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Yes! There are many ways you can pay for your bankruptcy. Under normal circumstances, Wynn at Law, LLC requires the full amount due before beginning work on your bankruptcy case. Our bankruptcy office accepts personal checks and cash as payment. Sorry, no credit cards can be used to pay for your bankruptcy attorney fees. We also understand that many of our Chapter 7 bankruptcy clients are under financial distress. This is why we offer two types of payment plans for Chapter 7 bankruptcy clients. We offer a standard plan which requires a monthly payment of $125. We also offer customized plans for special circumstances.
Most sales of a person’s primary residence are exempt from taxes on capital gains, that is, the difference between the sale price (including some costs of the sale), and your “basis” (what you paid for the home, some costs of the purchase, plus any capital improvements you made to the home). This is generally true as long as the gain is less than $250,000 (or $500,000 for a couple) and the owner has owned and lived in the property at least two out of the last five years. The timing of your sale can affect whether you will owe any capital gains tax, and how much you will owe. You can discuss details of taking advantage of this valuable exemption with your attorney. To calculate your gain, you should keep good records of the purchase and sale of the home, and all capital improvements made while you own it. Tax programs to stimulate home purchases in a down market also may be available. Consult with your attorney or financial advisor if you have questions.
Many of the processes described above apply in any real estate transaction, including the sale or purchase of vacant land and vacation properties. Buying or selling certain types of properties – such as a farm, lake property, condominium, cooperative, investment property, time-shares and so on – also may involve special legal considerations. Investment real estate is subject to capital gains tax; however, it’s possible to create legal arrangements to defer this tax. See an experienced real estate attorney for advice.
This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.
Other titles include: Arrest; Bankruptcy; Buying/Selling Residential Real Estate; Choosing a Process for Divorce; Custody and Placement; Durable Powers of Attorney; Divorce; Guardians Ad Litem in Family Court; Health Care; Hiring/Working with a Lawyer; Landlord/Tenant Law; Marital Property; Personal Injury; Probate; Revocable Living Trusts; Small Claims Court; Starting a Business; Traffic Accidents; Wills/Estate Planning.
9/2009. © State Bar of Wisconsin
A seller’s attorney can:
Again, if legal conflicts or questions arise at any point during the course of the sale, only your attorney can provide you legal advice.
You’ll need a contract with a builder that covers what’s to be built, what happens if there are changes to plans, costs, performance standards (time for construction, warranties, and so on), and more. A contract describes all parties’ rights and obligations. Construction contract forms in Wisconsin are not standardized or state-approved as are the Offer to Purchase, buyer agency, and listing forms. The Wisconsin Builders Association has prepared a model home construction contract. Be sure the contract protects your interests and that you fully understand it. Your attorney can negotiate and review a construction contract on your behalf. If you’re buying a home that a builder is already building, you’ll most likely use the Offer to Purchase to address most of these issues, especially warranties, amenities, and time for completion.
You can hold title to property as an individual, with another person(s), or in the name of an entity, such as a trust, limited liability company, or corporation. If you’re married, Wisconsin’s Marital Property Act affects how you own property. The law presumes that all property owned by spouses is marital property, belonging to both of you equally, but you may have individual ownership, if you desire.
A lawyer can advise you on your options for holding title. (See also the State Bar’s pamphlet, Answering Your Legal Questions About Marital Property.)
Two or more unmarried people can own property together as tenants in common or joint tenants. It’s wise to have an attorney prepare an ownership agreement spelling out the parties’ rights and obligations in the property.
When you buy a home, you need to be sure the seller has good title to the property. That’s where title insurance comes in. It protects you against defects in the seller’s title.
The title insurance company checks various records and issues a title insurance commitment that gives information about the title. For instance, who owns the property? Are there liens (such as unpaid tax bills) the seller should pay off before selling? Are there any easements and restrictions on the property’s use? It is important to understand all of these matters, because they can seriously affect your use and enjoyment of the property.
The title insurance commitment is an important and complex legal document that requires legal expertise to understand. Simply receiving a title insurance commitment before the closing does not by itself mean that you are getting “clean title.” Ask your lawyer to review the title insurance commitment to be sure the title presents no problems that will surface to haunt you later.
Buyers usually obtain financing from a commercial lender, such as a bank, credit union, or other loan provider. The lender investigates the buyer’s finances and credit history to determine eligibility for a home mortgage. An attorney can help evaluate the various mortgage options and check mortgage documents. An attorney can help resolve problems with your application. There are special concerns when the financing is for new construction.
Another financing option is a land contract, in which the seller finances the buyer’s purchase of the property. This arrangement involves negotiations between the buyer and seller. Be sure you get sound legal advice to protect your interests.
An attorney can:
You also can buy and sell a home without working with an agent. Then it’s even more critical to seek an attorney’s assistance in the buying and selling process.
This arrangement is what’s known as “for sale by owner,” or FSBO (pronounced “fizzbo”). By selling your house yourself, you save the commission you would have paid to a real estate agent. But count on investing more of your own time. You’ll need to analyze the market, decide on a price, advertise the house and host open houses, handle all negotiations with prospective buyers, and so on.
Buying a FSBO also is somewhat different than buying with a broker involved. The buyer will need to become familiar with area values to decide what price to offer for the home. It is wise to have a lawyer prepare the Offer to Purchase. The lawyer can suggest appropriate contingencies, and can guide you through the rest of the transaction.
It’s unwise to tackle a FSBO transaction without legal advice. An attorney can review Offers, write Counteroffers, and guide you through the many steps involved in a FSBO transaction.
Real estate agents are frequently involved in real estate transactions and work under various arrangements, including providing limited services for reduced fees. If you see an advertisement for a house for sale, the agent is working for the seller, as you’d expect, under a “listing” contract. That agent has professional obligations to look out for the seller’s interests.
In recent years, a new type of agent relationship has become increasingly popular – that is, the buyer’s agent. The buyer’s agent is professionally bound to represent only the buyer’s interests and is paid by the buyer. The agent can tell you information about the seller or the property that might be useful to you. And the agent won’t disclose information you prefer the seller not know about you.
Is a buyer required to work with a buyer’s agent? No. Many buyers work satisfactorily under the traditional agent arrangements.
Whether the agent is primarily the agent of the seller (under a listing contract) or of the buyer (under a buyer agency contract), the agent owes a duty of “fair dealing” to all parties. Part of that duty is to keep confidential anything that someone wants or would reasonably expect to be kept confidential.
