Chapter 861

861.02(7) (7) Applicability of election.

861.02(7)(a) (a) Unless the right has been waived under s. 861.10 or other limitations of this subchapter apply, the surviving spouse is eligible to make the election if at the time of the decedent’s death the decedent is domiciled in this state.

861.02(7)(b) (b) If a decedent who is not domiciled in this state owns real property in this state, the rights of the surviving spouse in that property are governed by s. 861.20.

861.02(8) (8) Effect if death caused by spouse. Section 854.14 (2) (c) and (3m) (d) applies to election of deferred marital property if the decedent’s surviving spouse unlawfully and intentionally killed the decedent.

861.02 History History: 1983 a. 186; 1985 a. 37 ss. 144, 145; Stats. 1985 s. 861.02; 1987 a. 393; 1991 a. 224, 301, 315; 1993 a. 213; 1997 a. 188; 2005 a. 216.

861.02 Note NOTE: 1991 Wis. Act 301 contains legislative council notes.

861.02 Annotation Deferred marital property under sub. (1) is property subject to administration for all purposes, including the payment of claims under s. 879.63. In Matter of Estate of Moccero, 168 Wis. 2d 313, 483 N.W.2d 310 (Ct. App. 1992).

861.02 Annotation Wisconsin’s New Deferred Marital Property Election. Erlanger. Wis. Law. April 1999.

861.03 861.03 Augmented deferred marital property estate: decedent’s probate property and nonprobate or other property transfers. Subject to s. 861.05, the augmented deferred marital property estate includes all of the following:

861.03(1) (1) Deferred marital property in decedent’s probate estate. The value of deferred marital property in the decedent’s probate estate.

861.03(2) (2) Deferred marital property passing nonprobate at decedent’s death. The value of deferred marital property owned or owned in substance by the decedent immediately before death that passed outside probate at the decedent’s death, including the following:

861.03(2)(a) (a) The decedent’s fractional interest in deferred marital property that was held by the decedent with the right of survivorship.

861.03(2)(b) (b) The decedent’s ownership interest in deferred marital property that was held by the decedent in a form payable or transferable on death, including deferred employment benefit plans, individual retirement accounts, annuities and transfers under s. 766.58 (3) (f), or in co-ownership with the right of survivorship.

861.03(2)(c) (c) Deferred marital property in the form of proceeds of insurance on the life of the decedent, including accidental death benefits, that were payable at the decedent’s death, if the decedent owned the insurance policy immediately before death or if the decedent alone and immediately before death held a presently exercisable general power of appointment over the policy or its proceeds.

861.03(2)(d) (d) Deferred marital property over which the decedent alone, immediately before death, held a presently exercisable general power of appointment, to the extent that the property passed at the decedent’s death by exercise, release, lapse, default or otherwise.

861.03(3) (3) Deferred marital property transferred with retained rights or benefits.

861.03(3)(a) (a) The augmented deferred marital property estate includes the value of any deferred marital property transferred by the decedent in which the decedent retained rights or benefits, including but not limited to the following:

861.03(3)(a)1. 1. Deferred marital property in which the decedent retained the right to possession, use, enjoyment or income and that was irrevocably transferred, to the extent that the decedent’s right terminated at or continued beyond the decedent’s death.

861.03(3)(a)2. 2. Deferred marital property in which the decedent retained the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom, to control the time at which designated persons shall possess or enjoy the property or income therefrom, or to alter or amend the terms of the transfer of the property, to the extent that the decedent’s right terminated at or continued beyond the decedent’s death.

861.03(3)(a)3. 3. Any transfer of deferred marital property, including transfer of an income interest, in which the decedent created a power of appointment, including the power to revoke or terminate the transfer or to consume, invade or dispose of the principal or income, if the power was exercisable by the decedent alone, by the decedent in conjunction with another person or by a nonadverse party, and if the power is for the benefit of the decedent, creditors of the decedent, the decedent’s estate or creditors of the decedent’s estate.

861.03(3)(b) (b) The amount included under par. (a) 3. is the value of the property subject to the power of appointment if the power of appointment is over property, the value of the property that produces or produced the income if the power of appointment is over income or the power valued at the higher amount if the power of appointment is over both income and property. The value is limited by the extent to which the power of appointment was exercisable at the decedent’s death or the property passed at the decedent’s death by exercise, release, lapse, default or otherwise.

861.03(4) (4) Deferred marital property transferred within 2 years prior to death.

861.03(4)(a) (a) In this subsection, termination occurs:

861.03(4)(a)1. 1. With respect to a right or interest in property, when the right or interest terminates by the terms of the governing instrument or when the decedent transfers or relinquishes the right or interest.

861.03(4)(a)2. 2. With respect to a power of appointment over property, when the power terminates by exercise, release, lapse, default or otherwise.

861.03(4)(a)3. 3. With respect to a power of appointment under sub. (2) (d), when the power terminates by exercise or release.

