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Marital Property Agreements for Estate Planning
Wisconsin Statutes permit Marital Property Agreements to perform a variety of functions. This can include classification of assets, such as individual property, marital property, survivorship property, and the like. A Marital Property Agreement can also be used as preplanning for division of assets, in the event of a divorce or separation.
However, Marital Property Agreements can also be used as Estate Planning devices. This can be very simple, such as provisions that direct that all assets pass on to the surviving spouse, in the event of one death, and then to the children in equal shares or some other formula upon the death of the second spouse. They can be more elaborate, such as in the case of blended marriages, where they can provide for certain distribution to children of one spouse, and then different distributions to the children of the other spouse. The Marital Property Agreement can include provisions that permit these transfers to occur without the need of going through probate, and without the need of wills; however special language must be included in the Marital Property Agreement to accomplish this. Not every Marital Property Agreement will do this automatically. Thus, in some cases the Marital Property Agreement can serve as a “will substitute” which is sometimes called a “Washington Will,” as these agreements originally were approved in the State of Washington.
Do you need both a Marital Property Agreement and a Will? Not always. However, many people may have both. If you do have both, the way they interact is that the Marital Property Agreement is more like a form of ownership of property, designating who will be subsequent or future owners of that property. The Will is more like instructions to the Probate Court of how to transfer property where there are no beneficiary designations. In that sense, the Marital Property Agreement will typically control or “trump” the Will. The Will can be a convenient safety net in case there are some assets that, for whatever reason, do not pass according to the Marital Property Agreement.
The Marital Property Agreement basically requires both spouses to agree in order to make any changes or alterations. However, some agreements will specifically permit a surviving spouse to alter the Marital Property Agreement, after the death of the first spouse.
If you use your Marital Property Agreement for estate planning purposes, it is important to be sure you keep the original, in a location where it can be later found and recorded if necessary. Or, some people choose to pre-record them, so it is on file; others prefer not to do that in the event of changes or amendments.
If you have any questions, please contact our office at 715-835-6196.