Setting Up a Wisconsin Revocable Trust: A Comprehensive Guide
When it comes to estate planning, understanding the various tools at your disposal is crucial. One such tool, often overlooked, is a revocable living trust. While there are a few different types of trusts, revocable living trusts offer a simple and effective solution to manage your assets during your lifetime and distribute them efficiently after your death.
At Dahlberg Law Group, we understand that every family is different, and we are dedicated to helping families in Wisconsin plan for the future based on their individual circumstances.
In this article, we’ll delve into trusts, specifically revocable living trusts, and help you determine if this is the right choice for you and your family’s estate planning needs.
What is a Trust?
Let’s start with the basics. In this article, we’ll primarily focus on revocable living trusts, but first, let’s cover the fundamental components of any trust. Here are the three key parties involved in a trust:
1. Grantor: The person who creates the trust. 2. Trustee: The individual responsible for managing the trust’s assets. 3. Beneficiaries: Those designated to receive the trust’s assets.
Unlike a will, a trust bypasses the lengthy legal probate process. Nonetheless, all types of trusts, including living trusts, manage assets throughout an individual’s life and allocate them following their death.
A trust is a more intricate tool for estate planning than a will. For a more comprehensive comparison between wills and trusts, refer to our article titled “Wills Vs. Trusts.”
What is a Wisconsin Revocable Trust?
A revocable living trust, often referred to as simply a revocable trust, allows individuals to manage their assets during their lifetime and dictate how these assets will be distributed upon their passing.
One of the main advantages of revocable living trusts is their flexibility. They can be altered entirely or even canceled at any time during your life.
Difference Between Wisconsin Revocable Trust and Irrevocable Trust
The main difference between a revocable trust and an irrevocable trust lies in the flexibility and control they offer.
Revocable Trust: Can be modified, altered, or even completely revoked at any time during the grantor’s lifetime. This means the trust can be updated based on changing life circumstances.
Irrevocable Trust: Once established, cannot be easily changed, amended, or canceled without the consent of the beneficiaries. This lack of flexibility is often balanced by potential benefits such as tax advantages and protection from creditors.
Why Use a Wisconsin Revocable Trust?
Families may use a revocable living trust because it provides a high level of privacy, as the assets held within the trust pass to others outside probate.
Additionally, it is active during your lifetime, including if you become ill or disabled. The flexibility is another significant benefit, allowing you to alter its terms or even dissolve it entirely if your circumstances change.
Despite not offering immediate tax benefits, a revocable trust can help reduce lifetime expenses and preserve wealth, making it a powerful tool for protecting your family and assets.
When Should I Create a Wisconsin Revocable Trust?
Determining the right time to create a revocable living trust can depend on several factors. If you are under the age of 50, a living trust may not be necessary yet, as it involves years of management.
The trust must be created when the person is considered mentally able to agree to the document, or it won’t be legally binding. A revocable trust can also be beneficial if you want your money to be available immediately after death for those who it will be passed on to.
What Assets Can Be Placed in a Wisconsin Revocable Trust?
A variety of assets can be placed in a Wisconsin revocable trust. Common assets include:
- Real estate properties
- Valuable personal possessions like jewelry
- Bank accounts
- Investment portfolios
- Small business interests
However, it’s worth noting that certain assets, such as retirement accounts and medical savings accounts, may not be ideal or permitted to be held in a revocable trust. An experienced estate planning lawyer can provide guidance on what assets of yours can and should be placed in this trust.
What Are the Disadvantages of Wisconsin Revocable Trusts?
Although a Wisconsin revocable trust offers many advantages, there are some potential drawbacks that should be taken into consideration. One of the most significant drawbacks is the lack of tax benefits. Additionally, revocable trusts do not protect you from possible creditors.
Another item to note is that revocable living trusts are usually more expensive to set up than other estate planning tools because of the time required to create one. That is why it’s important to speak with a professional who can help decide if creating one is right for you and your family.
How to Create a Wisconsin Revocable Trust
Considering a revocable living trust is an important step in estate planning. To create a trust, consider working with a qualified estate planning attorney. Dahlberg Law Group has years of experience helping families in Wisconsin protect their futures. Contact us to learn more about the estate planning process today.
How to Set Up a Wisconsin Revocable Trust: A Comprehensive Guide
Setting up a revocable trust in Wisconsin can be a smart move for anyone who wants to avoid the probate process, provide for loved ones, and protect assets. However, the process can be complex and overwhelming. In this article, we will guide you through everything you need to know to set up a revocable trust in Wisconsin.
What is a Wisconsin Revocable Trust?
A revocable trust, also known as a living trust, is a legal document that holds assets and property during a person’s lifetime and specifies how these assets will be distributed upon their death. The trust is “revocable” because the person who creates it (the grantor) can modify or revoke the trust at any time. A revocable trust can be a useful estate planning tool because it can help you avoid probate, provide for your loved ones after your death, and protect your assets from creditors and lawsuits.