861.03(4)(b) (b) The augmented deferred marital property estate includes the value of any deferred marital property transferred by the decedent within the 2 years immediately preceding the decedent’s death, including the following:

861.03(4)(b)1. 1. Deferred marital property that passed as a result of the termination of a right or interest in, or power of appointment over, property that would have been included in the augmented deferred marital property estate under subs. (2) (a), (b) or (d) or (3), if the right, interest or power had not terminated until the decedent’s death. The amount included is the value of the property that would have been included if the property were valued at the time the right, interest or power terminated.

861.03(4)(b)2. 2. Transfers by the decedent of or relating to the deferred marital property component of an insurance policy on the life of the decedent, if the proceeds would have been included under sub. (2) (c) had the transfer not occurred. The amount included is the value of the insurance proceeds to the extent that they were payable at the decedent’s death.

861.03(4)(b)3. 3. Any transfer of deferred marital property to the extent that it is not otherwise included in the augmented deferred marital property estate. The amount included is the value of the property at the time of the transfer, but only to the extent that the aggregate transfers to any one donee in either of the 2 years exceeded $10,000.

861.03 History History: 1985 a. 37; 1987 a. 393; 1997 a. 188.

861.04 861.04 Augmented deferred marital property estate: surviving spouse’s property and transfers to others.

861.04(1) (1) Subject to s. 861.05, the augmented deferred marital property estate includes the value of any deferred marital property that would have been included under s. 861.03 had the surviving spouse been the decedent.

861.04(2m) (2m) When the surviving spouse is treated as the decedent under sub. (1), the decedent is not treated as the surviving spouse for the purposes of s. 861.05 (1) (e) or (2m).

861.04 History History: 1997 a. 188; 2005 a. 216.

861.05 861.05 Augmented deferred marital property estate: calculation of property interests.

861.05(1) (1) Exclusions. The following are not included in the augmented deferred marital property estate:

861.05(1)(a) (a) Transfers of deferred marital property to the extent that the decedent received full or partial consideration for the transfer in money or money’s worth.

861.05(1)(b) (b) Transfers under the U.S. social security system.

861.05(1)(c) (c) Transfers of deferred marital property to persons other than the spouse who did not make the transfer, with the written joinder or written consent of that spouse.

861.05(1)(d) (d) Transfers of deferred marital property to the surviving spouse under s. 861.33 or 861.41.

861.05(1)(e) (e) The deferred marital property component of any deferred employment benefit plan, or of assets in an individual retirement account that are traceable to the rollover of a deferred employment benefit plan, held by the surviving spouse that would have terminated under s. 766.62 (5) had it been marital property.

861.05(2) (2) Valuation of decedent’s property and transfers.

861.05(2)(a) (a) Property included in the augmented deferred marital property estate under s. 861.03 (1), (2) (c) and (4) (b) 2. is valued as of the date of the decedent spouse’s death.

861.05(2)(b) (b) Property included under s. 861.03 (2) (a), (b) and (d) and (3) is valued immediately before the decedent spouse’s death.

861.05(2)(c) (c) Property included under s. 861.03 (4) (b) 1. is valued as of the date that the right, interest or power terminated.

861.05(2)(d) (d) Property included under s. 861.03 (4) (b) 3. is valued as of the date of the transfer.

861.05(2)(e) (e) If deferred marital property is commingled with other types of property but the deferred marital property component can be identified, only that component is valued.

861.05(2)(f) (f) The value of property included in the augmented deferred marital property estate includes the commuted value of any present or future interest in deferred marital property and the commuted value of deferred marital property payable under any trust, life insurance settlement option, annuity contract, public or private pension, disability compensation, death benefit or retirement plan or any similar arrangement.

861.05(2m) (2m) Valuation of surviving spouse’s property and transfers. The surviving spouse’s property included in the augmented deferred marital property estate under s. 861.04 (1) is valued in the same manner as the decedent spouse’s property included in the augmented deferred marital property estate is valued under sub. (2), subject to the following:

861.05(2m)(a) (a) The surviving spouse shall be treated as having died after the decedent on the date of the decedent’s death notwithstanding the 120-hour survival requirement under s. 854.03 (1).

861.05(2m)(b) (b) Life insurance on the surviving spouse’s life shall have the value of the deferred marital property component of the interpolated terminal reserve and the unused portion of the term premium of the policy as of the date of the decedent’s death.

861.05(3) (3) Reduction for equitable proportion of expenses and enforceable claims. The value of deferred marital property included in the augmented deferred marital property estate under s. 861.03 or 861.04 shall be reduced by an equitable proportion of funeral and burial expenses, administrative expenses, other charges and fees and enforceable claims.

861.05(4) (4) Overlapping application; no double inclusion. If the same property could be included in the augmented deferred marital property estate under more than one provision of s. 861.03 or 861.04, the property is included only once, and it is included under the provision that yields the greatest value.

861.05 History History: 1985 a. 37; 1991 a. 301; 1997 a. 188; 2005 a. 216.

861.05 Note NOTE: 1991 Wis. Act 301 contains legislative council notes.

861.06 861.06 Satisfaction of deferred marital property elective share amount.

861.06(1) (1) Definition. In this section, “property transferred to the surviving spouse” includes outright transfers that have been disclaimed by the surviving spouse. The term does not include transfers in trust that have been disclaimed by the surviving spouse, unless the surviving spouse had a general power of appointment over the property in the trust during his or her lifetime or an interest in the trust after the disclaimer.

