Understanding Revocable Living Trusts in Wisconsin: What They Are and How They Work
If you’re beginning to plan for your future or help aging loved ones do the same, you’ve likely come across the term revocable living trust. But what exactly is it, and how does it operate—especially under Wisconsin law?
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At Underwood Legal, LLC, we help individuals and families across the greater Madison area and throughout Wisconsin understand their estate planning options. One of the most popular and powerful estate planning tools we use is the revocable living trust. This post explains what a revocable living trust is, how it functions, and why it might be the right choice for you.
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What Is a Revocable Living Trust?
A revocable living trust (sometimes just called a “living trust”) is a legal document that creates a trust during your lifetime. You transfer ownership of your assets—such as your home, bank accounts, and investments—into the trust, and retain full control over them while you are alive.
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The term "revocable" means you can change the trust at any time: amend it, remove assets, add new ones, or even revoke it entirely. This flexibility makes revocable living trusts appealing for individuals who want both control and peace of mind.
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Key Roles in a Living Trust
There are typically three roles in a revocable living trust:
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Trustmaker (aka Grantor or Settlor): The person who creates the trust (also known as the trustor or settlor).
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Trustee: The person or institution that manages the trust. In most cases, you will name yourself as the initial trustee.
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Beneficiary: The person(s) who benefit from the trust. While you’re alive, you are also the primary beneficiary.
You also name a successor trustee, who will step in to manage or distribute your trust assets if you become incapacitated or pass away.
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How a Revocable Living Trust Works in Wisconsin
Wisconsin is one of several community property states, and its laws have unique implications for estate planning. However, revocable living trusts are fully recognized and widely used here.
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1. Avoiding Probate
Perhaps the most well-known advantage of a revocable living trust is that it allows your estate to avoid probate. Probate is the court-supervised process of distributing your assets after you pass. In Wisconsin, probate can be time-consuming, expensive, and public.
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If you place your assets into a trust during your lifetime, the trust—not you individually—legally owns them. After you pass, your successor trustee can distribute the assets directly to your named beneficiaries without court involvement.
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2. Planning for Incapacity
If you become mentally or physically incapacitated, your successor trustee can step in and manage the trust assets for your benefit—without the need for a court-ordered guardianship or conservatorship. This can provide a seamless transition of control and help ensure your bills are paid and affairs managed.
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3. Flexibility and Control
While you’re alive and well, you maintain full control over all trust assets. You can:​
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Sell or refinance your home
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Move funds in and out of accounts
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Update beneficiaries
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Amend the trust at any time
This flexibility makes it a great option for people who want to start planning but aren’t ready to give up control.
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Common Assets to Place in a Wisconsin Living Trust
Not all assets need to go into your trust, but many should. Common assets to consider funding into your trust include:
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Real estate (Wisconsin or out-of-state)
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Checking and savings accounts
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Non-retirement investment accounts
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Business interests
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Personal property
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Life insurance (as beneficiary)
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Vehicles (in some cases)
Note: Retirement accounts like IRAs and 401(k)s should not be retitled in the name of the trust, but you can name your trust as a contingent beneficiary in certain circumstances.
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What Happens After Death?
When you pass away, your successor trustee follows the instructions you laid out in your trust document. This usually includes:
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Paying final expenses and taxes
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Notifying beneficiaries
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Distributing assets to beneficiaries
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Continuing to manage assets for minor or special needs beneficiaries, if needed
In most cases, your loved ones won’t need to go through probate, saving them time, money, and stress.
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Why a Revocable Living Trust May Be Right for You
Here are some reasons our Wisconsin clients choose a living trust:
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You want to avoid probate for your estate and make things easier for your family
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You own real estate in more than one state
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You want to plan for potential incapacity
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You want to provide for minor children, individuals with special needs, or loved ones with poor financial habits
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You want your estate to be handled privately rather than through the public court process
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Limitations of a Revocable Living Trust
No estate planning tool is perfect. A revocable living trust:
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Does not protect assets from creditors or nursing home costs (unlike certain irrevocable trusts)
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Requires effort to "fund" the trust—i.e., transferring assets into it
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Still requires a pour-over will to catch any assets not titled in the trust’s name
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Setting Up a Revocable Living Trust in Wisconsin
Setting up a trust properly requires more than just filling out a form. At Underwood Legal, we:
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Draft a custom revocable living trust to reflect your wishes
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Help you retitle your real estate and other key assets
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Prepare a pour-over will, powers of attorney, and health care directives
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Guide you through the funding process
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Coordinate with your financial advisors and tax professionals
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Final Thoughts
A revocable living trust can be a foundational part of a well-thought-out estate plan. Whether you're just beginning your planning journey or updating an old plan, a trust may help you preserve your legacy and protect your loved ones.
At Underwood Legal, LLC, we work with individuals and families across Madison, Monona, Verona, Greater Dane County, and throughout Wisconsin to create plans tailored to their needs. If you're ready to explore whether a revocable living trust is right for you, we’re here to help.