What are Capital Credits?
Your cooperative is operated on a not-for-profit basis. As a member of Central Wisconsin Electric Cooperative you share in any excess margins (revenues - expenses) the Co-op has in a particular year. The surplus margins are allocated to members of the cooperative in the form of Capital Credits. Quite simply put, Capital Credits reflect each member's ownership in the cooperative. Capital Credits are used by your cooperative to help build and maintain the electric system and then when finances permit, the board of directors authorize a cash refund to you.
CWEC NOW OFFERING EARLY RETIREMENT OF CAPITAL CREDITS TO ESTATES
In the event that a Central Wisconsin Electric Cooperative (CWEC) member dies, the capital credits in the member’s account become a part of the estate. Up until now, the member’s heirs received the retired capital credits on the deceased’s account on the same schedule established by CWEC for its members.
The CWEC Board of Directors recently changed this policy, and is allowing for the early retirement of capital credits for the outstanding balance of a deceased member’s capital credit account. If early retirement of capital credits is approved, the book value of the capital credits allocated to the deceased member would be discounted to net present value using a discount rate based on the co-ops weighted average cost of capital. The capital credits are discounted in order to balance the fairness between the estates and the other members of the cooperative, recognizing the time value of money (funds received today are worth more than funds received some time in the future).
The change was made to assist the member’s heirs in closing the estate, as well as to provide a fair and equitable method for early retirement of capital credits for estates, heirs, and surviving spouses of deceased members.
The early retirement and disbursement of capital credits to the appropriate estate representatives, heirs, or surviving spouses will be determined on a case-by-case basis by CWEC.
For surviving spouses or other joint members with rights of survivorship, upon the death of one joint member, the surviving joint member will automatically become the sole owner of all capital credits allocated to the joint membership. In this case, the surviving joint member can elect the early retirement of one-half of the capital credits allocated to the joint membership.
Surviving joint members must furnish CWEC a certified copy of the death certificate of the deceased joint member before CWEC will consider assignment or early retirement of the decedent’s percentage share of capital credits.
For one-person memberships, the assignment or early retirement of a deceased member’s capital credits shall only be made at the request of parties who are legally authorized to receive capitals credits. In addition to a certified copy of the death certificate of the deceased member, different forms need to be completed depending if it is an open probate estate, no probate estate, or closed estate. In this case, we ask that you call the CWEC office at 715-677-2211 to obtain the proper forms for your situation.
Any questions can be directed to the CWEC office at 715-677-2211.
CWEC Board Policy No. 408 - Retirement of Capital Credits for Deceased Patrons
Application by Legal Representative of Estate for Redemption of Patronage Capital (Exhibit A)
Application Requesting Redemption of Patronage Capital Closed Estate (Exhibit C)