If you decide to work with a real estate agent, have your attorney review the agency agreement before you sign it, to be sure the arrangement is exactly what you believe it to be.
When all contingencies are met and amendments signed, the transaction can close. The Offer provides the date when the closing will occur. At the closing, the buyer and seller must sign numerous, complex legal documents. It’s wise to have your attorney there to explain the documents and to answer your questions. Attorneys often spot potential problems that can be cleared before the closing and assist with unanticipated problems that can arise at the closing. After closing, the deed is recorded at the register of deeds office for the county in which the property is located. This puts the buyer’s ownership of the property on public record. Once the deed is recorded, it is returned to the buyer. The buyer also will receive his or her title insurance policy. Your attorney can review these documents for legal accuracy.
The Offer to Purchase states the price the buyer is willing to pay for the house, the date the sale will close, and other important terms of the transaction. There is a state-approved form for Offers used in nearly all home sales. It can be completed by a party to the transaction, a real estate agent, or an attorney. State-approved forms are revised periodically. There often are one or more attachments (or addendums), which add more terms to the Offer.
The Offer will usually include contingencies to protect the parties by setting conditions that must be met. Common contingencies include financing and professional house inspection. Depending on the transaction, the Offer might include other contingencies, such as septic and well inspections, land survey, sale of the buyer’s home, and occupancy by the seller after closing. The attorney can advise the buyer or seller about which contingencies are appropriate. By law, the seller must provide a condition report disclosing any known defects in the property, and a disclosure regarding lead-based paint.
The seller can respond to the buyer’s Offer by accepting it, rejecting it, or making a Counteroffer presenting different terms for the sale. The
Offer/Counteroffer process may go back and forth until both the buyer and seller are satisfied. When the buyer and seller sign the contract, it becomes a legally binding contract, subject to satisfying any contingencies.
If the inspection discloses significant defects in the property there may be further negotiations on repairs or credits. The lawyer can advise the buyer or seller about the inspection provisions that are best for the client. The lawyer also can prepare an amendment if the parties modify their purchase agreement due to the inspection, or for other reasons.
It’s critical that the contract be complete and legally enforceable. If your attorney didn’t write the Offer, it’s wise to at least have him or her review this document and any Counteroffers. If your attorney can’t review the Offer before you submit it to the seller, insert a contingency for attorney approval.
A living will is a separate legal document, not a part of your will. And, it’s not the same as a durable power of attorney for health care. The latter allows your agent to make health care decisions for you. A living will, on the other hand, allows you to state in writing your preferences about life-prolonging medical treatment.
In a living will, you can declare that you wish medical professionals to withhold or withdraw life-sustaining procedures or non-orally ingested food and water — if you are in an incurable condition, or you’re near death, or you’re in a persistent vegetative state.
Your living will takes effect only when you become incapacitated, cannot speak for yourself, and there’s no hope for your recovery.
Your durable power of attorney agent also can make these sorts of end-of-life health care decisions for you, if you grant that power. If you have both a living will and durable power of attorney for health care, the latter rules if there is any conflict between the two.
The current law regarding living wills went into effect Nov. 25, 1991. If your living will was written before then, you should have your attorney review it to be sure it still expresses your wishes.
For more information on durable power of attorney for health care and living wills, see the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Health Care.
This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.
Other titles include: Arrest; Bankruptcy; Buying/Selling Residential Real Estate; Choosing a Process for Divorce; Custody and Placement; Durable Powers of Attorney; Divorce; Guardians Ad Litem in Family Court; Health Care; Hiring/Working with a Lawyer; Landlord/Tenant Law; Marital Property; Personal Injury; Probate; Revocable Living Trusts; Small Claims Court; Starting a Business; Traffic Accidents; Wills/Estate Planning.
1/2011. © State Bar of Wisconsin
Yes, one person can serve as both. If you feel you need to name two different agents, be sure they can work together. This would avoid a situation, for instance, in which your agent for finances could interfere with health care decisions by refusing to pay certain medical bills.
This arrangement gives your agent the authority to make health care decisions for you when you’re unable to make them yourself. This is a heavy responsibility for anyone to assume. Be sure you discuss your health care preferences with your agent, so he or she knows what you’d want. This makes the agent’s job much less difficult during what may already be a stressful time.
To create a durable power of attorney for health care, you can use the standard state form. Or, an attorney can create an individualized document for you. Either way, a durable power of attorney must meet specific requirements for it to be valid.
This authorizes another person, called an agent, to act for you in financial matters. The agent’s rights to act on your behalf depend on what you say in your durable power of attorney document. These rights might include the authority to sign legal documents, pay bills, buy and sell real estate, and take other actions on your behalf. Choose a person you trust absolutely.
A durable power of attorney can take effect in one of two ways. If you wish, it can take effect immediately. Your power of attorney may provide that it becomes effective at a later date or if you become incapacitated. A doctor, a judge, or some other person may be named to determine whether you are incapacitated. The latter is called a “springing” power of attorney.
A durable power of attorney ends at your death. Your agent retains no further authority to handle your finances. If you want your agent to settle your financial affairs after you die, you need to name that person as your personal representative in your will.
Yes. A will would be important for several reasons. You may have property that never got transferred to your trust while you were alive. You would need a will to transfer that property to your trust after your death. Or your estate might receive money after your death. For instance, if your death was the result of an accident, your estate may receive wrongful death benefits. Again, you would need a will to transfer this money to the trust.
You also need a will in order to name a personal representative and a guardian for your minor children. That’s not part of setting up a living trust. A personal representative can take certain actions on behalf of your estate that a trustee cannot, such as pursuing a wrongful death claim.
You can create a living trust to control your property while you are alive. The trustee then would control your property after you die. Under this arrangement, you sign documents to give your property to the trust. As long as you’re living, the property usually is treated the same for tax purposes as if you still owned it.
An advantage of a living trust is that property can pass to heirs after you die without going through probate. A drawback is that buying, handling, or selling assets held in a living trust may be more cumbersome while you’re alive. Ask your attorney how a living trust would affect your property.
For more information, see the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Revocable Living Trusts.
You can use your will to create a trust upon your death. The trust holds your property for another person’s benefit. For example, a trust may provide an income for your spouse. Or it can hold property for your minor children until they become adults.
You name a trustee to oversee the trust. The trustee can be either a trusted individual (a friend, relative, or professional advisor) or a financial institution (a bank, brokerage firm, or trust company). The trustee is responsible for protecting the assets, paying out income earned, and terminating the trust as your will instructs.