Why Create a Wisconsin Revocable Trust?
Creating a revocable trust in Wisconsin has several benefits. One of the main benefits is avoiding the probate process.
Probate is the court-supervised process of distributing a person’s assets after their death. Probate can be time-consuming, expensive, and stressful for loved ones, especially if there is no will or the will is contested. By creating a revocable trust, you can ensure that your assets are distributed according to your wishes without going through probate.
Another benefit of a revocable trust is that it provides more flexibility than a will. You can specify how and when your assets will be distributed to your beneficiaries, and you can even include instructions for your care if you become incapacitated. A revocable trust also provides privacy because it does not have to go through the probate process, which is a matter of public record.
How to Set Up a Wisconsin Revocable Trust
Setting up a Wisconsin revocable trust requires several steps:
Step 1: Choose a Trustee The first step in setting up a revocable trust is to choose a trustee. A trustee is the person or institution responsible for managing the trust’s assets and distributing them to the beneficiaries. You can choose to be your own trustee or appoint someone else, such as a family member, friend, or professional trustee. If you choose to appoint someone else, make sure they are trustworthy and capable of managing your assets.
Step 2: Draft the Trust Agreement The next step is to draft the trust agreement. The trust agreement is the legal document that creates the trust and specifies how it will be managed and distributed. The trust agreement should include the following information:
- The name of the trust and the grantor
- The trustee’s name and contact information
- The beneficiaries’ names and contact information
- The trust’s purpose and goals
- The assets that will be held in the trust
- The terms and conditions for managing and distributing the assets
- The revocation and amendment provisions
- The trustee’s compensation and powers
You should hire an attorney to draft the trust agreement. Setting up a revocable trust in Wisconsin can be a complex process, and a mistake can be costly. An attorney with experience in estate planning can help you navigate the legal and financial aspects of setting up a revocable trust. They can also advise you on tax implications and help you ensure that your assets are protected and distributed according to your wishes.
Step 3: Fund the Trust The next step is to fund the trust. Funding the trust means transferring your assets into the trust’s name. This can include real estate, bank accounts, investment accounts, and personal property. By funding the trust, you ensure that the assets are managed and distributed according to the terms of the trust agreement.
Step 4: Maintain the Trust Once the trust is established and funded, you must maintain it. This includes managing the assets, keeping accurate records of transactions, and making any necessary amendments to the trust agreement. You should also review the trust periodically to ensure that it still meets your goals and objectives.
Conclusion on Wisconsin Revocable Trusts
A revocable living trust can be an excellent tool for estate planning, offering flexibility, privacy, and the ability to avoid probate. However, it’s essential to consult with an experienced estate planning attorney to ensure that a revocable trust is the right choice for your individual circumstances. At Dahlberg Law Group, we have the expertise and knowledge to guide you through the process of setting up a revocable trust in Wisconsin. Contact us today to learn more about how we can help you protect your assets and plan for the future.
FAQ – Wisconsin Revocable Trusts
1. What is a revocable living trust?
A Wisconsin revocable trust is a legal document that allows individuals to manage their assets during their lifetime and dictate how these assets will be distributed upon their passing. It offers flexibility as it can be altered or revoked at any time during the grantor’s life.
2. How does a revocable trust differ from an irrevocable trust?
The primary difference lies in flexibility and control. A Wisconsin revocable trust can be modified or revoked during the grantor’s lifetime, while an irrevocable trust, once established, cannot be easily changed without the consent of beneficiaries.
3. When should I create a revocable living trust?
The ideal time depends on various factors, but it’s often recommended when you want immediate availability of your assets after death or if you seek privacy and flexibility in managing your assets.
4. What assets can be placed in a revocable living trust?
Assets that can typically be placed in a revocable living trust include real estate, personal possessions, bank accounts, investment portfolios, and small business interests. Some assets like retirement accounts may not be suitable for inclusion.
5. What are the disadvantages of revocable living trusts?
While offering advantages, Wisconsin revocable trusts may lack immediate tax benefits and do not protect against creditors. They can also be more expensive to set up due to their complexity.
6. How can I set up a revocable living trust in Wisconsin?
Setting up a Wisconsin revocable trust involves selecting a trustee, drafting a trust agreement, funding the trust, and maintaining it. Consulting with an experienced estate planning attorney is crucial for this process to ensure it aligns with your goals and needs.
For more detailed information on setting up a revocable trust in Wisconsin and personalized guidance, contact Attorney Steve Eichstaedt at Dahlberg Law Group.
For more resources on estate planning, you can refer to the Family Estate Planning in Wisconsin provided by UW Law School and the State Bar of Wisconsin’s Wills and Estate Planning webpage.
If you have any questions or need assistance with your estate planning, don’t hesitate to reach out to the lawyers at Dahlberg Law Group. We’re here to help you protect your family’s future and navigate the complexities of estate planning.