How to Use Joint Tenancy to Avoid Probate in Wisconsin

Joint tenancy is a popular estate planning tool used in Wisconsin to avoid probate, a legal process that can be time-consuming and costly. By understanding how joint tenancy works, you can effectively manage your assets and ensure a smoother transfer upon death. This article explores how joint tenancy operates, its benefits, and the steps to set it up.

What is Joint Tenancy?

Joint tenancy is a form of property ownership where two or more individuals hold equal shares of an asset. The most significant feature of joint tenancy is the right of survivorship, which means that upon the death of one owner, their share automatically passes to the surviving owners without needing to go through probate.

Benefits of Joint Tenancy in Wisconsin

Utilizing joint tenancy offers several benefits, including:

Avoiding Probate: Since the asset automatically passes to surviving owners, probate procedures can be bypassed, saving time and money.
Simplicity: Transferring ownership through joint tenancy is straightforward and less cumbersome compared to other estate planning methods.
Control: Joint tenants can manage the property together, allowing for easy decisions regarding the asset.

How to Establish Joint Tenancy in Wisconsin

Setting up joint tenancy in Wisconsin involves several key steps:

Choose the Property: Determine which property you want to place in joint tenancy. This can include real estate, bank accounts, or investments.
Draft a Deed: If it's real estate, you must prepare a new deed that clearly states the property is held in joint tenancy. Make sure to include both owners' names and specify the right of survivorship.
Sign the Deed: Both joint tenants must sign the deed in front of a notary public to validate it.
Record the Deed: Submit the signed and notarized deed to your county Register of Deeds office. This step is crucial as it officially documents the joint tenancy and protects the interests of all parties involved.

Considerations When Using Joint Tenancy

While joint tenancy has advantages, it's essential to consider the following:

Debt Risks: If one joint tenant has debts, creditors may claim against the property, affecting other owners.
Control Issues: Joint tenants have equal control over the asset, which may lead to conflicts regarding management and use.
Gift Implications: Transferring property into joint tenancy can have gift tax implications, so understanding the tax consequences is important.

Alternatives to Joint Tenancy

If joint tenancy does not align with your estate planning goals, consider alternatives such as:

Living Trusts: A revocable living trust allows you to control your assets and avoid probate, providing greater flexibility and privacy.
Beneficiary Designations: For financial accounts and life insurance, naming beneficiaries directly can bypass probate.

Conclusion

Joint tenancy is an effective tool for avoiding probate in Wisconsin, providing a straightforward way to transfer property upon death. However, it’s essential to weigh the benefits against potential drawbacks and consider other estate planning methods. Consulting with an estate planning attorney can help tailor the best approach for your individual situation, ensuring your assets are handled according to your wishes.