To be valid in Wisconsin, the will must comply with the laws of one of the following: Wisconsin, or the place where you properly signed your will, or the place where you lived when you properly signed your will.
Be aware, however, that Wisconsin has a marital property law and a same-sex domestic partnership law. If your will is from a jurisdiction with no such laws, you should have an attorney review your will. That way you can assure it still achieves the results you intend.
Place your will where it’s safe from theft, fire, or other damage. A safe-deposit box is one possibility, although it may be difficult for your personal representative to access your safe-deposit box after your death. You also may deposit it with the register in probate for your county.
Be sure your personal representative knows where your will is. Some people also give a copy to their personal representative. You’d want to do this, for instance, if you include funeral preferences in your will. Usually the reading of a will doesn’t happen until after a funeral. So you’d want your personal representative to have a copy on hand, to be able to carry out your funeral wishes.
You have two options. You can simply write a new will, which automatically replaces an older one. Or you can add a supplement, called a codicil, to your existing will. For a codicil to be valid, it must satisfy the same legal requirements as those mentioned for a will.
A person can attempt to prove in court that:
Yes, if you comply with all the above-mentioned requirements to make your will valid. But if in creating your will, you encounter any questions or complexities you don’t understand, it’s a good idea to see your attorney. Remember, this document must spell out all the conditions for transferring your assets. And, if you have minor children, it names their guardian.
A will is an important document. You’ll want to be sure it correctly expresses your wishes and that it’s legally enforceable. A lawyer can give you advice about not only your will, but also other aspects of estate planning you might otherwise overlook. We’ll discuss some of those later.
To be valid, your will must be in writing, and you must date and sign it. At least two witnesses also must sign the will. They can do this after they watch you sign it. If they weren’t present then, you can state to them that the signature is yours, and then the witnesses can sign. The witnesses should not be beneficiaries named in the will or your heirs as designated by law.
These include:
If all your property falls into the above categories, and you have no minor children, you might think you have no need for a will. You may be right. On the other hand, a will may still be wise.
For example, you and your spouse, the other joint tenant, or your beneficiary could die at the same time or that person could die before you. A will would enable you to name alternate beneficiaries. Also, you could save on estate taxes, thus leaving more to your beneficiaries, by using a will to set up a trust.
In this case, the court appoints a personal representative who distributes your entire estate to your surviving spouse or registered domestic partner — unless you have children from outside your current marriage. In that case, your spouse or registered domestic partner retains half the marital property and receives half your individual property, with the rest of your estate split equally among all your children, from this marriage and outside it. (See also the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Marital Property.)
If you have no spouse, registered domestic partner, or surviving children or descendants of children when you die, your estate goes to other surviving relatives. State law lists the order of inheritance as follows: parents, brothers and sisters, nieces and nephews, grandparents, and descendants of grandparents. The state school fund receives your assets if you leave no heirs closer than the descendants of your grandparents.
If you leave behind minor children and have named no guardian in a will, a court must choose a guardian. If a minor inherits money or property, it is likely the court will place it in a guardianship account. Ask yourself: Is that a decision you want someone to make for you?
Having a judge decide who will raise your children can be emotionally wrenching for other family members. Also, court-supervised guardianships entail extra costs. Avoid the upset and expense by naming a guardian in your will.
Finally, bear in mind that if you have no will, the court will appoint a personal representative to administer your estate. Having a will allows you to choose this person. Also, you can stipulate in your will that the personal representative need not post a surety bond, thus saving money for your estate.
If you have accumulated some assets, and you care who will receive those assets after you die, it’s time to write a will.
Anyone with minor children definitely should have a will. In it, you can name the person you want to raise your children, should something happen to you and your spouse. Discuss this carefully with the prospective guardian, to be sure he or she is up to the job. Also, name an alternate guardian in your will as a backup.
On the other hand, if you’re a young adult, have no children, and own few possessions, you probably don’t need a will yet. The state would distribute your possessions to your parents. But if you’d rather leave your car to your girlfriend, or your prized Spider Man comic book collection to a favorite nephew, then a simple will is a good idea.
A will is a written document that allows you to designate:
As with most other legal matters, any person may represent himself or herself before the bankruptcy court. Bankruptcy, however, is a highly refined procedure that is full of detail and interpretations based on prior case law. Each case is different, as are the consequences to the debtor. Proper planning in anticipation of bankruptcy may save a debtor money or property and countless hours of revising improperly completed documents. After a thorough analysis, bankruptcy may be unnecessary. A lawyer skilled in bankruptcy law can assist a debtor so that the process is as effective for the debtor as the specific circumstances allow.
This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.
Other titles include: Arrest; Bankruptcy; Buying/Selling Residential Real Estate; Choosing a Process for Divorce; Custody and Placement; Durable Powers of Attorney; Divorce; Guardians Ad Litem in Family Court; Health Care; Hiring/Working with a Lawyer; Landlord/Tenant Law; Marital Property; Personal Injury; Probate; Revocable Living Trusts; Small Claims Court; Starting a Business; Traffic Accidents; Wills/Estate Planning.
7/2011. © State Bar of Wisconsin
Bankruptcy involves a series of steps that usually include the following actions:
1. The debtor gathers financial information for use in preparing the petition for bankruptcy and the schedules of assets, debts, income and expenses, the statement of financial affairs, and statement of intentions concerning secured debts;
2. Obtaining the required pre-filing credit counseling;
3. The debtor files the petition, schedules, statement of financial affairs, and pays the filing fee to the bankruptcy court;
4. The court notifies scheduled creditors of the case filing, the meeting of creditors, the injunctive stay against creditor actions, the last date for creditors to file challenges to the debtor’s discharge or the dischargeability of a particular debt, the initial status of assets available in the case, and other pertinent information;
5. The debtor appears under oath and on record before the trustee to be examined at the meeting of creditors and submits to creditors’ questions;
6. The debtor completes the reaffirmation, redemption, or surrender of secured collateral according to the Statement of Intentions filed with the case; and
7. All parties receive the discharge notice approximately 90 days after filing a Chapter 7 case or at the conclusion of payments in a Chapter 13 case.
A discharge will not be issued unless the debtor has completed a prescribed course in financial management.
Chapter 13 is limited to individuals and unincorporated businesses that have a regular source of income, and whose secured debts are less than $1,081,400 with unsecured debts of less than $360,475. The term “regular source of income” has been interpreted to mean income that is sufficiently definite and certain to enable the debtor to assign it to the trustee on a regular basis for payment by the trustee to creditors.
