A Complete Guide to Making a Living Trust in Wisconsin

Creating a Wisconsin living trust ensures your family's future is secured and your assets are protected. Establishing a living trust lets you control how your property is handled and determine who will benefit from it.

It empowers you to have greater control over your assets, streamline the distribution process, protect your wealth, and provide for your loved ones. Creating a living trust is a proactive step that helps you achieve your estate planning goals and effectively implement your wishes.

What is a Living Trust?

A living trust is an essential document created while the person making the trust or the grantor is alive, placing his assets and property in a trust.

It must have a trustee to maintain the trust property and deliver it to the appropriate beneficiaries. Grantors can appoint themselves as trustees or someone else to fulfill the role.

Why should you make a living trust in Wisconsin?

Making a living trust in Wisconsin is important for several reasons. It allows grantors to control the management of their assets during their lifetime and after death.

By establishing a living trust, grantors can specify how their property should be handled and who should be the beneficiaries.

Furthermore, making a living trust can help grantors avoid probate court. The probate process is usually time-consuming, costly, and open to public scrutiny.

However, with a living trust, assets can pass directly to the chosen beneficiaries without going through probate, saving time and money, and maintaining privacy.

Additionally, a living trust can be beneficial when grantors become incapacitated or unable to manage their estates and affairs. A properly structured living trust allows grantors to designate a successor trustee who can step in and manage the trust assets on the grantor's behalf, ensuring the financial matters are handled according to the terms mentioned in the trust document.

Types of Living Trusts

Revocable living trust

A revocable living trust is a type of living trust which provides grantors some amount of liberty to make decisions.

In a revocable trust, the grantor retains ownership of any property held in the trust. It means the grantor can change the trust or take out property placed in the trust at any time.

In addition, the grantor continues to pay taxes on it as usual.

Irrevocable living trust

An irrevocable living trust is permanent and cannot be changed.

Property placed in an irrevocable living trust cannot be removed from it without the permission of every party involved. In other words, the trust owns the property placed in it entirely.

In addition, the trust pays taxes on the trust's holdings.

Steps to Make a Living Trust in Wisconsin

Determine the type of living trust to make.

Grantors must decide on the type of living trust most suitable for their needs. A single living trust is ideal for single individuals, whereas couples may opt for a single or joint living trust where couples can add both individual and jointly owned properties.

Identify assets to be included.

Grantors must assess their assets and actively identify which assets they should place in the trust. Ideally, placing as many assets in the trust as possible is advisable.

Determine the trustee and beneficiaries of the trust.

Grantors are required to name a trustee who is responsible for handling the trust property. Grantors may name themselves as the trustee of the living trust. However, they will require to name a successor trustee who administers the trust assets after the grantor's demise or incapacitation and passes the trust property to the beneficiaries chosen by the grantor.

In addition to choosing a trustee and a successor trustee, grantors must choose their beneficiaries who will receive the trust property.

Make the trust document.

After making the necessary decisions, grantors may draft the trust document. Grantors may use online resources to create the trust document or hire an attorney to draft the document.

Sign the document.

Once the trust document is made, the grantor must sign it in the presence of a notary public.

Place property in the trust.

Placing property in the trust or transferring ownership of assets to the trust may require some paperwork. It essentially establishes that the trust holds the property.

Difference between a Living Trust and a Will in Wisconsin

A Will and a living trust in Wisconsin are essential financial estate planning tools.

Making a Will in Wisconsin can help the testator or the person making the Will add various instructions. For instance, testators making a Will can provide instructions like appointing a guardian to care for minor children, managing property on their behalf, selecting a legal representative to ensure the distribution of assets to beneficiaries as mentioned, etc.

Creating a living trust can help grantors retain control over their assets during their lifetime and pass them on to the chosen beneficiaries. In addition, grantors may also mention a specific date or conditions for passing on assets to beneficiaries.

Furthermore, grantors can avoid the probate process and prevent their assets from going on public record.

Estate Tax in Wisconsin

Wisconsin does not have its own estate tax.

In addition, the federal estate tax is only payable on estates valued at about $12 million. For estates worth about $12 million or a combined estate worth nearly $24 million, grantors may be able to employ a more intricate trust to decrease or avoid federal estate taxes.

Closing Thoughts

Creating a living trust in Wisconsin is valuable in securing your assets and ensuring a smooth estate transition to your chosen beneficiaries.

By following the necessary steps and seeking professional guidance, you can establish a legally binding document that gives you control, privacy, and flexibility over your assets during your lifetime and beyond.

A living trust offers numerous benefits, including probate avoidance, asset protection, and the ability to specify your wishes for asset distribution.