Attorney Shannon Wynn: Remember the safe deposit box

Estate planning clients often give much thought to avoiding probate (see related article). Wynn at Law LLC helps jog your memory to make certain you haven't 'forgotten' an asset that would trigger probate. A common one forgotten, as an example, is the safe deposit box. Yes, banks still have them in the vault. In fact, it's a common storage place for the Last Will and Testament. Why not? It's safer than a home safe, and someone always has a key. But what else is in there?

Wisconsin allows an ‘interested party’ to access the safe deposit box to retrieve the Will. On the death of a sole owner of a safe deposit box, a safe deposit box company (bank) allows 'limited' access to the box by the spouse or next of kin of the deceased lessee, a court clerk, or other interested person for the only purpose of looking for a Will. The assets also in the box are not to be touched. While that interested party is in the box, he or she is supervised to make sure that doesn't happen. If the Will itself doesn't name anyone to the receive the safe deposit box assets, probate may be necessary.

A strategy to consider is naming an adult child or family member or friend as a joint owner of the safe deposit box, with a key. This alleviates the problem of having a sole owner of a box pass away. Then the Will can be retrieved and so can the assets without going through probate. (Note: There could be tax considerations when the joint owner takes possession, it only avoids probate because the joint owner of the box is considered joint owner of the asset.)

By the way, if there is a sole owner, whomever is the 'interested party' is may have to furnish proof of death as it deems necessary (e.g., the death certificate of the owner). That could delay things as well. With a joint owner who is a keyholder, they have access anytime. This could be a time-saver in the case of a loved one's passing. Just remember, that joint owner will also have access to the safe deposit box contents while the loved one is living, too.

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Arman Zhenikeyev, used with permission.

Attorney Shannon Wynn: Transfer on Death Deeds eliminate probate

When any of Wynn at Law LLC's clients own real property in Wisconsin, we look at a Transfer on Death Deed (commonly called a TOD Deed or a TODD) to see if it is a suitable fit for their estate plan. It can sometimes wipe out the need to go to probate court, which is a time and cost saver.

As our earlier article pointed out, if you have $50,000 or more in probate assets, probate court comes into play when distributing assets. Probate assets are all assets NOT automatically transferred to another person when the owner passes. Life insurance proceeds, for example, skip probate because a beneficiary is identified. So, if assets can avoid probate, why not place a TODD on an asset like a vacation home to transfer it directly to beneficiaries, such as the kids?

The answer in some cases is that if you need to protect assets – for or from your children – you might not want to transfer them on your death. For the minor kids, you might want to transfer the asset to a trustee for their benefit until they're older. In the case of adult children who may have creditor problems or a looming divorce, you might again want a trustee instead of transferring the property to them directly. Otherwise, a TODD making assets 'unprobatable' is an alternative for every Wynn at Law LLC client because the property doesn't need to be owned free-and-clear. You can have a mortgage, a second mortgage, even a line of credit against the property and still use the TODD to pass it on… and skip probate.

Let's say you had a car and some bank assets totaling $49,995 and a $89,000 getaway cabin up north. All in, the assets would require probate, but if a TODD was placed on the cabin, the cabin passes to your heirs (they still get the debt if it was mortgaged, by the way) and the rest of the estate would avoid probate because it's under the $50,000 limit.

Your accountant, or your beneficiary’s, will point out that there may be tax benefits to this strategy as well, because the transfer isn't considered a 'gift' subject to gift tax. The TODD may also reduce or eliminate capital gains taxes if and when the property is sold by the beneficiary.

Even if you have the Transfer on Death Deed, you can still choose to sell a property while you're living: It's yours! The TODD designation does not give the beneficiary 'ownership' of the property while you're alive… if the document is drafted properly. Call an attorney.

 

*The content and material in this original post is for informational purposes only and does not constitute legal advice.  

Photo by Ekaterina Kondratova, used with permission.