Chapter 13 is a proceeding under which a debtor proposes to his or her creditors and the court, a plan that enables the debtor to repay as much debt as is feasible given the debtor’s financial circumstances. To be confirmed by the court, a plan must provide that the debtor’s future income be subject to court administration. After determining a reasonable budget, the debtor’s remaining income is paid (generally monthly) by the debtor’s employer to the trustee who, after taking a commission, pays the creditors according to the plan provisions. A plan generally lasts three years, but may last up to five years if the court approves the longer period, or if a debtor is required to propose a five-year plan due to their income level. At the end of the plan, the debtor is entitled to receive a discharge of any remaining debt.
Wisconsin law provides certain protections, called exemptions, that restrict the types of property a creditor holding a judgment may seize and sell to satisfy the creditor’s claim.The federal bankruptcy laws also contain certain property exemptions that protect similar assets, but in quite different amounts. Specific dollar-value of these exemptions are not listed here because they are subject to legislative change. The types of property for which exemptions are permitted include a specified amount of equity in, among other things, one’s personal residence, vehicles, household goods and personal effects, tools of trade, life insurance, and even deposit accounts. Generally, qualified retirement benefits may be excluded from the bankruptcy estate in whole or in part.
When a debtor’s property (called collateral) is secured by a lien (such as a home mortgage, vehicle purchase loan, some furniture purchases, and so on), the debtor must decide whether to retain it or surrender it to the secured creditor. If the decision is to surrender the collateral, the unpaid portion of the loan (or any deficiency after sale of the collateral) generally is subject to discharge along with the unsecured debts.
If a debtor wishes to retain the collateral, the debtor must choose either to reaffirm the debt (sign a written document agreeing to continue making regular or agreed-upon payments on the debt and grant the creditor all prebankruptcy rights upon a subsequent default) or redeem the collateral (pay the creditor the present fair market value of the collateral in one lump-sum). Only items used for personal, household, and family use (including vehicles, but not real estate) are subject to redemption. A motor vehicle may not be redeemed for less than the balance due, if the loan is less than 2 ½ years old.
Finally, a debtor may be able to avoid certain liens on items held for personal or household use (but not vehicles or real estate) and retain the items without either reaffirming the debt or redeeming the collateral. Lien avoidance generally is a matter for the bankruptcy court, and usually has additional cost to the debtor beyond the basic cost of a bankruptcy case. Debtors should ask about additional costs when contacting an attorney about bankruptcy.
It is important to understand that not all debts are subject to discharge under Chapter 7. Among the common debts unaffected by bankruptcy are certain income and business taxes, alimony, child support, property divisions incident to divorce, governmentally imposed fines, forfeitures or restitution, most student loans, and liabilities resulting from drunken driving. Certain abuses of cash advances and credit cards on the eve of bankruptcy are presumed to be nondischargeable, as are debts arising from fraud, misrepresentation, theft, and willful and malicious injuries to a person or property.
For these latter forms of debts to be held nondischargeable, the creditor must bring a lawsuit against the debtor in the bankruptcy court within 90 days of the filing, and obtain a judgment declaring the debt, or some portion thereof, to be nondischargeable. In such a proceeding, the debtor has most of the rights attendant to any other civil trial in federal court, except the right to a jury trial.
The entire discharge may be denied or revoked if the debtor has engaged in fraud (such as making false statements, concealing assets, or fraudulently transferring assets) before, in, or in connection with the case. Proceedings to deny or revoke a discharge are subject to the right to a nonjury trial on the merits as are claims for nondischargeability of debts.
Finally, while a debtor’s personal liability for debts secured by a home, car, boat, furnishings, and the like may be discharged in a Chapter 7 bankruptcy, the affected creditor’s right to enforce its lien against collateral pledged for a loan (such as the right of repossession) is generally unaffected by bankruptcy. To retain the collateral, the debtor may have to reaffirm the debt or redeem the collateral. These concepts will be discussed later.
The most commonly used form of bankruptcy, Chapter 7, provides honest debtors who have limited financial means with a fresh start by eliminating many of a debtor’s most common financial obligations through the discharge (which is generally granted at the end of the case). In return for the discharge, the debtor must turn over to the trustee certain nonexempt assets. These nonexempt assets are sold with the proceeds distributed to creditors according to priorities set forth in the Code. Generally, priority expenses of administering the estate, unpaid wages, domestic support obligations, and taxes are paid ahead of ordinary unsecured claims. If assets remain for distribution to unsecured creditors, those creditors who file formal proofs of claim within the time fixed by the court share proportionately in the remaining proceeds. As discussed below, property that is subject to an otherwise unavoidable lien is generally not administered by the trustee. Such property is covered by the contract between the parties and the rights and remedies available under state law.
In general, the bankruptcy estate consists of all property owned by the debtor or in which the debtor has an interest whether individually or as a co-owner with any other person. In a Chapter 13 case, this also includes post-filing income from all sources, including the income of a nonfiling spouse. The estate includes property the debtor acquires by gift, devise, inheritance, divorce settlements, and life insurance proceeds the right to which arises within 180 days after the filing of the case, and also includes property recovered by the trustee under certain Code provisions. The estate is reduced by exempt assets.The balance of any property remaining for administration by the trustee constitutes the final bankruptcy estate.
In general, bankruptcy proceedings under any Chapter involve:
There are relatively few limitations on who can file bankruptcy. The decision of whether to file, and under what Chapter, is based on each individual’s need for relief from debts, their ability to pay, and their capacity and willingness to undertake a procedure that will have long-term consequences on their financial life. A debt-counselor or attorney can help you consider alternatives to bankruptcy.
Bankruptcy is a uniform, federal court-supervised procedure to relieve individuals and businesses from debts, while protecting and preserving the rights of secured creditors and providing unsecured creditors with equal treatment of their claims.
There are four types of bankruptcy that individuals may select, depending on their particular financial circumstances. Most individuals file under Chapter 7 of the Bankruptcy Code (the Code), sometimes known as “straight” or “liquidation” bankruptcy. Chapter 11 is available to individuals, but generally is used by corporations to reorganize their business affairs. Chapter 12 is designed for use by farmers. Chapter 13, also referred to as a “wage-earner” or “debt-adjustment” plan, is available to individuals and unincorporated businesses that intend to use future income to pay some or all of one’s debts according to a plan designed by the individual (within certain statutory limitations) to meet his or her needs.
