I’m a lawyer who likes to avoid court whenever possible. I also like to have my clients avoid court whenever possible. I especially like to have my clients avoid court when they’re grieving, particularly over the loss of a spouse.

Normally, it’s easy to avoid the lengthy process of probate when the first spouse passes away. Most assets are owned jointly, so they’ll automatically stay with the survivor. Other assets, like life insurance and retirement accounts, have beneficiary designations that move the proceeds to the surviving spouse relatively quickly.

I have, however, seen my fair share of instances where a current estate plan would leave a surviving spouse having to spend the next year or so in probate court, which is one of the last things I would wish upon a grieving widow or widower.

Here are three common trip-ups I sometimes come across that would lead to a probate after the death of a first spouse.

Separate bank accounts. The vast majority of bank accounts I see are jointly owned by the two spouses. However, it’s not all too uncommon for a couple to say to me, “This is my checking account, and this is her checking account.” I see this more often in second marriages, but it does sometimes appear even in first marriages.

Here’s the problem: if the account of a recently deceased spouse has more than $50,000 in it at the time of his/her death, there could be a big problem for the surviving spouse. Banks allow you to put Payable On Death (POD) or Transfer On Death (TOD) designations on accounts, which would move the funds to the surviving spouse (presumably) upon death. But in my experience, people often forget to complete those designation forms for basic bank accounts.

How to fix this? The easiest way is to complete a POD or TOD beneficiary designation form and put your spouse as the beneficiary, of course. Failing that, I recommend that married couples have a marital property agreement that contains what are known as “Washington Will” provisions. These allow such assets to be transferred to the surviving spouse without probate, even if the POD or TOD was never filled out.

I am a big backer of trusts, of course. But if the couple really wishes to maintain separate accounts, then I wouldn’t recommend the use of a joint trust in this case.

Real estate. Residences are almost invariably jointly owned by both spouses. The same can usually be said for second properties purchased during the marriage. There are plenty of instances, however, when one spouse brings full or partial ownership of a piece of real estate into the marriage, like a family farm, hunting land, or family cabin. Often too are instances when these interests in property are inherited by or gifted to one of the spouses during the marriage.

So, what happens when the spouse who owns that interest in property dies? Unfortunately, if that interest in the land amounts to over $50,000 in value and if the surviving spouse’s name is not also listed on the deed with a survivorship interest, there could be a probate.

How to fix this? If the interest owned by one spouse is for the entirety of the piece of real estate, then it should be deeded over to both spouses as joint property by way of a simple quit claim deed.

Things can get tougher when the spouse only owns a portion of the parcel, perhaps with his or her siblings. You cannot create a joint tenancy over only a part of a parcel, but there are still three avenues you can take.

First of all, a marital property agreement with “Washington Will” provisions will move the interest to the surviving spouse without probate (just like it would for bank accounts noted above).

The spouse owning the interest can also record a TOD deed that would transfer the interest to the surviving spouse upon his or her death. This works much like having a TOD for a bank account.

My personal preference, however, would be to establish a joint trust and transfer the interest into that trust. This ensures the quickest transfer of control upon the death of the first spouse. There would be no extra filing or any amount of waiting for the surviving spouse at all.

LLC business interests. Here’s the dangdest thing about LLCs: you can co-own an LLC with your spouse, but you cannot jointly own an LLC with your spouse. That distinction is very important when it comes to what happens to the LLC after one spouse passes on. Without a right of survivorship, the LLC interest owned by the deceased spouse must move over to the surviving spouse by some other method.

Unfortunately, beneficiary designations are off the table when it comes too LLC interests, as least in Wisconsin. Wisconsin law does not allow for a TOD to be established in an LLC’s operating agreement. The agreement can put restrictions on who can take ownership after a co-owner passes, and can establish automatic buyback provisions for interest of a deceased co-owner, but as far as actually transferring the interest after the death of a co-owner, that has to be done by some other method.

Again, a marital property agreement with “Washington Will” provisions will do the trick, but there might yet be some headaches, which I will explain below.

Here is an instance when I would absolutely recommend a joint trust. The couple can transfer the LLC interest into the trust, and then there’s nothing to do after the death of the first spouse because the owner (the trust) is still “alive”! All control immediately transfers to the surviving spouse without any other filing or fees.

A note about “Washington Wills.” I absolutely believe that every couple should take full advantage of Wisconsin’s marital property laws which allow for the use of a marital property agreement to transfer assets after the death of either spouse. It’s a great backup play to keep the estate out of probate.

THAT SAID, while the estate will stay out of a full probate, it might not stay out of court altogether. The probate court will be the entity that actually orders the transfer of the asset to the surviving spouse, but not before an inventory (everything subject to the “Washington Will” and its value) is filed and an inventory fee (0.2% of the total value) is paid. The process does not take nearly as long as a full probate and the costs are much cheaper, but one should not believe that utilizing a marital property agreement as the primary means of keeping assets with the surviving spouse will be the quickest and easiest method. Beneficiary designations and trusts are preferable in that regard.

To learn more about basic estate planning or to schedule your free initial appointment, contact me at (920) 221-0320 or By Email.