Estate Planning and Probate Quiz

There are many common misconceptions about estate planning and probate law. Take this quiz to see how much you know about these issues. Are you correctly planning for your family’s future?  The answers are below.

Questions:

  1. True or False: Having a Will is the easiest way to avoid probate after your death.
  2. True or False: Your heirs won’t have to pay any estate taxes after your death.
  3. True or False: I will have to pay gift taxes on any gift I give someone if it’s higher than the $15,000 annual exemption.
  4. True or False: I can create my own Will without an attorney or witnesses, as long as it’s handwritten and I sign it.
  5. True or False: A certified copy of a Will is just as valid as the original.
  6. True or False: You can keep your house out of probate after your death simply by filing a Transfer on Death Deed with the Register of Deeds.
  7. True or False: Your Will is the best place to designate your wishes for your funeral, burial, or cremation.
  8. True or False: A Will is the only legal document in which you can officially nominate a Guardian for your minor children, in case both you and your spouse pass away.
  9. True or False: After a family member’s death, I can use a Durable Financial Power of Attorney to pay their remaining bills for them and close out their bank accounts.
  10. True or False: A bank safe deposit box is always the best place to store your original Will.

Answers:

  1. False! Having a Will does not avoid Probate. Probate is generally necessary if there is over $50,000 of probate assets after your death, regardless of whether you had a Will or not.
  2. True! For a single person, the first $11.2 million dollars of assets is exempt from Federal estate taxes. This is doubled from recent years. There is currently no Wisconsin estate tax.
  3. False! If you give a gift higher than the annual exemption, you do have to file a Federal Gift Tax Return. However, you won’t have to pay taxes on it; that amount simply gets subtracted from your lifetime gift/estate exemption that is currently $11.2 million dollars.
  4. False! An unwitnessed handwritten Will is called a “holographic Will”. However, it’s not valid in Wisconsin. All Wills have to be signed in front of two witnesses.
  5. False! With few exceptions, the original Will must be located after a person’s death. A copy will not be valid. Keep your original Will in a safe place.
  6. True! A Transfer on Death Deed simply costs $30 to record with the Register of Deeds. After your death, the real estate automatically transfers to the recipient(s), without having to go through probate.
  7. False! Directives for funerals or burials are not enforceable in a Will. And as a practical matter, Wills often aren’t located or read until after the funeral has already taken place.
  8. True! If you have minor children, it is particularly important that you have a Will, so that you can nominate a Guardian for them.
  9. False! By definition, Powers of Attorney expire at the moment of death. You cannot use a Financial Power of Attorney for any purpose after the person has passed away.
  10. False! Storing a Will in a bank safe deposit box can often cause a lot of problems after your death, as it can be surprisingly difficult for surviving family members to access the box. You should only store a Will there if you have specifically made arrangements to give at least one family member a key and legal access to the box.