Yes! There are many ways you can pay for your bankruptcy. Under normal circumstances, Wynn at Law, LLC requires the full amount due before beginning work on your bankruptcy case. Our bankruptcy office accepts personal checks and cash as payment. Sorry, no credit cards can be used to pay for your bankruptcy attorney fees. We also understand that many of our Chapter 7 bankruptcy clients are under financial distress. This is why we offer two types of payment plans for Chapter 7 bankruptcy clients. We offer a standard plan which requires a monthly payment of $125. We also offer customized plans for special circumstances.
As with most other legal matters, any person may represent himself or herself before the bankruptcy court. Bankruptcy, however, is a highly refined procedure that is full of detail and interpretations based on prior case law. Each case is different, as are the consequences to the debtor. Proper planning in anticipation of bankruptcy may save a debtor money or property and countless hours of revising improperly completed documents. After a thorough analysis, bankruptcy may be unnecessary. A lawyer skilled in bankruptcy law can assist a debtor so that the process is as effective for the debtor as the specific circumstances allow.
This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.
Other titles include: Arrest; Bankruptcy; Buying/Selling Residential Real Estate; Choosing a Process for Divorce; Custody and Placement; Durable Powers of Attorney; Divorce; Guardians Ad Litem in Family Court; Health Care; Hiring/Working with a Lawyer; Landlord/Tenant Law; Marital Property; Personal Injury; Probate; Revocable Living Trusts; Small Claims Court; Starting a Business; Traffic Accidents; Wills/Estate Planning.
7/2011. © State Bar of Wisconsin
Bankruptcy involves a series of steps that usually include the following actions:
1. The debtor gathers financial information for use in preparing the petition for bankruptcy and the schedules of assets, debts, income and expenses, the statement of financial affairs, and statement of intentions concerning secured debts;
2. Obtaining the required pre-filing credit counseling;
3. The debtor files the petition, schedules, statement of financial affairs, and pays the filing fee to the bankruptcy court;
4. The court notifies scheduled creditors of the case filing, the meeting of creditors, the injunctive stay against creditor actions, the last date for creditors to file challenges to the debtor’s discharge or the dischargeability of a particular debt, the initial status of assets available in the case, and other pertinent information;
5. The debtor appears under oath and on record before the trustee to be examined at the meeting of creditors and submits to creditors’ questions;
6. The debtor completes the reaffirmation, redemption, or surrender of secured collateral according to the Statement of Intentions filed with the case; and
7. All parties receive the discharge notice approximately 90 days after filing a Chapter 7 case or at the conclusion of payments in a Chapter 13 case.
A discharge will not be issued unless the debtor has completed a prescribed course in financial management.
Chapter 13 is limited to individuals and unincorporated businesses that have a regular source of income, and whose secured debts are less than $1,081,400 with unsecured debts of less than $360,475. The term “regular source of income” has been interpreted to mean income that is sufficiently definite and certain to enable the debtor to assign it to the trustee on a regular basis for payment by the trustee to creditors.
Chapter 13 is a proceeding under which a debtor proposes to his or her creditors and the court, a plan that enables the debtor to repay as much debt as is feasible given the debtor’s financial circumstances. To be confirmed by the court, a plan must provide that the debtor’s future income be subject to court administration. After determining a reasonable budget, the debtor’s remaining income is paid (generally monthly) by the debtor’s employer to the trustee who, after taking a commission, pays the creditors according to the plan provisions. A plan generally lasts three years, but may last up to five years if the court approves the longer period, or if a debtor is required to propose a five-year plan due to their income level. At the end of the plan, the debtor is entitled to receive a discharge of any remaining debt.
Wisconsin law provides certain protections, called exemptions, that restrict the types of property a creditor holding a judgment may seize and sell to satisfy the creditor’s claim.The federal bankruptcy laws also contain certain property exemptions that protect similar assets, but in quite different amounts. Specific dollar-value of these exemptions are not listed here because they are subject to legislative change. The types of property for which exemptions are permitted include a specified amount of equity in, among other things, one’s personal residence, vehicles, household goods and personal effects, tools of trade, life insurance, and even deposit accounts. Generally, qualified retirement benefits may be excluded from the bankruptcy estate in whole or in part.
When a debtor’s property (called collateral) is secured by a lien (such as a home mortgage, vehicle purchase loan, some furniture purchases, and so on), the debtor must decide whether to retain it or surrender it to the secured creditor. If the decision is to surrender the collateral, the unpaid portion of the loan (or any deficiency after sale of the collateral) generally is subject to discharge along with the unsecured debts.
If a debtor wishes to retain the collateral, the debtor must choose either to reaffirm the debt (sign a written document agreeing to continue making regular or agreed-upon payments on the debt and grant the creditor all prebankruptcy rights upon a subsequent default) or redeem the collateral (pay the creditor the present fair market value of the collateral in one lump-sum). Only items used for personal, household, and family use (including vehicles, but not real estate) are subject to redemption. A motor vehicle may not be redeemed for less than the balance due, if the loan is less than 2 ½ years old.
Finally, a debtor may be able to avoid certain liens on items held for personal or household use (but not vehicles or real estate) and retain the items without either reaffirming the debt or redeeming the collateral. Lien avoidance generally is a matter for the bankruptcy court, and usually has additional cost to the debtor beyond the basic cost of a bankruptcy case. Debtors should ask about additional costs when contacting an attorney about bankruptcy.
It is important to understand that not all debts are subject to discharge under Chapter 7. Among the common debts unaffected by bankruptcy are certain income and business taxes, alimony, child support, property divisions incident to divorce, governmentally imposed fines, forfeitures or restitution, most student loans, and liabilities resulting from drunken driving. Certain abuses of cash advances and credit cards on the eve of bankruptcy are presumed to be nondischargeable, as are debts arising from fraud, misrepresentation, theft, and willful and malicious injuries to a person or property.
For these latter forms of debts to be held nondischargeable, the creditor must bring a lawsuit against the debtor in the bankruptcy court within 90 days of the filing, and obtain a judgment declaring the debt, or some portion thereof, to be nondischargeable. In such a proceeding, the debtor has most of the rights attendant to any other civil trial in federal court, except the right to a jury trial.
The entire discharge may be denied or revoked if the debtor has engaged in fraud (such as making false statements, concealing assets, or fraudulently transferring assets) before, in, or in connection with the case. Proceedings to deny or revoke a discharge are subject to the right to a nonjury trial on the merits as are claims for nondischargeability of debts.
