Many estate administrations proceed smoothly: the personal representative identifies and collects the assets, pays debts and taxes, and distributes the remainder to the beneficiaries. However, certain circumstances can derail an otherwise routine administration. This article identifies common administrative complications, including problems with governing instruments, beneficiaries, fiduciaries, assets, and creditors, and highlights the tools available to resolve them.

Problems with Governing Instruments

Ambiguity and Mistakes. Wills are meant to serve as an instruction manual for the administration of the decedent’s estate. Misspellings, undefined terms, inconsistencies, mistakes of law or fact, and ambiguities can create complications. For example, a will might leave assets to “children” without addressing adopted children or stepchildren. Similarly, specific or formula-based distributions may become difficult or impractical to apply due to changes in tax law or insufficient assets. In practice, many ambiguities or mistakes are not discovered until after death, when the personal representative attempts to apply the terms to circumstances that have changed since the will’s execution.

When ambiguity or mistakes exist, the personal representative’s role is not to guess at the decedent’s intent. Rather, the fiduciary should consult Wisconsin’s rules of construction, including those in Wis. Stat. chapter 854 (part of the Probate Code), and consider seeking judicial construction or reformation of the will. In these situations, obtaining a judicial determination can protect the fiduciary by providing clear instructions and proactively resolving disputes.

Missing Original Wills. Original wills can go missing, whether they are misplaced during a move or mistakenly destroyed. Often, copies of the will are still readily accessible. Wisconsin law provides a procedure for proving and admitting a lost or destroyed will when the original is unavailable.^[1] Generally, this involves a petition that establishes the will’s contents and validity and overcomes the presumption that a missing original will was intentionally destroyed. Proactively obtaining attorney records, correspondence, witness testimony, evidence of the decedent’s statements regarding the will, and the beneficiaries’ consent, if possible, will help streamline the process and prevent further delay and cost in this situation.

When ambiguity or mistakes exist, the personal representative’s role is not to guess at the decedent’s intent.

Problems with People

Missing, Unidentifiable, or Foreign Heirs. To open a probate estate and appoint a personal representative, all interested parties, including heirs and beneficiaries, must receive proper notice.^[2] To close an estate and discharge the personal representative, the personal representative must make distributions to the entitled heirs or beneficiaries.^[3] These straightforward concepts can become complicated when heirs or beneficiaries cannot be located due to name changes, relocations, or estrangement. These difficulties are especially common when families are blended, relatives are distant or live abroad, or no living children, parents, or siblings survived the decedent. In practice, locating and contacting heirs in these cases can take months.

The personal representative is charged with conducting a reasonable investigation into the location of the heirs and beneficiaries. There are several ways this can be accomplished when informal searches prove fruitless, including engaging a professional heir-search company, requesting that the court authorize notice by publication, or requesting the appointment of a guardian ad litem to protect the absent party’s interests.^[4] Because professional heir searches can be expensive, the cost of these methods should be weighed against the value of the estate. When an heir or beneficiary is not located despite diligent efforts, formal administration and court involvement may be necessary before final distributions can occur, and unclaimed distributions may escheat after the applicable statutory period.^[5]

Beneficiaries Who are Minors, Have Disabilities, or Lack Capacity. Not all beneficiaries can receive distributions outright or act on their own behalf in estate administration. Minor beneficiaries generally cannot receive distributions outright, and adult beneficiaries might be unable to receive distributions because of disability, incapacity, or an existing guardianship. A guardian ad litem is typically required for minor beneficiaries or individuals adjudicated incompetent who do not have a guardian of estate.^[6] These circumstances require careful attention to the terms of the will and probate procedure.

Depending on the circumstances, distributions may need to be made to a custodial account under the Wisconsin Uniform Transfers to Minors Act, a supplemental needs trust, a guardian of estate, or another protective arrangement authorized by the terms of the will or by the court. Early planning and communication with the beneficiary’s parents, guardians, caregivers, and advisors can help prevent cost and delay and ensure the protective arrangement is well suited to the beneficiary’s needs.

Absent, Unable, or Unwilling Fiduciaries. Personal representatives might become incapacitated, die, move away, become overwhelmed, or simply fail to perform their required tasks. These circumstances can create significant and sometimes frustrating delays for beneficiaries and the court.

