Chapter 861

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:

861.08(1)(a)1. 1. The court that has jurisdiction of the probate proceedings relating to the decedent’s estate if a judicial proceeding has been commenced.

861.08(1)(a)2. 2. The court that has jurisdiction of probate proceedings relating to decedents’ estates located in the county of the decedent’s residence if no judicial proceeding has commenced.

861.08(1)(b) (b) Mail or deliver a copy of the petition to the personal representative, if any, of the decedent’s estate.

861.08(2) (2) Notification of interested parties. The surviving spouse shall give notice, in the manner provided in ch. 879, of the time and place set for hearing the petition to any persons who may be adversely affected by the election.

861.08(3) (3) Extension of time for election.

861.08(3)(a) (a) Subject to par. (b), the court may grant the surviving spouse an extension for making an election if the surviving spouse petitions the court for an extension, gives notice as specified in sub. (2) and shows cause for an extension.

861.08(3)(b) (b) The petition for extension of the time for making an election must be filed within 6 months after the decedent’s death, unless the court finds all of the following:

861.08(3)(b)1. 1. That the surviving spouse was prevented from filing the action or naming a particular interested party for reasons beyond his or her control.

861.08(3)(b)2. 2. That failure to extend the time for making an election will result in hardship for the surviving spouse.

861.08(4) (4) Withdrawal of election. The surviving spouse may withdraw the petition for an election at any time before the probate court has entered the final determination of the distribution of the decedent’s estate.

861.08(5) (5) Court determination of liability.

861.08(5)(a) (a) After notice and hearing, the court shall determine the deferred marital property elective share amount and shall determine the property that satisfies that amount under ss. 861.06 and 861.07.

861.08(5)(b) (b) If the personal representative does not hold the money or property included in the augmented deferred marital property estate, the court shall determine the liability of any person or entity that has any interest in the money or property or that holds that money or property.

861.08(5)(c) (c) The surviving spouse may choose to seek relief from fewer than all recipients. However, any such action shall not cause any other recipient’s liability to exceed the amount that he or she would have had to pay if all recipients had paid a prorated share.

861.08(6) (6) Suits authorized. An order or judgment of the court may be enforced in a suit for contribution or payment in other courts of this state or other jurisdictions.

861.08 History History: 1997 a. 188.

861.09 861.09 Right of election by or on behalf of surviving spouse. The surviving spouse must be living in order for an election to be filed. If the surviving spouse does not personally file the election, it may be filed on the surviving spouse’s behalf by the spouse’s conservator, guardian or guardian ad litem, or by an agent of the spouse acting under a power of attorney.

861.09 History History: 1997 a. 188.

861.10 861.10 Waiver of right to elect; failure to elect.

861.10(1) (1) Right to elect may be waived. The right to elect a deferred marital property elective share amount may be waived by the surviving spouse in whole or in part. The waiver may take place before or after marriage. The waiver must be contained in a marital property agreement that is enforceable under s. 766.58 or in a signed document filed with a court described in s. 861.08 (1) (a) after the decedent’s death.

861.10(2) (2) Waiver of “all rights”. Unless the waiver provides otherwise, a waiver of “all rights,” or equivalent language, in the property or estate of a present or prospective spouse, or in a complete property settlement entered into because of separation or divorce, is a waiver of all rights in the deferred marital property elective share amount.

861.10(3) (3) Failure to elect. Failure of a surviving spouse to elect is not a transfer of property and is not a gift from the surviving spouse to the decedent spouse’s probate estate or to the beneficiaries of other transfers.

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

861.11 861.11 Protection of payers and other 3rd parties.

861.11(1) (1) Definition. In this section, “governing instrument” includes a filed verified statement under s. 865.201, a certificate under s. 867.046 (1m) or a recorded application under s. 867.046 (5).

861.11(2) (2) Payer not liable until notice received.

861.11(2)(a) (a) Upon a beneficiary’s request for payment, a payer or other 3rd party who has received satisfactory proof of the decedent’s death and who has not received written notice that the surviving spouse or his or her representative intends to file a petition for the deferred marital property elective share amount or that a petition for the election has been filed is not liable for any of the following:

861.11(2)(a)1. 1. Causing any payment, item of property or other benefit included in the augmented deferred marital property estate under s. 861.03, to transfer directly to the beneficiary designated in a governing instrument.

861.11(2)(a)2. 2. Any other action in good faith reliance on the validity of a governing instrument.

861.11(2)(b) (b) A payer or other 3rd party is liable for payments made or other actions taken after receipt of written notice of the intent to file a petition for the elective share amount or written notice that a petition for the elective share amount has been filed.

861.11(3) (3) Method of notice to payers. A written notice of the intent to file a petition for the election or written notice that a petition for the election has been filed shall fulfill one of the following requirements:

861.11(3)(a) (a) Be mailed to the payer’s or other 3rd party’s main office or home by registered or certified mail, return receipt requested.

861.11(3)(b) (b) Be served upon the payer or other 3rd party in the same manner as a summons in a civil action.

861.11(4) (4) Optional payment of proceeds to court.

861.11(4)(a) (a) Upon receipt of written notice of the intent to file, or the filing of, a petition for the election, a payer or other 3rd party may pay any amount owed or transfer or deposit any item of property to or with whichever of the following applies:

861.11(4)(a)1. 1. The court that has jurisdiction of the probate proceedings relating to the decedent’s estate if proceedings have been commenced.

861.11(4)(a)2. 2. The court that has jurisdiction of probate proceedings relating to decedents’ estates located in the county of the decedent’s residence, if no judicial proceeding has commenced.

861.11(4)(b) (b) Payments, transfers or deposits made to the court discharge the payer or other 3rd party from all claims for amounts paid or the value of property transferred or deposited.

861.11(4)(c) (c) The court shall hold the funds or items of property. After the court makes its determination under s. 861.08 (5), it shall order disbursement in accordance with that determination. The court shall order disbursement to the beneficiary designated in the governing instrument if either of the following conditions applies:

861.11(4)(c)1. 1. No petition is filed in the court within the specified time under s. 861.08 (1).

861.11(4)(c)2. 2. A petition was filed but withdrawn under s. 861.08 (4) with prejudice.

861.11(4)(d) (d) If payments have been made to the court or if property has been deposited with the court under par. (a), the court may order that all or part of the payments or property be paid to the beneficiary who is designated in the governing instrument, upon that beneficiary’s petition to the court. Those payments shall be in an amount and subject to conditions consistent with this subchapter.

861.11(5) (5) Protection of financial institutions.

861.11(5)(a) (a) In this subsection:

861.11(5)(a)1. 1. “Account” has the meaning given in s. 705.01 (1) or 710.05 (1) (a).

861.11(5)(a)2. 2. “Financial institution” has the meaning given in s. 705.01 (3).

861.11(5)(b) (b) Notwithstanding sub. (2), in addition to the protections afforded a financial institution under ss. 701.1012 and 710.05 and chs. 112 and 705 a financial institution is not liable for having transferred an account included in the augmented deferred marital property estate under s. 861.03 to a beneficiary designated in a governing instrument, or for having taken any other action in reliance on the beneficiary’s apparent entitlement under the terms of a governing instrument, regardless of whether the financial institution received written notice of an intent to file, or the filing of, a petition for the deferred marital property elective share amount.