Finally, while a debtor’s personal liability for debts secured by a home, car, boat, furnishings, and the like may be discharged in a Chapter 7 bankruptcy, the affected creditor’s right to enforce its lien against collateral pledged for a loan (such as the right of repossession) is generally unaffected by bankruptcy. To retain the collateral, the debtor may have to reaffirm the debt or redeem the collateral. These concepts will be discussed later.
The most commonly used form of bankruptcy, Chapter 7, provides honest debtors who have limited financial means with a fresh start by eliminating many of a debtor’s most common financial obligations through the discharge (which is generally granted at the end of the case). In return for the discharge, the debtor must turn over to the trustee certain nonexempt assets. These nonexempt assets are sold with the proceeds distributed to creditors according to priorities set forth in the Code. Generally, priority expenses of administering the estate, unpaid wages, domestic support obligations, and taxes are paid ahead of ordinary unsecured claims. If assets remain for distribution to unsecured creditors, those creditors who file formal proofs of claim within the time fixed by the court share proportionately in the remaining proceeds. As discussed below, property that is subject to an otherwise unavoidable lien is generally not administered by the trustee. Such property is covered by the contract between the parties and the rights and remedies available under state law.
In general, the bankruptcy estate consists of all property owned by the debtor or in which the debtor has an interest whether individually or as a co-owner with any other person. In a Chapter 13 case, this also includes post-filing income from all sources, including the income of a nonfiling spouse. The estate includes property the debtor acquires by gift, devise, inheritance, divorce settlements, and life insurance proceeds the right to which arises within 180 days after the filing of the case, and also includes property recovered by the trustee under certain Code provisions. The estate is reduced by exempt assets.The balance of any property remaining for administration by the trustee constitutes the final bankruptcy estate.
In general, bankruptcy proceedings under any Chapter involve:
There are relatively few limitations on who can file bankruptcy. The decision of whether to file, and under what Chapter, is based on each individual’s need for relief from debts, their ability to pay, and their capacity and willingness to undertake a procedure that will have long-term consequences on their financial life. A debt-counselor or attorney can help you consider alternatives to bankruptcy.
Bankruptcy is a uniform, federal court-supervised procedure to relieve individuals and businesses from debts, while protecting and preserving the rights of secured creditors and providing unsecured creditors with equal treatment of their claims.
There are four types of bankruptcy that individuals may select, depending on their particular financial circumstances. Most individuals file under Chapter 7 of the Bankruptcy Code (the Code), sometimes known as “straight” or “liquidation” bankruptcy. Chapter 11 is available to individuals, but generally is used by corporations to reorganize their business affairs. Chapter 12 is designed for use by farmers. Chapter 13, also referred to as a “wage-earner” or “debt-adjustment” plan, is available to individuals and unincorporated businesses that intend to use future income to pay some or all of one’s debts according to a plan designed by the individual (within certain statutory limitations) to meet his or her needs.
You’ll need a contract with a builder that covers what’s to be built, what happens if there are changes to plans, costs, performance standards (time for construction, warranties, and so on), and more. A contract describes all parties’ rights and obligations. Construction contract forms in Wisconsin are not standardized or state-approved as are the Offer to Purchase, buyer agency, and listing forms. The Wisconsin Builders Association has prepared a model home construction contract. Be sure the contract protects your interests and that you fully understand it. Your attorney can negotiate and review a construction contract on your behalf. If you’re buying a home that a builder is already building, you’ll most likely use the Offer to Purchase to address most of these issues, especially warranties, amenities, and time for completion.
You can hold title to property as an individual, with another person(s), or in the name of an entity, such as a trust, limited liability company, or corporation. If you’re married, Wisconsin’s Marital Property Act affects how you own property. The law presumes that all property owned by spouses is marital property, belonging to both of you equally, but you may have individual ownership, if you desire.
A lawyer can advise you on your options for holding title. (See also the State Bar’s pamphlet, Answering Your Legal Questions About Marital Property.)
Two or more unmarried people can own property together as tenants in common or joint tenants. It’s wise to have an attorney prepare an ownership agreement spelling out the parties’ rights and obligations in the property.
When you buy a home, you need to be sure the seller has good title to the property. That’s where title insurance comes in. It protects you against defects in the seller’s title.
The title insurance company checks various records and issues a title insurance commitment that gives information about the title. For instance, who owns the property? Are there liens (such as unpaid tax bills) the seller should pay off before selling? Are there any easements and restrictions on the property’s use? It is important to understand all of these matters, because they can seriously affect your use and enjoyment of the property.
The title insurance commitment is an important and complex legal document that requires legal expertise to understand. Simply receiving a title insurance commitment before the closing does not by itself mean that you are getting “clean title.” Ask your lawyer to review the title insurance commitment to be sure the title presents no problems that will surface to haunt you later.
Buyers usually obtain financing from a commercial lender, such as a bank, credit union, or other loan provider. The lender investigates the buyer’s finances and credit history to determine eligibility for a home mortgage. An attorney can help evaluate the various mortgage options and check mortgage documents. An attorney can help resolve problems with your application. There are special concerns when the financing is for new construction.
Another financing option is a land contract, in which the seller finances the buyer’s purchase of the property. This arrangement involves negotiations between the buyer and seller. Be sure you get sound legal advice to protect your interests.
An attorney can:
Most sales of a person’s primary residence are exempt from taxes on capital gains, that is, the difference between the sale price (including some costs of the sale), and your “basis” (what you paid for the home, some costs of the purchase, plus any capital improvements you made to the home). This is generally true as long as the gain is less than $250,000 (or $500,000 for a couple) and the owner has owned and lived in the property at least two out of the last five years. The timing of your sale can affect whether you will owe any capital gains tax, and how much you will owe. You can discuss details of taking advantage of this valuable exemption with your attorney. To calculate your gain, you should keep good records of the purchase and sale of the home, and all capital improvements made while you own it. Tax programs to stimulate home purchases in a down market also may be available. Consult with your attorney or financial advisor if you have questions.
Many of the processes described above apply in any real estate transaction, including the sale or purchase of vacant land and vacation properties. Buying or selling certain types of properties – such as a farm, lake property, condominium, cooperative, investment property, time-shares and so on – also may involve special legal considerations. Investment real estate is subject to capital gains tax; however, it’s possible to create legal arrangements to defer this tax. See an experienced real estate attorney for advice.
This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.
Other titles include: Arrest; Bankruptcy; Buying/Selling Residential Real Estate; Choosing a Process for Divorce; Custody and Placement; Durable Powers of Attorney; Divorce; Guardians Ad Litem in Family Court; Health Care; Hiring/Working with a Lawyer; Landlord/Tenant Law; Marital Property; Personal Injury; Probate; Revocable Living Trusts; Small Claims Court; Starting a Business; Traffic Accidents; Wills/Estate Planning.