861.06(2) (2) Initial satisfaction of deferred marital property elective share amount. If the surviving spouse makes the election under s. 861.02, the following categories of property are used first to satisfy the elective share amount:

861.06(2)(a) (a) All property included in the augmented deferred marital property estate under s. 861.04.

861.06(2)(b) (b) All marital, individual, deferred marital, or deferred individual property, transferred to the surviving spouse, including any beneficial interest in property transferred in trust:

861.06(2)(b)1. 1. From the decedent’s probate estate, other than property transferred under s. 861.33 or 861.41, and other than property transferred to the surviving spouse under s. 861.31 or 861.35 except as ordered by the court under s. 861.31 (4) or 861.35 (4).

861.06(2)(b)2. 2. By nonprobate transfer at the decedent’s death.

861.06(2)(b)3. 3. By operation of any state or federal law, other than transfers under the U.S. social security system.

861.06(2)(b)4. 4. By the decedent at any time during the decedent’s life, except that the following shall be excluded:

861.06(2)(b)4.a. a. The first $5,000 of the value of gifts from the decedent to the surviving spouse each year. Each gift shall be valued as of the date of the gift.

861.06(2)(b)4.b. b. Gifts received from the decedent that the surviving spouse can show were subsequently and gratuitously transferred in a manner that, had they been the deferred marital property of the surviving spouse, would not have been included in the augmented deferred marital property estate under s. 861.04.

861.06(3) (3) Unsatisfied balance. After the property under sub. (2) has been applied toward satisfaction of the deferred marital property elective share amount, the remainder of the elective share amount shall be satisfied proportionally from transfers to persons other than the surviving spouse of property included in the augmented deferred marital property estate under s. 861.03 (1), (2), (3) or (4) (b) 2.

861.06(4) (4) Remaining unsatisfied balance. After the property under subs. (2) and (3) has been applied toward satisfaction of the deferred marital property elective share amount, the remainder of the elective share amount shall be satisfied proportionally from transfers to persons other than the surviving spouse of property included in the augmented deferred marital property estate under s. 861.03 (4) (b) 1. or 3.

861.06(5) (5) Equitable adjustment of shares. If all or part of a prorated share under sub. (2), (3) or (4) is uncollectible, the court may increase the prorated liability of recipients described under the same or another of the 3 subsections if all of the following conditions are satisfied:

861.06(5)(a) (a) The court finds that an equitable adjustment is necessary to avoid hardship for the surviving spouse.

861.06(5)(b) (b) No recipient or donee of a recipient is liable for an amount greater than the value of the deferred marital property subject to the election that was received.

861.06(6) (6) Valuation. The value of property used to satisfy the deferred marital property elective share includes the value of any property transferred outright to the surviving spouse, the commuted value of any present or future interest in property transferred to the surviving spouse, and the commuted value of property payable to the surviving spouse under any trust, life insurance settlement option, annuity contract, public or private pension, disability compensation, death benefit or retirement plan, or any similar arrangement.

861.06 History History: 1997 a. 188; 2005 a. 216.

861.07 861.07 Personal liability of recipients.

861.07(1) (1) Definition. In this section, “proceeds” includes:

861.07(1)(a) (a) The consideration, in money or property, received in exchange for the property that is the subject of the transfer.

861.07(1)(b) (b) Property acquired with the consideration received in exchange for the property that is the subject of the transfer.

861.07(2) (2) Persons liable. The following persons are liable to make a prorated contribution toward satisfaction of the surviving spouse’s deferred marital property elective share amount:

861.07(2)(a) (a) Original recipients of the decedent’s transfers of deferred marital property to others, irrespective of whether the recipient has the property or its proceeds.

861.07(2)(b) (b) Donees of the recipients under par. (a) if the donees have the property or its proceeds. If a donee has neither the property nor its proceeds but knew or should have known of the liability under this section, the donee remains liable for his or her share of the prorated contribution.

861.07(3) (3) Mode of satisfaction.

861.07(3)(a) (a) Subject to par. (b), a person who is liable under sub. (2) may either give up the proportional part of the decedent’s transfers to him or her or pay the value of the amount for which he or she is liable.

861.07(3)(b) (b) On petition of the surviving spouse showing that the mode of satisfaction chosen in par. (a) will create a hardship for the surviving spouse, the court may order that a different mode of satisfaction be used.

861.07(4) (4) Effect of federal preemption. If any provision of this subchapter is preempted by federal law with respect to any property interest or benefit that is included under s. 861.03 and that would pass but for that preemption to a person other than the surviving spouse, the recipient, unless he or she is a recipient for value, is subject to subs. (1) to (3).

861.07 History History: 1997 a. 188; 2005 a. 216.

861.08 861.08 Proceeding for election; time limit.

861.08(1) (1) Generally. Except as the time may be extended under sub. (3), in order to make the election, the surviving spouse shall, within 6 months after the date of the decedent’s death, do all of the following:

861.08(1)(a) (a) File a petition for the election with whichever of the following applies: