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Navigating Trusts for Retirees in Wisconsin: A Comprehensive Guide


When planning for the future, many people contemplate different financial tools and strategies to ensure their assets are well-managed and their loved ones are taken care of. In the realm of estate planning, trusts are one such powerful tool that offers numerous benefits, especially for retirees. This article will take a deep dive into the concept of trusts and their importance for retirees in Wisconsin.

Understanding the Concept of Trusts

A trust is a legal arrangement that allows one party (the trustor) to give another party (the trustee) the right to manage specific assets for the benefit of a third party (the beneficiaries). Trusts can be designed in various ways and can specify exactly how and when the assets pass to the beneficiaries.

There are numerous types of trusts, with revocable and irrevocable living trusts being the most common. Revocable trusts can be modified or cancelled by the trustor at any point during their lifetime, providing a great deal of flexibility. On the other hand, an irrevocable trust cannot be modified without the consent of the trustee and the beneficiaries, providing robust asset protection.

Importance of Trusts for Retirees

For retirees, trusts are a way to manage and protect assets during their golden years and beyond. Trusts offer a variety of benefits, including potential tax benefits, protection from creditors, and control over how and when assets are distributed to beneficiaries. Moreover, with a trust in place, retirees can also avoid probate—a time-consuming and expensive legal process to determine the validity of a will.

In the context of estate planning, trusts can help retirees ensure their loved ones are financially secure. By outlining specific terms and conditions in the trust document, retirees can dictate how their assets should be used—for instance, specifying that trust funds should only be used for educational purposes or health care expenses.

Additionally, for retirees with significant assets or complex family situations, trusts can provide a level of control and protection not typically available through other estate planning tools. For example, a trust can provide for a disabled loved one without jeopardizing their eligibility for government benefits, or protect assets from the potential negative impact of a beneficiary's divorce or bankruptcy.

Wisconsin-specific Regulations for Trusts

Like other legal matters, the laws regulating trusts vary from state to state. In Wisconsin, a state-specific regulation called the Wisconsin Trust Code governs the creation and administration of trusts. This law, which aligns closely with the Uniform Trust Code adopted in many other states, provides detailed provisions regarding the duties of trustees, the rights of beneficiaries, and the modification and termination of trusts, among other things.

Notably, Wisconsin law allows for the creation of a unique type of trust known as a marital property trust. This can be especially beneficial for married couples, as it allows for the division of assets between spouses, which can result in tax savings.

Wisconsin also acknowledges self-settled asset protection trusts, allowing individuals to create a trust for their benefit while protecting the trust's assets from creditors. However, these trusts must meet specific legal requirements to ensure valid protection.

It's worth noting that these Wisconsin-specific regulations can be complex, and individuals considering a trust should consult with a knowledgeable Wisconsin attorney to ensure their trust meets all legal requirements and serves their intended purposes.

Understanding Trusts

Embarking on the journey of estate planning, the concept of trusts frequently emerges as an important topic. To fully appreciate their potential benefits and understand their possible drawbacks, it is necessary to explore the definition, basic structure, and various types of trusts.

Definition of Trusts

A trust is a fiduciary relationship in which one party, known as a settlor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. Trusts are established to provide legal protection for the settlor's assets, to ensure that those assets are distributed according to the wishes of the settlor, and to save time, reduce paperwork and, in some cases, avoid or reduce inheritance or estate taxes.

The Basic Structure of a Trust: Settlor, Trustee, and Beneficiary

The fundamental components of a trust are the settlor, the trustee, and the beneficiary. Each has a distinct role:

  1. Settlor (or Trustor): This is the individual who creates the trust, determining its structure and the rules under which it will operate. The settlor places assets into the trust.

  2. Trustee: The trustee is responsible for managing the assets that are in the trust. This management must be done in the best interests of the beneficiary. A trustee could be an individual, a company, or a public body.

  3. Beneficiary: This is the individual or group of individuals for whose benefit the trust has been created. The beneficiary will receive the income from the trust or the assets within it, depending on the terms set out by the settlor.

Types of Trusts: Revocable and Irrevocable

There are two primary types of trusts: revocable and irrevocable.

Revocable Trusts

A revocable trust, also known as a living trust, is a type of trust that can be altered, changed, modified, or revoked entirely by the settlor at any time. If the settlor becomes incapacitated, the revocable trust can be controlled by a successor trustee. Upon the settlor's death, the trust assets transfer directly to the beneficiaries without needing to go through probate.

Irrevocable Trusts

On the contrary, an irrevocable trust is one that cannot be altered, changed, modified, or revoked after its creation without the consent of the trustee and the beneficiary or a court order. Because the settlor gives up control over the assets placed in an irrevocable trust, these types of trusts have tax advantages that revocable trusts do not.

Benefits and Drawbacks of Revocable Trusts and Irrevocable Trusts

Each type of trust—revocable and irrevocable—carries unique benefits and potential drawbacks.

Benefits and Drawbacks of Revocable Trusts


  • Flexibility: The main advantage of a revocable trust is the ability to retain control over the assets and to modify the trust terms as the settlor's situation or wishes change.

  • Avoiding Probate: Assets held in a revocable trust bypass probate, allowing a quicker distribution of assets to beneficiaries.


  • Limited Asset Protection: Revocable trusts offer little protection against creditors. If a settlor is sued, the assets in the trust could potentially be claimed by creditors.

  • Tax Liability: For tax purposes, revocable trusts are considered part of the settlor's estate, which may subject the estate to higher estate taxes.

Benefits and Drawbacks of Irrevocable Trusts


  • Asset Protection: Once assets are transferred to an irrevocable trust, they are no longer owned by the settlor, providing a high level of asset protection against creditors and lawsuits.

  • Tax Benefits: Irrevocable trusts can provide significant tax advantages. Since the assets are no longer part of the settlor's estate, they are not subject to estate taxes.


  • Lack of Control: Once the irrevocable trust agreement is made, it cannot be changed or terminated without the consent of the trustee and the beneficiary.

  • Potential for Conflict: If the beneficiaries do not agree with the terms of the trust or how the trustee is managing the assets, it can lead to conflict and potential litigation.

Understanding the features, advantages, and drawbacks of revocable and irrevocable trusts is a crucial part of creating an effective estate plan. As such, anyone considering establishing a trust should seek the counsel of an experienced Wisconsin attorney.

Why Trusts are Important for Retirees

Retirement is a significant life phase that often sparks a closer look at personal finances and estate planning. For many retirees, trusts are an essential component of that planning. Trusts provide an efficient and flexible way to manage, protect, and pass on assets. The reasons for this include asset protection, estate planning, avoiding probate, and potential tax benefits.

Asset Protection

For retirees, one of the primary benefits of setting up a trust is asset protection. A trust can shield your assets from various risks, such as lawsuits or creditors. In particular, irrevocable trusts, once established, remove your assets from your estate. This means that these assets are generally beyond the reach of creditors, providing you with a level of financial security in retirement.

For instance, if you are a retired doctor with concerns about potential malpractice claims, or if you simply want to protect your assets for your heirs, an irrevocable trust can provide that protection.

Estate Planning

Trusts are an invaluable tool in estate planning. For retirees, ensuring that your assets are distributed according to your wishes after your death is crucial. A trust gives you control over this process. You can specify who your beneficiaries will be, what assets they will receive, when they will receive them, and even under what conditions.

For example, you could set up a trust to ensure that your grandchildren's inheritance is used for their education. Or you could stipulate that your children will receive their inheritance once they reach a certain age, or when they marry or buy a house. The flexibility of trusts makes them an essential estate planning tool for many retirees.

Avoidance of Probate

Probate is the legal process of administering a deceased person's estate. It can be a long, expensive, and public process. Trusts, however, allow retirees to avoid probate because the assets in a trust are not part of your probate estate.

By avoiding probate, your beneficiaries can receive assets more quickly, privacy can be maintained, and probate costs can be avoided. Given that probate can sometimes take years to conclude, and the fact that probate fees in Wisconsin can be substantial, the ability to bypass this process is a significant advantage of trusts for retirees.

Tax Benefits

Finally, trusts can provide certain tax benefits. An irrevocable trust, for instance, removes assets from your estate, potentially reducing the amount of estate tax due upon your death. Also, in some cases, trusts can help reduce income tax obligations.

It's important to note that tax laws are complex and change frequently, so it's essential to consult with a knowledgeable attorney or tax advisor to understand the potential tax implications of setting up a trust.

In conclusion, trusts offer significant benefits for retirees in Wisconsin. However, setting up the right trust requires careful planning and expert advice. It's important to consult with an experienced attorney who understands your goals and the intricacies of Wisconsin trust law. Heritage Law Office in Wisconsin offers comprehensive legal advice and guidance for retirees considering setting up a trust. For more information, please contact us at 414-253-8500.

Wisconsin Specifics on Trusts for Retirees

When establishing a trust in Wisconsin, understanding the nuances of state-specific laws is essential. From the Wisconsin Trust Code (WTC) to specific advantages offered by Wisconsin-based trusts and special provisions applicable to retirees, a detailed understanding will ensure optimal benefit.

Wisconsin Trust Code (WTC) and its impact on trusts

The Wisconsin Trust Code (WTC), which became effective on July 1, 2014, replaced and modernized the existing trust laws, bringing about significant changes to the practice of trust law in Wisconsin. The WTC enhances the rights of trust beneficiaries, provides more flexibility to settlors, and offers clearer guidelines for trustees in the administration of trusts.

It allows for the modification of irrevocable trusts under certain circumstances, even without court intervention, which can be beneficial for retirees who need to change their trust structure due to altered circumstances. The WTC also provides for non-judicial settlement agreements, which allows parties to a trust to enter into a binding agreement concerning trust interpretation or administration without court approval, potentially saving time and resources.

The advantages of Wisconsin-based trusts

Trusts established in Wisconsin offer various advantages. One notable benefit is that Wisconsin law allows for the creation of a dynasty trust. Dynasty trusts can continue for multiple generations, providing long-term financial stability and asset protection for future descendants.

Also, Wisconsin law provides excellent protection for assets held in certain types of trusts against creditors, adding an extra layer of financial security for retirees. Additionally, the WTC's allowance for directed trusts, where investment and distribution functions can be divided among different trustees, offers flexibility that can be appealing to retirees with complex estate planning needs.

Special laws or provisions applicable to retirees

Wisconsin also offers unique provisions that are particularly beneficial for retirees. For example, Wisconsin law allows for the creation of Medicaid Asset Protection Trusts. These trusts can provide retirees an opportunity to preserve assets should they require long-term care while maintaining Medicaid eligibility.

Wisconsin law also allows for the establishment of special needs trusts, which can ensure a disabled beneficiary doesn't lose eligibility for public assistance benefits. These types of trusts can be particularly useful for retirees who have a disabled child or grandchild.

Irrevocable Trusts: A Deep Dive

As a retiree planning for the future, understanding different types of trusts is crucial, especially irrevocable trusts. These legal structures offer unique benefits, particularly in areas of estate tax reduction, asset protection, and long-term care planning.

Detailed Explanation of Irrevocable Trusts

An irrevocable trust is a type of trust where the terms can't be modified, amended or terminated without the permission of the trust's beneficiary or beneficiaries. Once the trust creator, or settlor, places assets into an irrevocable trust, they relinquish control over those assets. This means that the assets within the trust are no longer legally owned by the settlor; instead, they are owned by the trust.

One key characteristic of irrevocable trusts is that they are separate legal entities. This is beneficial because the trust's assets aren't included in the settlor's estate for estate tax purposes. Additionally, since the settlor no longer owns the assets, they are typically protected from creditors.

When It Makes Sense for Retirees to Consider Irrevocable Trusts

Irrevocable trusts can be an effective tool for retirees in various situations. If a retiree is concerned about potential estate taxes, an irrevocable trust can help minimize or eliminate these taxes, as assets placed in the trust are not included in the settlor's taxable estate.

Additionally, if asset protection is a significant concern, irrevocable trusts can be a smart choice. Since assets transferred into an irrevocable trust aren't legally owned by the settlor, they are generally shielded from creditors. This can be particularly valuable for retirees who are concerned about potential future creditors or lawsuits.

Irrevocable trusts also play a crucial role in long-term care planning. With the high cost of long-term care, many retirees are concerned about depleting their assets should they require such care in the future. Assets placed in an irrevocable trust are not countable assets for purposes of Medicaid eligibility, so establishing an irrevocable trust can be a strategic move for retirees who anticipate needing Medicaid to assist with long-term care costs.


Retirement planning is more than just planning for your financial future—it's about securing peace of mind for you and your loved ones. Trusts can be an effective tool to achieve this, particularly for Wisconsin retirees.

In this complex legal landscape, having an experienced partner like Heritage Law Office can make a significant difference. We're here to guide you through every step of the trust planning process, from initial consultation to ongoing trust management.

We encourage all Wisconsin retirees to explore their options and consider how a trust could benefit their financial and estate plans. We're here to answer your questions and provide the guidance you need. Contact Heritage Law Office today—your future is worth planning for.

Frequently Asked Questions (FAQs)

1. What is a trust and why is it beneficial for retirees?

A trust is a legal arrangement where a person, known as the 'settlor', transfers assets to a trustee. The trustee then manages these assets for the benefit of the beneficiaries. Trusts can provide many advantages for retirees, including asset protection, estate planning, avoidance of probate, and potential tax benefits.

2. What is the difference between revocable and irrevocable trusts?

A revocable trust, also known as a living trust, can be altered or canceled by the settlor during their lifetime. However, an irrevocable trust, once established, cannot be changed or terminated without the permission of the beneficiary. The choice between a revocable and irrevocable trust depends on individual circumstances and goals, such as asset protection and tax planning.

3. How does the Wisconsin Trust Code (WTC) impact trusts?

The Wisconsin Trust Code (WTC) is a set of laws that govern the creation and administration of trusts in Wisconsin. The WTC offers several benefits and protections for those creating trusts, including flexible provisions that allow for the customization of trusts to fit individual needs and circumstances.

4. Why should I consider Heritage Law Office for my trust planning needs?

Heritage Law Office is a reputable law firm with a wealth of experience in trust planning. Our attorneys are well-versed in the intricacies of the Wisconsin Trust Code and are committed to helping clients make informed decisions that align with their future goals. We offer a comprehensive suite of trust planning services tailored to each client's unique needs.

5. How can I start the process of creating a trust?

To begin the process of creating a trust, you can contact Heritage Law Office at 414-253-8500 or send us a message through our website. Our experienced attorneys are ready to provide you with a consultation to understand your specific needs and advise you on the best options for your circumstances.

Contact an Irrevocable Trust Attorney in Wisconsin

If you're a retiree considering establishing a trust, don't hesitate to reach out to us at Heritage Law Office. We'd be happy to provide a consultation to discuss your needs and how we can help. Call us at 414-253-8500 or send us a message for a free consultation.

Contact Us Today

For a comprehensive plan that will meet your needs or the needs of a loved one, contact us today. Located in Downtown Milwaukee, we serve Milwaukee County, surrounding communities, and to clients across Wisconsin, Minnesota, Illinois, and California.