Does Social Security Pay for Funerals?
Not enough. A surviving spouse or child may apply for a death benefit of $255.
Are There Simple Procedures if the Estate is Small?
Yes, if the probate estate is insolvent or has net assets of less than $50,000. There are three procedures: summary settlement and summary assignment and transfer by affidavit. In summary settlement and summary assignment, a court distributes the assets without appointment of a personal representative. A transfer by affidavit does not require involvement of a court. A personal representative or a family member can obtain title to probate assets by giving the holders a Transfer by Affidavit form. This works for real estate, personal property and money in bank accounts or other financial accounts. The person who files a transfer by affidavit is legally responsible for distributing the property to the rightful heirs. There are also summary procedures for transfers of joint accounts and real estate owned with a right of surviorship (joint tenancies, marital survivorship property, Transfer on Death Deed.)
Do I Need to Go to Court for Larger Estates?
The good news is that you only need to go to court for four reasons. (1) You cannot find the will. (2) The other heirs and interested persons will not consent to admit the will or object to the personal representative. (3) The Estate must file suit or the Estate is named as a defendant in a suit. (4) There is a dispute about the management of the estate or the distribution of assets that cannot be resolved by the personal representative and the heirs. The better news is that the personal representative follows the procedures for informal probate after the court resolves the problem(s). The bad news is that court supervision is required for probate estates with more than $75,000 in assets. The Personal Representative works with the County Registrar in Probate using a procedure known as informal probate. There is an application to file and deadlines to follow to submit accounts for review by the heirs and the Registrar in Probate.
What is Involved in Probating Larger Estates?
Both formal and informal probate begin after the Probate Commissioner or Circuit Court issues domiciliary letters appointing the personal representative(s). The personal representative must submit a beginning inventory identifying the approximate value of assets owned by the estate and a final accounting showing the initial inventory, additional inventory discovered, all income and expenses, and all distributions. There is a probate fee of $2 per $1,000 of assets. The Estate must be formally closed after receiving confirmation that estate taxes have been paid or no estate taxes are due on the decedent's Gross Estate. In most estates that are complicated, the problems arise in valuing all kinds of financial assets, business interests or other properties as of the date of death, liquidating assets so that heirs may receive cash instead of other kinds of assets, managing assets while waiting for them to sell, and completing taxes.
What if We Can't Find the Will or We Don't Have a Key to the Safety Deposit Box Where We Think the Will is Kept?
If problems arise before domiciliary letters are issued or after the estate is closed, an attorney may advise filing a petition for special administration. In these cases, a court appoints someone to perform a specific task and provides letters of special administration giving them the necessary legal authority. For example, a special administrator may be appointed to enter a home to look for a will. Or a special administrator may be appointed to open a safety deposit box.
What If There is Not Enough Money to Pay All the Debts and Expenses (the Estate is Insolvent)?
An estate that cannot pay the debts owed by a decedent is insolvent. Wis. Stats. 825.59 specifies how funds are to be applied to the obligations of the estate. If the applicable assets of the estate are insufficient to pay all claims and allowances in full, the personal representative shall make payment in the following order: (a) Costs and expenses of administration. (b) Reasonable funeral and burial expenses. (c) Provisions for the family of the decedent for living expenses during probate, support of the family education of children and retention of personal belongings including clothes, jewelry, an automobile, household furnishings and $3,000 of additional property. (d) Reasonable and necessary expenses of the last sickness of the decedent, including compensation of persons attending the decedent. There's more in part 2!
What Happens When an Estate is Involvent - Part 2
(e) All debts, charges or taxes owing to the United States, this state or a governmental subdivision or municipality of this state. (f) Wages, including pension, welfare and vacation benefits, due to employees which have been earned within 3 months before the date of the death of the decedent, not to exceed $300 in value to each employee. (g) Property assigned to the surviving spouse up to $10,000. (h) All other claims allowed. There is still more in Part 3...
What Happens When an Estate is Insolvent - Part 3
The personal representative is not responsible for obligations that cannot be paid from the assets of the estate. Sometimes, when there is no money to pay for anything, no one will accept nomination as a personal representative. As noted above, a court can settle insolvent estates without a personal representative if someone provides the court with an inventory of assets and a list of obligations. Creditors of insolvent estates have the legal right to seek payment from assets in the decedents gross estate. This can include assets held by trusts formed with the decedents asssets and the recipients of other non-probate transfers. Often, but not always, trustees are required to pay any expenses and debts that cannot be paid from the probate estate.
Do I Need an Attorney?
It is highly advisable to consult an attorney to be sure you understand your powers and responsibilities as a personal representative, a trustee or a power for disposition of last remains. Sometimes an attorney's role is advisory, offering opinions and recommendations on various issues as they arise. Sometimes the attorney handles all the details of administration subject to approval. Sometimes the attorney and the person(s) responsible for administration divide the work among themselves and/or other experts.