Attorney Thomas B. Burton explains how to avoid probate on the family home at the death of the first spouse in Wisconsin. Attorney Burton explains how married couples can take advantage of a powerful form of holding property as marital property with rights of survivorship to avoid probate upon death on the first spouse to pass in Wisconsin.
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Attorney Thomas Burton here and today, I want to give you a quick tip on how married couples can avoid probate on the family home, upon the death of the first spouse, to die.
So many people know that Wisconsin is a marital property state, we call it marital property, it is also called, community property in other states such as California. And what that means is, as a community property, a marital property state, there is an easy way to avoid probate on the family home upon the death of the first spouse to die and that's to hold the home titled as 'survivorship marital property'. So Wisconsin Statutes allow it in 760 here, 766.6, the words 'survivorship marital property' are used instead of the words, 'Marital Property'. In the form described the marital property so held is 'Survivorship Marital Property'. On the death of a spouse, the ownership right of that spouse and the property vest solely in their surviving spouse by non-testamentary disposition at death. The first deceased spouse may not dispose at death of any interest in survivorship marital property, holding marital property in a form described in subsection 1 or 2, does not alone establish survivorship/ownership between the properties with respect to the property held.
So survivorship marital property is the term that you can see we sometimes use on a deed, especially for the family home, it will say survivorship, husband and wife as survivorship marital property and this is an easy way to avoid probate upon the death of the first spouse to die.
Now there's an additional tax benefit to this because in community property states, the IRS allows what we call a 'Double Step Up in Basis', upon the death of the first spouse to die, meaning the entire property can get reevaluated at the death of the first spouse, at the current fair market value. So if you bought the home in 1980 for a $100,000 and the first spouse dies in 2020, and the home is worth $200,000, you can get that 'Double Step Up in Basis' on both halves for property held as survivorship marital property.
So for many couples in Wisconsin, this is the preferred method of holding the family home if they want the surviving spouse to stay, living in it and receive their half. If you have a blended family or you want, you have to go to your children, you maybe don't want to hold title to your property this way. But for many married couples, husband and wife as survivorship marital property on the deed to the home, will accomplish this goal of giving it to their surviving spouse without the need for probate on that spouses half, on the undivided interest in the marital property in the home.
So that's a quick tip on how you can do some estate planning through the title of the asset itself, in this case, through the deed to the home, and many people buy their home and never look at the deed again, so this is a reminder, at the beginning of the new year, to look at that deed. I always recommend you have a comprehensive estate plan in place including will or trust powers of attorney, healthcare powers, financial powers and other things and to work with a qualified attorney to put it in place. But I know, some people are also looking for peace of mind, about the assets they currently have and are maybe working on their estate plan or intending to do it soon.
So this is a quick reminder, one thing you can check and make sure you have the deeds setup correctly, the way you wanted on the home, and if you want to avoid probate upon the death of the first spouse, again, look for those words, 'Survivorship Marital Property'. That will do it, for husband and wife, a married couple in Wisconsin.
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