000 or less with a written statement. However, this option requires notice of the transfer to the estate recovery program for any benefits the deceased may have received such as Medicaid.
- Informal Administration: Although a personal representative must be appointed with this option, it doesn’t require regular court appearances. Informal administration is supervised by the Probate Registrar and is probably the most common type of probate in Wisconsin.
- Formal Administration: This circuit court-supervised procedure is required if one of or more of the heirs doesn’t consent to informal administration.
Which of My Assets Go Through Probate?
If any of the following property is in your name when you die, then it must pass through probate:
- Bank accounts with no co-owner and no beneficiary
- Home or other real estate property owned alone
- Home or other real estate property co-owned as tenants in common without the “right of survivorship”
- Stocks and bonds
- Investment accounts with no co-owner and no beneficiary
- Retirement accounts with no co-owner and no beneficiary
- Life Insurance proceeds with no beneficiary or all beneficiaries are deceased.
- Personal property like clothing, jewelry, furniture, and cars
If you want to avoid probate, you will need a comprehensive estate plan that includes a revocable living trust. When you establish a revocable living trust, you choose a trustee who will be responsible for carrying out the specific instructions and terms of the trust. By putting your assets in a revocable living trust, you can bypass probate because the trustee, not you, owns the property. This means the property in the trust is not counted as part of the probate estate.[BC1]
Our legal team at Kitzke & Canfield LLC is here to assist if you need help setting up a comprehensive estate plan to ensure your assets and hard-earned money are distributed to the right people after you pass away. Give us a call today at (262) 387-0706 to request a case consultation with our compassionate lawyers to discuss your situation and unique planning goals.