How to Inherit Bank Accounts in Wisconsin

Wisconsin's inheritance laws establish specific procedures for transferring bank accounts after someone passes away.

Understanding these processes helps beneficiaries handle the transfer efficiently while meeting all legal requirements.

Types of Inheritable Bank Accounts

Individual Accounts

Individual accounts solely owned by the deceased require formal probate proceedings if the total value exceeds $50,000.

These accounts typically freeze upon death until an executor or administrator is appointed by the court.

Joint Accounts

Joint accounts automatically pass to the surviving owner without probate.

The surviving owner maintains full access and control of the funds, though they should still maintain documentation of the deceased's passing for tax purposes.

Payable on Death (POD) Accounts

POD accounts transfer directly to named beneficiaries upon presentation of the death certificate and valid identification.

These accounts bypass probate regardless of their value, offering a straightforward inheritance process.

Wisconsin Probate Requirements

Small Estate Procedures

Estates valued under $50,000 qualify for simplified probate through Wisconsin's Transfer by Affidavit process.

Beneficiaries can claim bank accounts using form PR-1831, saving time and legal expenses.

Standard Probate Process

For estates exceeding $50,000, formal probate becomes necessary. The process includes:

• Filing a petition with the county probate court
• Appointing a personal representative
• Notifying creditors and settling debts
• Distributing assets according to the will or state law
• Final accounting and court approval

Tax Implications

Wisconsin Inheritance Tax

Wisconsin does not impose an inheritance tax on bank accounts or other inherited assets. Beneficiaries receive the full amount without state-level taxation.

Federal Estate Tax

Federal estate tax applies only to estates exceeding $13.61 million (as of 2024).

Most inherited bank accounts fall well below this threshold and incur no federal estate tax.

Income Tax Considerations

Interest earned on inherited accounts after the date of death becomes taxable income for beneficiaries.

The deceased's final tax return must include interest earned before death.

Transfer Procedures by Account Type

Checking and Savings Accounts

1. Obtain multiple copies of the death certificate
2. Gather personal identification and proof of executorship
3. Contact each bank directly
4. Complete necessary transfer forms
5. Establish new accounts if needed

Certificates of Deposit (CDs)

Early withdrawal penalties typically waive upon death. Beneficiaries can:

• Maintain the CD until maturity
• Cash out immediately without penalty
• Transfer the CD to their name maintaining the original terms

Money Market Accounts

Similar to standard accounts, but may require:

• Additional documentation for business-related accounts
• Special handling for investment components
• Coordination with financial advisors

Common Challenges and Solutions

Multiple Beneficiaries

When multiple people inherit a single account, banks require:

• Unanimous agreement on fund distribution
• Separate tax documentation for each beneficiary
• Clear communication channels between all parties

Frozen Accounts

Banks often freeze accounts upon notification of death. Release requires:

• Letters Testamentary or Administration from probate court
• Death certificate and executor identification
• Completion of bank-specific documentation

Time Sensitive Considerations

Immediate Access Needs

Surviving family members may need immediate access to funds for:

• Funeral expenses
• Outstanding bills
• Estate administration costs

Claims Deadlines

Wisconsin law sets specific timeframes for:

• Creditor claims (3 months after notice publication)
• Will contests (within 4 months of probate opening)
• Tax filings (9 months from date of death)

Required Documentation

Prepare these essential documents:

• Original death certificate (multiple copies)
• Letters Testamentary or Administration
• Valid government-issued photo ID
• Social Security numbers for all beneficiaries
• Will or trust documents if applicable
• Bank account statements and information

Professional Assistance

Consider engaging these professionals:

• Probate attorney for complex estates
• Certified Public Accountant for tax guidance
• Financial advisor for investment decisions
• Estate mediator for beneficiary disputes

Final Steps and Record Keeping

Maintain thorough records of:

• All bank communications and transfers
• Tax documentation and filings
• Distribution receipts and agreements
• Court orders and legal documents

Store these records for at least seven years after final distribution, ensuring compliance with both state and federal requirements.