Removal requests often arise when a fiduciary fails to communicate with heirs or beneficiaries, fails to collect assets, ignores court orders, creates conflicts of interest, or becomes unable to effectively administer the estate. However, not every disagreement, dispute, or missed administration deadline warrants replacement of the personal representative. Courts generally focus on whether the personal representative’s conduct threatens the proper administration of the estate.

The court, on its own motion or by petition of any interested person, shall remove a personal representative who is adjudicated incompetent, disqualified, unsuitable, or incapable of discharging duties.^[7] The court may remove a personal representative who generally fails to perform the required duties.^[8] When identifying a successor to replace the removed personal representative, the court will look to the terms of the will for a nominated successor. If no successor is named, the court can look to other family members or even an independent professional fiduciary.^[9] The successor personal representative and attorney should give close attention to ensuring the transition of records, assets, and authority to mitigate any further cost or delay.

Not every disagreement, dispute, or missed administration deadline warrants replacement of the personal representative.

Problems with Assets

Illiquid Assets. Farmland, other types of real estate, closely held business interests, collectibles, and artwork can all be very valuable estate assets. Estates that appear valuable on paper, however, might lack the liquidity needed to pay debts, expenses, and taxes. In some situations, the personal representative will have no choice but to sell assets that beneficiaries would have preferred to retain to address the estate’s obligations. Illiquid assets can also create disputes about valuation and allocation among beneficiaries. Personal representatives should identify liquidity issues at the outset of the administration and determine their authority to value and sell assets or to borrow funds to avoid forced liquidation.

Closely Held Business Interests. Closely held business interests can be among the most difficult estate assets to administer because they combine valuation issues, liquidity concerns, and family dynamics within a single asset. The business’s governing documents may restrict distributions, impose valuation methods, or require redemption after a shareholder or member’s death. Family businesses are also a frequent source of disagreement among beneficiaries. At the outset of the administration, the attorney and the personal representative should review the will and the business’s governing documents to determine authority over the business interests and the estate’s obligations to the business. They should also set clear expectations for the beneficiaries to help prevent disputes down the line.

Out-of-State Property and Ancillary Administration. When a Wisconsin decedent owns real property in another state or country, that property generally is governed by the law of the jurisdiction in which the property is located and may require an ancillary proceeding there. Such proceedings can increase costs, require coordination with local counsel, and lengthen the time required to complete the administration.

Many states, including Wisconsin, have streamlined procedures allowing “foreign” personal representatives (that is, representatives or executors appointed in a probate proceeding in another state) to administer property located within the state with relatively minimal administrative hassle.^[10] Identifying out-of-state assets and consulting local counsel early helps attorneys and personal representatives avoid surprises and unnecessary delay.

Digital Assets. Today, nearly every decedent leaves a digital footprint. Email, online accounts, photographs, and, increasingly, cryptocurrency can carry substantial financial or sentimental value for beneficiaries. Wisconsin’s Digital Property Act governs a personal representative’s access to and authority over digital assets.^[11] The rules and procedures applicable to a digital asset usually depend on the decedent’s prior directions, the nature of the specific asset, and compliance with custodian procedures. Generally, the legal duties and authority applicable to tangible personal property also apply to digital assets.^[12]

Unlike traditional assets, digital assets often have no paper trail, making them difficult to identify, especially if the decedent did not keep thorough records. Personal representatives should search the decedent’s records for information about digital assets and ask close family members for information at the outset of the administration. This allows the personal representative to proactively engage with custodians and complete the required procedures for claiming or controlling digital assets early in the process.

After-Discovered Assets. Additional or forgotten property occasionally surfaces after an estate is closed. This might include old bank accounts, unclaimed property, physical stock certificates, or late refund checks.

The Wisconsin Probate Code has several mechanisms for dealing with after-discovered assets. In an informal administration, the personal representative retains authority over the estate for six months after filing the statement to close.^[13] If the property is discovered within that period, the personal representative can identify the property, amend the inventory, supplement the final accounting, and distribute the assets. In a formal administration that was properly closed by final judgment before discovery of the additional asset, a special administrator may be appointed to swiftly collect and distribute the asset with the court’s approval.^[14] In some circumstances, depending on the nature of the after-discovered asset, the court may require the administration to be reopened and appoint a personal representative to collect and distribute the asset.