9/2009. © State Bar of Wisconsin
A seller’s attorney can:
Again, if legal conflicts or questions arise at any point during the course of the sale, only your attorney can provide you legal advice.
You also can buy and sell a home without working with an agent. Then it’s even more critical to seek an attorney’s assistance in the buying and selling process.
This arrangement is what’s known as “for sale by owner,” or FSBO (pronounced “fizzbo”). By selling your house yourself, you save the commission you would have paid to a real estate agent. But count on investing more of your own time. You’ll need to analyze the market, decide on a price, advertise the house and host open houses, handle all negotiations with prospective buyers, and so on.
Buying a FSBO also is somewhat different than buying with a broker involved. The buyer will need to become familiar with area values to decide what price to offer for the home. It is wise to have a lawyer prepare the Offer to Purchase. The lawyer can suggest appropriate contingencies, and can guide you through the rest of the transaction.
It’s unwise to tackle a FSBO transaction without legal advice. An attorney can review Offers, write Counteroffers, and guide you through the many steps involved in a FSBO transaction.
Real estate agents are frequently involved in real estate transactions and work under various arrangements, including providing limited services for reduced fees. If you see an advertisement for a house for sale, the agent is working for the seller, as you’d expect, under a “listing” contract. That agent has professional obligations to look out for the seller’s interests.
In recent years, a new type of agent relationship has become increasingly popular – that is, the buyer’s agent. The buyer’s agent is professionally bound to represent only the buyer’s interests and is paid by the buyer. The agent can tell you information about the seller or the property that might be useful to you. And the agent won’t disclose information you prefer the seller not know about you.
Is a buyer required to work with a buyer’s agent? No. Many buyers work satisfactorily under the traditional agent arrangements.
Whether the agent is primarily the agent of the seller (under a listing contract) or of the buyer (under a buyer agency contract), the agent owes a duty of “fair dealing” to all parties. Part of that duty is to keep confidential anything that someone wants or would reasonably expect to be kept confidential.
If you decide to work with a real estate agent, have your attorney review the agency agreement before you sign it, to be sure the arrangement is exactly what you believe it to be.
When all contingencies are met and amendments signed, the transaction can close. The Offer provides the date when the closing will occur. At the closing, the buyer and seller must sign numerous, complex legal documents. It’s wise to have your attorney there to explain the documents and to answer your questions. Attorneys often spot potential problems that can be cleared before the closing and assist with unanticipated problems that can arise at the closing. After closing, the deed is recorded at the register of deeds office for the county in which the property is located. This puts the buyer’s ownership of the property on public record. Once the deed is recorded, it is returned to the buyer. The buyer also will receive his or her title insurance policy. Your attorney can review these documents for legal accuracy.
The Offer to Purchase states the price the buyer is willing to pay for the house, the date the sale will close, and other important terms of the transaction. There is a state-approved form for Offers used in nearly all home sales. It can be completed by a party to the transaction, a real estate agent, or an attorney. State-approved forms are revised periodically. There often are one or more attachments (or addendums), which add more terms to the Offer.
The Offer will usually include contingencies to protect the parties by setting conditions that must be met. Common contingencies include financing and professional house inspection. Depending on the transaction, the Offer might include other contingencies, such as septic and well inspections, land survey, sale of the buyer’s home, and occupancy by the seller after closing. The attorney can advise the buyer or seller about which contingencies are appropriate. By law, the seller must provide a condition report disclosing any known defects in the property, and a disclosure regarding lead-based paint.
The seller can respond to the buyer’s Offer by accepting it, rejecting it, or making a Counteroffer presenting different terms for the sale. The
Offer/Counteroffer process may go back and forth until both the buyer and seller are satisfied. When the buyer and seller sign the contract, it becomes a legally binding contract, subject to satisfying any contingencies.
If the inspection discloses significant defects in the property there may be further negotiations on repairs or credits. The lawyer can advise the buyer or seller about the inspection provisions that are best for the client. The lawyer also can prepare an amendment if the parties modify their purchase agreement due to the inspection, or for other reasons.
It’s critical that the contract be complete and legally enforceable. If your attorney didn’t write the Offer, it’s wise to at least have him or her review this document and any Counteroffers. If your attorney can’t review the Offer before you submit it to the seller, insert a contingency for attorney approval.
A living will is a separate legal document, not a part of your will. And, it’s not the same as a durable power of attorney for health care. The latter allows your agent to make health care decisions for you. A living will, on the other hand, allows you to state in writing your preferences about life-prolonging medical treatment.
In a living will, you can declare that you wish medical professionals to withhold or withdraw life-sustaining procedures or non-orally ingested food and water — if you are in an incurable condition, or you’re near death, or you’re in a persistent vegetative state.
Your living will takes effect only when you become incapacitated, cannot speak for yourself, and there’s no hope for your recovery.
Your durable power of attorney agent also can make these sorts of end-of-life health care decisions for you, if you grant that power. If you have both a living will and durable power of attorney for health care, the latter rules if there is any conflict between the two.
The current law regarding living wills went into effect Nov. 25, 1991. If your living will was written before then, you should have your attorney review it to be sure it still expresses your wishes.
For more information on durable power of attorney for health care and living wills, see the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Health Care.
This is one in a series of consumer information pamphlets sponsored by the State Bar of Wisconsin. This pamphlet, which is based on Wisconsin law, is issued to inform and not to advise. No person should ever apply or interpret any law without the aid of a trained expert who knows the facts, because the facts may change the application of the law.
Other titles include: Arrest; Bankruptcy; Buying/Selling Residential Real Estate; Choosing a Process for Divorce; Custody and Placement; Durable Powers of Attorney; Divorce; Guardians Ad Litem in Family Court; Health Care; Hiring/Working with a Lawyer; Landlord/Tenant Law; Marital Property; Personal Injury; Probate; Revocable Living Trusts; Small Claims Court; Starting a Business; Traffic Accidents; Wills/Estate Planning.
1/2011. © State Bar of Wisconsin
Yes, one person can serve as both. If you feel you need to name two different agents, be sure they can work together. This would avoid a situation, for instance, in which your agent for finances could interfere with health care decisions by refusing to pay certain medical bills.
This arrangement gives your agent the authority to make health care decisions for you when you’re unable to make them yourself. This is a heavy responsibility for anyone to assume. Be sure you discuss your health care preferences with your agent, so he or she knows what you’d want. This makes the agent’s job much less difficult during what may already be a stressful time.
