How Wisconsin Law Handles Estate Planning for Married Couples

Estate planning is a crucial aspect for married couples in Wisconsin, ensuring that their assets and wishes are managed according to their preferences after death or in the event of incapacity. Understanding Wisconsin’s unique laws relating to estate planning can help couples make informed decisions.

In Wisconsin, the most common estate planning documents include wills, trusts, and powers of attorney. Each serves a specific purpose and can be tailored to meet the needs of married couples.

Wills

A will is a legal document that outlines how a person's assets will be distributed after their death. In Wisconsin, both spouses can create individual wills or a joint will. However, joint wills can lead to complications if one spouse wishes to change their estate plan after the other spouse has passed away. Therefore, it’s generally recommended for each spouse to have their own will, detailing their specific wishes.

Trusts

Trusts are another important estate planning tool. In Wisconsin, married couples often use revocable living trusts to avoid probate, which can be time-consuming and costly. With a revocable trust, assets can be transferred to the trust during the couple's lifetime, allowing for greater control over asset distribution and management. This can especially benefit couples with children from previous marriages, as trusts can clearly define how assets are to be shared among beneficiaries.

Powers of Attorney

Powers of attorney are vital components of estate planning, granting a designated individual the authority to make decisions on behalf of a spouse if they become incapacitated. Married couples should consider both healthcare and financial powers of attorney, ensuring that their wishes regarding medical treatment and financial matters are respected in times of need.

Community Property Laws

Wisconsin operates under community property laws, meaning that most assets acquired during the marriage are jointly owned by both spouses. This simplifies the division of property upon the death of one spouse, as the surviving spouse typically inherits 100% of the community property automatically. However, it is essential to note that separate property owned before the marriage, or received as a gift or inheritance, remains separate unless commingled with marital assets.

Beneficiary Designations

Married couples should regularly review and update beneficiary designations on financial accounts, retirement plans, and insurance policies. In Wisconsin, if a spouse is named as a beneficiary, they will typically inherit those assets directly, bypassing the probate process. It’s important to ensure that these designations align with the couple’s overall estate plan.

Tax Considerations

Wisconsin does not have an estate tax, which benefits married couples when planning their estates. However, it is essential to be aware of federal estate tax laws, as they may apply during the estate settlement process if the value of the estate exceeds a certain threshold.

Conclusion

Effective estate planning for married couples in Wisconsin involves a comprehensive understanding of wills, trusts, powers of attorney, and community property laws. By collaborating with experienced estate planning attorneys, couples can navigate these complex laws, ensuring that their desires are honored and their loved ones are protected.

Regularly reviewing and updating estate plans is vital, especially when life events occur such as births, deaths, divorces, or significant financial changes. This proactive approach will ensure that estate plans remain valid and reflective of the couple's current wishes and circumstances.