Updated January 25, 2024
The Wisconsin living trust is a legal agreement created to provide instructions for distributing one’s assets after they die and to allow continued access in the event they become mentally incapacitated. A Trustee is appointed to manage the trust (the Grantor may choose to name themselves Trustee) during the Grantor’s lifetime and pass the assets along to the named Beneficiaries upon the Grantor’s death. The main benefit of establishing a living trust is to avoid probate court after the Grantor dies. Probate in Wisconsin can be a lengthy process and the court fees will add up quickly. Bypassing this procedure will allow the Trustee to distribute assets to the Beneficiaries in a private manner, whereas all assets within a person’s will are made public record once they go through probate.
Laws – Chapter 701 (Trusts)
Will (Last Will and Testament) – A will only becomes effective once the person who created it dies. Assets within the will are not protected and must be distributed to the heirs in probate.
Types
Irrevocable – This type of living trust has the advantage of protecting the Grantor’s assets and minimizing estate taxes. Once signed by the Grantor, the trust cannot be amended and ownership of assets transfers to the trust.
Revocable – A revocable trust can be altered at any point during the Grantor’s lifetime. Once the Grantor dies, it becomes irrevocable. It will avoid probate but cannot protect against unwanted claimants.
Individual Roles
Grantor – Individual who creates the agreement.
Trustee – Individual appointed to manage the trust. The Grantor may appoint themselves Trustee but a Successor Trustee must also be appointed.
Successor Trustee – Individual in charge of distributing assets within the trust to the named Beneficiaries upon the Grantor’s death. The Successor Trustee will take over control of the trust in the event that the Grantor becomes mentally unfit to do so (if the Grantor is also the Trustee.)
Beneficiaries – Individuals who will inherit the assets once the Grantor dies. Grantor will often name themselves a Beneficiary so they may have continued use of their assets.
How to Make a Living Trust in Wisconsin
In order to create a living trust in Wisconsin, one must follow the requirements drafted in Wisconsin State Legislature § 701.0402. The Grantor (creator of the trust) must have the capacity to create it and must appoint a Trustee (and Successor Trustee if they name themselves primary Trustee) and Beneficiaries. The Trustee will have the responsibility of performing the instructions laid out in the trust. Upon the Grantor’s death, Beneficiaries will inherit the assets within the trust bequeathed unto them or, if they are not of age, the assets will be managed by the Trustee until they are. Although it is not a legal requisite, signing the document in front of a notary public is recommended. The Grantor should transfer all their assets (or as many as possible) into the trust. Property owned outside of Wisconsin should be included in the trust in order to avoid the state’s probate process in which it is located.
Real Estate – Transferring property into the trust will require a Wisconsin Deed. The consultation of an attorney might be necessary to figure out which type of deed is best suited to one’s particular situation.
Motor Vehicles – The title and ownership of one’s vehicle must be switched to the name of the trust. This process will require a Wisconsin Bill of Sale.
Do I Need a Living Trust in Wisconsin?
A living trust is a viable option for those with large estates and multiple properties (in Wisconsin or in other states) as it might avoid an expensive, long-drawn-out probate process. A revocable trust also allows the assets to be claimed by the Beneficiaries privately, which might be enticing to some families. An irrevocable trust has the added benefit of protecting one’s assets from lawsuits and creditors, and could even help minimize estate taxes. It’s important to note that the creation and maintenance fees attached to a living trust can be considerable.
Anyone with a small estate will find it rather useless to create a living trust as it will cost them more time and money to maintain than it’s worth. Wisconsin, like most states, has a small estate law in place which can be taken advantage of to evade probate. Heirs of the deceased may claim inheritance of assets using a Wisconsin Small Estate Affidavit as long as the estate is valued at $50,000 or less.