Wisconsin residents who are creating estate plans should make sure that their beneficiaries do not have issues with creditors. Otherwise, those creditors could seize their inheritances. In one case, a woman left her house to her three sons. However, one of them had a child support judgment that prevented him from being able to take possession.
One duty of an executor is to perform a search for any child support judgments. Taxes that the estate owes is the only priority over this type of lien. Therefore, this lien must be paid out of a beneficiary’s inheritance. If there is anything left over, that remaining amount still goes to the beneficiary.
In the aforementioned case where the inheritance is a home instead of a liquid asset, there are two main choices. The other two brothers could loan the third brother the money to pay the child support and then take the balance in ownership of the house. However, if they are unable or unwilling to do this, the executor might need to force the sale of the home. If an estate holder knows or anticipates that one individual may have issues with creditors, they may want to talk to an attorney about a trust or other solutions to protect the inheritance.
This is one example of how creating an estate plan might be less straightforward than a person initially realizes. Another issue is that a beneficiary might be irresponsible with money, or the testator might be concerned that a beneficiary will lose part of an inheritance in a divorce. An experienced attorney could address all these issues.