To create a durable power of attorney for health care, you can use the standard state form. Or, an attorney can create an individualized document for you. Either way, a durable power of attorney must meet specific requirements for it to be valid.
This authorizes another person, called an agent, to act for you in financial matters. The agent’s rights to act on your behalf depend on what you say in your durable power of attorney document. These rights might include the authority to sign legal documents, pay bills, buy and sell real estate, and take other actions on your behalf. Choose a person you trust absolutely.
A durable power of attorney can take effect in one of two ways. If you wish, it can take effect immediately. Your power of attorney may provide that it becomes effective at a later date or if you become incapacitated. A doctor, a judge, or some other person may be named to determine whether you are incapacitated. The latter is called a “springing” power of attorney.
A durable power of attorney ends at your death. Your agent retains no further authority to handle your finances. If you want your agent to settle your financial affairs after you die, you need to name that person as your personal representative in your will.
Yes. A will would be important for several reasons. You may have property that never got transferred to your trust while you were alive. You would need a will to transfer that property to your trust after your death. Or your estate might receive money after your death. For instance, if your death was the result of an accident, your estate may receive wrongful death benefits. Again, you would need a will to transfer this money to the trust.
You also need a will in order to name a personal representative and a guardian for your minor children. That’s not part of setting up a living trust. A personal representative can take certain actions on behalf of your estate that a trustee cannot, such as pursuing a wrongful death claim.
You can create a living trust to control your property while you are alive. The trustee then would control your property after you die. Under this arrangement, you sign documents to give your property to the trust. As long as you’re living, the property usually is treated the same for tax purposes as if you still owned it.
An advantage of a living trust is that property can pass to heirs after you die without going through probate. A drawback is that buying, handling, or selling assets held in a living trust may be more cumbersome while you’re alive. Ask your attorney how a living trust would affect your property.
For more information, see the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Revocable Living Trusts.
You can use your will to create a trust upon your death. The trust holds your property for another person’s benefit. For example, a trust may provide an income for your spouse. Or it can hold property for your minor children until they become adults.
You name a trustee to oversee the trust. The trustee can be either a trusted individual (a friend, relative, or professional advisor) or a financial institution (a bank, brokerage firm, or trust company). The trustee is responsible for protecting the assets, paying out income earned, and terminating the trust as your will instructs.
To be valid in Wisconsin, the will must comply with the laws of one of the following: Wisconsin, or the place where you properly signed your will, or the place where you lived when you properly signed your will.
Be aware, however, that Wisconsin has a marital property law and a same-sex domestic partnership law. If your will is from a jurisdiction with no such laws, you should have an attorney review your will. That way you can assure it still achieves the results you intend.
Place your will where it’s safe from theft, fire, or other damage. A safe-deposit box is one possibility, although it may be difficult for your personal representative to access your safe-deposit box after your death. You also may deposit it with the register in probate for your county.
Be sure your personal representative knows where your will is. Some people also give a copy to their personal representative. You’d want to do this, for instance, if you include funeral preferences in your will. Usually the reading of a will doesn’t happen until after a funeral. So you’d want your personal representative to have a copy on hand, to be able to carry out your funeral wishes.
You have two options. You can simply write a new will, which automatically replaces an older one. Or you can add a supplement, called a codicil, to your existing will. For a codicil to be valid, it must satisfy the same legal requirements as those mentioned for a will.
A person can attempt to prove in court that:
Yes, if you comply with all the above-mentioned requirements to make your will valid. But if in creating your will, you encounter any questions or complexities you don’t understand, it’s a good idea to see your attorney. Remember, this document must spell out all the conditions for transferring your assets. And, if you have minor children, it names their guardian.
A will is an important document. You’ll want to be sure it correctly expresses your wishes and that it’s legally enforceable. A lawyer can give you advice about not only your will, but also other aspects of estate planning you might otherwise overlook. We’ll discuss some of those later.
To be valid, your will must be in writing, and you must date and sign it. At least two witnesses also must sign the will. They can do this after they watch you sign it. If they weren’t present then, you can state to them that the signature is yours, and then the witnesses can sign. The witnesses should not be beneficiaries named in the will or your heirs as designated by law.
These include:
If all your property falls into the above categories, and you have no minor children, you might think you have no need for a will. You may be right. On the other hand, a will may still be wise.
For example, you and your spouse, the other joint tenant, or your beneficiary could die at the same time or that person could die before you. A will would enable you to name alternate beneficiaries. Also, you could save on estate taxes, thus leaving more to your beneficiaries, by using a will to set up a trust.
In this case, the court appoints a personal representative who distributes your entire estate to your surviving spouse or registered domestic partner — unless you have children from outside your current marriage. In that case, your spouse or registered domestic partner retains half the marital property and receives half your individual property, with the rest of your estate split equally among all your children, from this marriage and outside it. (See also the State Bar of Wisconsin’s pamphlet, Answering Your Questions About Marital Property.)
If you have no spouse, registered domestic partner, or surviving children or descendants of children when you die, your estate goes to other surviving relatives. State law lists the order of inheritance as follows: parents, brothers and sisters, nieces and nephews, grandparents, and descendants of grandparents. The state school fund receives your assets if you leave no heirs closer than the descendants of your grandparents.
If you leave behind minor children and have named no guardian in a will, a court must choose a guardian. If a minor inherits money or property, it is likely the court will place it in a guardianship account. Ask yourself: Is that a decision you want someone to make for you?
Having a judge decide who will raise your children can be emotionally wrenching for other family members. Also, court-supervised guardianships entail extra costs. Avoid the upset and expense by naming a guardian in your will.
Finally, bear in mind that if you have no will, the court will appoint a personal representative to administer your estate. Having a will allows you to choose this person. Also, you can stipulate in your will that the personal representative need not post a surety bond, thus saving money for your estate.
If you have accumulated some assets, and you care who will receive those assets after you die, it’s time to write a will.
Anyone with minor children definitely should have a will. In it, you can name the person you want to raise your children, should something happen to you and your spouse. Discuss this carefully with the prospective guardian, to be sure he or she is up to the job. Also, name an alternate guardian in your will as a backup.
On the other hand, if you’re a young adult, have no children, and own few possessions, you probably don’t need a will yet. The state would distribute your possessions to your parents. But if you’d rather leave your car to your girlfriend, or your prized Spider Man comic book collection to a favorite nephew, then a simple will is a good idea.
A will is a written document that allows you to designate: