After a loved one passes, probate can be long and costly. But, beneficiaries could avoid this process with a small estate affidavit if the estate meets certain requirements. In Wisconsin, heirs can claim the property of the deceased without formal probate when the value of the estate is less than $50,000.
No matter the size of your estate, a financial advisor could help you create a plan to manage and distribute your assets.
How a Small Estate Affidavit Works in Wisconsin
A small estate affidavit is a legal tool used to transfer assets from a deceased person to their heirs without the need for formal probate. This process is only available to small estates, which in Wisconsin includes those with a total value under $50,000. By using a small estate affidavit, heirs can claim their inheritance more quickly and with less expense when compared with traditional probate proceedings.
The small estate affidavit includes the decedent’s name, date of death and a list of assets to be transferred. It must be signed by the heirs claiming the property and notarized. Once completed, you can submit the affidavit to financial institutions, the DMV, or other entities holding the deceased’s assets to complete the transfer.
You should note that the small estate affidavit process is only applicable if there is no pending application or petition for the appointment of a personal representative for the estate. This means that if formal probate has already been initiated, the small estate affidavit cannot be used.
How to Complete the Small Estate Affidavit in Wisconsin
To complete a small estate affidavit, you will need to gather essential details such as the decedent’s name, date of death and a list of assets to be transferred. Here are five basic steps to help you complete a small estate affidavit in Wisconsin.
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Confirm the estate qualifies for a small estate affidavit. In Wisconsin, the total value of the deceased’s estate must not exceed $50,000. This includes all assets, such as bank accounts, personal property and real estate. If the estate meets these requirements, you can proceed with the affidavit process.
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Gather the necessary forms. You can find the transfer by affidavit form on the Wisconsin Court System’s website or from the local probate court. The form requires detailed information about the deceased, including their full name, date of death and a list of assets and their values. If real estate is included in the deceased’s assets, you also need to fill out the Affidavit of Heirship and Affidavit of Service.
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Complete the affidavit(s). First, gather all necessary documentation, such as the death certificate, asset valuations and any relevant financial statements. Next, fill out the affidavit form accurately, making sure all information is correct and complete. Any errors or omissions can result in delays or the affidavit being deemed invalid. If real estate is involved, you must provide copies of the affidavits to any heirs 30 days before filing.
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Notify the Department of Health Services. If the decedent or their spouse received certain long-term care services provided by the state, you send a copy of the transfer by affidavit to the Department of Health Services Estate Recovery Program.
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Get the form(s) notarized and collect the assets. After completing the forms, they must be signed in the presence of a notary public. After notarization, you can present the affidavit to institutions holding the deceased’s assets, such as banks or insurance companies. These institutions will then release the assets to the heirs as specified in the affidavit, but not until 30 days after presenting the affidavit.
Estate Planning Tips for Those Living in Wisconsin
Estate planning is a key step in arranging the distribution of your assets. Knowing Wisconsin laws and regulations can help you create an estate plan for your specific needs. Here are seven tips that could help you get started:
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Understand Wisconsin’s marital property laws: Wisconsin is a community property state, meaning that most assets acquired during marriage are considered jointly owned. This can significantly impact how your estate is divided.
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Create a will: A will is an important document for any estate plan. In Wisconsin, if you die without a will, your assets will be distributed according to state intestacy laws, which may not align with your wishes. Make sure that your will is up-to-date and reflects your current intentions.
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Consider a revocable living trust: A revocable living trust can help you avoid probate, which can be a lengthy and costly process in Wisconsin. This type of trust allows you to manage your assets during your lifetime and specify how they should be distributed after your death.
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Designate beneficiaries: Designate beneficiaries for assets like life insurance policies and retirement accounts. In Wisconsin, these designations can override instructions in your will, so make sure they’re current and reflect your wishes.
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Plan for estate taxes: While Wisconsin doesn’t have a state estate tax, federal estate taxes may still apply. It’s important to understand the federal estate tax threshold and plan accordingly to minimize tax liabilities for your heirs.
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Implement healthcare directives and power of attorney: Having a healthcare directive and a durable power of attorney in place will allow you to designate someone to make medical and financial decisions for you if you become incapacitated.
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Regularly review and update your plan: Life changes such as marriage, divorce, the birth of a child or significant financial shifts require updates to your estate plan. Regular reviews with a financial advisor can help you keep your plans aligned with your current situation and goals.
Bottom Line
Completing a small estate affidavit in Wisconsin can simplify asset transfers for estates under $50,000. This affidavit will require you to confirm eligibility, gather documents and fill them out correctly. Additionally, creating a will, designating beneficiaries on life insurance policies and retirement accounts, and using other estate planning strategies can help you avoid probate.
Estate Planning Tips
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If you need help managing an estate, a financial advisor could help you create a personalized plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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If you want to save some money and create an estate plan on your own, here are some common pitfalls that you should avoid.
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