Attorney Thomas B. Burton answers the following question:
"Can We Use Trust Document vs. Letter of Appointment to Handle Estate?"
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Hello and welcome back to our popular Question and Answer Series, I'm Attorney Thomas Burton and this is the series where I answer real viewer questions from across the state of Wisconsin.
Today's question comes from Milwaukee, Wisconsin and the writer asks the following -
"Can we use the trust document and death certificate versus a letter of appointment to handle the estate? My dad passed away this month, everything he owns house, bank accounts, life insurance, mutual funds is in the living trust naming my brother and I, co-trustees upon his death and lists all what we can do."
So first of all, I'm sorry to hear about the passing of your father. It sounds like he did a great job of setting up a revocable living trust entitling everything in the name of the trust and this is the key to avoiding probate and probate court fees and administration on all of his assets.
The good news is if everything is titled in the name of the trust as you indicate, you should be able to avoid probate completely and administer the estate or what would have been the probate estate solely as the trust estate through the trust. You and your brother are co-trustees, so you will administer what we call the corpus or the assets of the trust.
So if there are no assets outside of the trust, you should not need letters testamentary from the probate court or letters appointing a personal representative from the probate court, in order to administer the asset. What you may need to do is obtain an EIN or Tax ID Number for the trust after his death and this can be done, you can work with your attorney to get this Tax ID Number from the IRS. What happens when a person sets up a revocable living trust during life, they often use their social security number as the Tax ID because all the income and expenses of the trust flow through them on their personal tax return but then, when they pass, the trust is required to get its own Tax ID Number, often it's only for a year or two after death while the trust wraps up and distributes the assets held inside of the trust. So your job now is to follow the trust document exactly and distribute and manage the assets as required by the trust.
I would provide the trust certificate or a copy of the trust document to the institutions named above and they may also want to see a copy of the death certificate just to prove that in fact your father has passed, if they aren't aware of that knowledge already.
After that you should be able to proceed according to the terms of the trust agreement with inventorying, managing, selling and ultimately distributing assets and if you need help with the process, I would work with a qualified estate planning and trust attorney who can help guide you through the process.
In my experience, there's much less paperwork that needs to be done with a trust administration than with the probate estate but there are still a few small things like getting that tax id for the trust open in order to administer the trust estate and then ultimately distribute assets and you can benefit from the wisdom and experience of an attorney who has done that before. So I've helped clients with what we call a non-probate trust administration and I've also helped them with probate administrations and the difference is that with probate court, you have the court supervising and setting deadlines and requiring all this paperwork from you. With the trust administration it's a private administration, that means you proceed according to your timeline and it can often be wrapped up quicker and more efficiently than a probate estate, again, it depends on you and your brother’s timeline and the exact assets you need to administer but I would not pay to open a probate, if you don't need, if there are any not any assets that need to pass through the probate court.
Now if there is a will like a pour over will, what we call sometimes a pour over will paired with a trust, it's designed just to pour over any assets that forgot to be retitled during life into the trust, you should still file a copy of the will with the probate registrar in the county where your father resided at death and that would fulfill your responsibility under state law as personal representative to file the will but if there's no assets passing under the will, you have no requirement to actually open a probate because the only reason to open a probate would be to administer assets subject to probate and for other people watching, if there was one small asset out there, let's say one bank account with three thousand dollars in it but that was the only probate asset, Wisconsin does have a small estate transfer by affidavit method for an estate with total probate assets less than $50,000. So if you did fall into that, you could possibly use the transfer by affidavit to get those funds transferred without needing to open a full informal probate.
So great question and thank you for asking because this type of question is often illustrative and helpful to our other viewers watching, who are going through similar situations and if you're watching this video and it has been helpful to you, please consider giving it a LIKE so that others throughout the state of Wisconsin can see and benefit from this information as well.
Thanks for watching and we'll see you next time.
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