In Wisconsin, only probate property—property owned by the decedent that does not pass automatically by operation of law or by contract—is subject to probate administration. Generally, this includes real estate titled solely in the decedent’s name, such as a house owned by the decedent alone with no survivorship designation or transfer-on-death (TOD) deed, as well as personal property owned solely by the decedent. Financial assets without beneficiary designations also fall into this category, including bank accounts with no payable-on-death (POD) beneficiary, vehicles titled only in the decedent’s name, and stocks, bonds, or brokerage accounts without TOD registration. Household furnishings, jewelry, collectibles, and other tangible personal property are included as well. The decedent’s interest in tenancy in common property is probate property because, unlike joint tenancy, a tenant in common’s ownership interest does not pass automatically to the co-owner and therefore becomes part of the probate estate. Business interests can also be subject to probate, such as sole proprietorship assets or membership interests in an LLC or partnership interests that do not pass automatically under a governing agreement. Finally, property payable to the estate and claims or causes of action belonging to the decedent, as well as assets without a designated beneficiary (for example, retirement accounts or life insurance proceeds with no surviving beneficiary or payable to the estate), must be administered in probate.
By contrast, various assets pass outside probate. These “nonprobate” assets typically include joint tenancy property with right of survivorship and marital property with right of survivorship, both of which transfer automatically to the surviving owner. Life insurance payable to a named beneficiary and retirement accounts (IRAs, 401(k)s, etc.) with designated beneficiaries also pass outside probate. So do POD bank accounts, TOD securities and brokerage accounts, TOD deeds for real estate, assets held in a revocable living trust, and property that passes by beneficiary designation or contract. The Wisconsin Probate Code acknowledges that probate administration applies to the decedent’s probate estate while many assets transfer by operation of law. Relevant statutes include Wisconsin Statutes Chapter 851 (Definitions) and Chapter 856 (Transfer of Property).
If you would like to discuss this matter more thoroughly, please reach out to our Madison Wisconsin Estate Planning attorneys. We are here to help!