Problems with Creditors

Claims Deadline. A significant duty of the personal representative is to evaluate, contest, and pay creditors’ claims. When a probate administration is opened, the court sets a deadline — generally three to four months later — for filing claims.^[15] Claims not filed by the deadline are barred, with limited exceptions, such as when the personal representative fails to properly provide notice to known creditors.^[16] Attorneys and personal representatives should be aware of the claims deadline and notice requirements to avoid unnecessary delay and cost when dealing with late claims.

Compromising and Contesting Claims. Not every claim that is filed is valid, whether substantively or procedurally. Claims must meet certain minimum pleading standards, including attachment of controlling written instruments and information sufficient to describe the nature and amount of the claim.^[17] Informal loans, business dealings, undocumented family transactions, or questionable service arrangements often become disputed claims because supporting documentation is limited.

In these circumstances, attorneys and personal representatives should carefully evaluate the merits and sufficiency of the claim and, if appropriate, settle or formally contest it.^[18] Contested claims usually require formal proceedings before a judge and can add complexity, delay, and cost to the administration. Early in the process, investigating, determining whether a claim can be prudently settled, and contesting illegitimate claims can reduce the cost and delay associated with formal proceedings.

Contingent Claims. Contingent claims are claims that will not become due until the occurrence of a future event.^[19] A common example is a claim based on pending litigation against the estate, which will not become due unless the estate is found liable. Even relatively routine litigation can extend beyond the timeline of a typical estate administration, making contingent claims a common cause of delay. This makes it difficult for attorneys and personal representatives to determine whether and when distributions to heirs or beneficiaries can occur. For particularly lengthy or uncertain contingent claims, seeking court instruction on how to administer the estate in the meantime may be appropriate.

Insolvency and the Order of Payment. When the estate’s assets are insufficient to pay all valid claims, the estate is insolvent, and beneficiaries’ interests must yield to creditors’ payment. The personal representative must follow specific priority rules outlined in Wis. Stat. section 859.25 in paying each claim. Attorneys and personal representatives often cannot determine whether the estate is solvent until after the claims deadline has passed, and they should refrain from paying claims or making distributions to beneficiaries until solvency is determined. Mistaken or improper distributions can expose the personal representative to liability and create additional complexity, cost, and delay in administration. Insolvent estates require heightened attention and often demand a more deliberate approach than solvent estates.

Revocable Trusts and Estate Creditors. Personal representatives and trustees sometimes assume that a fully funded revocable trust escapes the decedent’s creditors. It does not. After the settlor’s death, revocable trust property remains liable for the settlor’s debts, costs of administration, and funeral and burial expenses to the extent the probate estate is inadequate.^[20] Because a funded revocable trust may avoid probate altogether, the Trust Code supplies a parallel claims procedure so that creditors of a deceased settlor are not left without recourse.^[21]

Conclusion

Although no administration can be planned perfectly, early identification of potential issues and an understanding of Wisconsin probate procedures can help attorneys and personal representatives navigate unexpected roadblocks and keep the administration moving forward.

Also of Interest

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Endnotes

[1] Wis. Stat. § 856.17. ^

[2] Wis. Stat. §§ 856.11, 879.03(2)(a). ^

[3] Wis. Stat. §§ 863.41, 863.47, 865.16(1)(b). ^

[4] Wis. Stat. §§ 879.05, 879.23(1). ^

[5] Wis. Stat. § 863.39(1). ^

[6] Wis. Stat. § 879.23(1). ^

[7] Wis. Stat. § 857.15. ^

[8] Id. ^

[9] See Wis. Stat. § 857.21 (regarding appointment of successor personal representative). ^

[10] See Wis. Stat. ch. 868. ^

[11] Wis. Stat. ch. 711. ^

[12] Wis. Stat. § 711.12(1). ^

[13] Wis. Stat. § 865.16(2). ^

[14] Wis. Stat. § 867.07(2). ^

[15] Wis. Stat. § 859.01. ^

[16] Wis. Stat. § 859.02(1). ^

[17] Wis. Stat. § 859.13. ^

[18] Wis. Stat. §§ 859.31, 859.33. ^

[19] Wis. Stat. § 859.21. ^

[20] Wis. Stat. § 701.0505(1)(a)3. ^

[21] Wis. Stat. §§ 701.0508–09. ^