Chapter 854

854.07(2) (2) Except as provided in sub. (4) and s. 854.06, if the residue of a governing instrument is to be transferred to 2 or more persons, the share of a residuary transferee that fails passes to the other residuary transferees in proportion to the interest of each in the remaining part of the residue.

854.07(3) (3) If a governing instrument other than a will does not effectively dispose of an asset that is governed by the instrument, that asset shall be paid or distributed to the transferor’s probate estate.

854.07(4) (4) If the person who executed the governing instrument had an intent contrary to any provision in this section, then that provision is inapplicable to the transfer. Extrinsic evidence may be used to construe the intent.

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

854.07 Annotation Under a will leaving “my homestead which I occupy at the time of my death” to a son, the home in which the testator lived when the will is executed should be awarded to the son even though the testator became ill and was confined to a nursing home for a year prior to his death and the home was rented. Estate of Gotthart, 56 Wis. 2d 563, 202 N.W.2d 397 (1972).

854.07 Annotation The testator’s spouse inherited the residue when a purported residuary clause made only specific and general bequests and did not make a dispositive provision for distribution of the residue. To read into a will a gift by implication, it is necessary to first find a positive, disposing intent based on a contingency that did not occur. Then it is possible, if the facts warrant it, to imply the same intent concerning the contingency which did occur but which was not accounted for in the will. In Matter of Estate of McWilliams, 78 Wis. 2d 328, 254 N.W.2d 277 (1977).

854.07 Note NOTE: The preceding cases were decided prior to the adoption of 1997 Wis. Act 188, which made extensive revisions to the Wisconsin Probate Code.

854.08 854.08 Nonademption of specific gifts in certain cases.

854.08(1) (1) Abrogation of common law. The common law doctrine of ademption by extinction, as it might otherwise apply to the situations governed by this section, is abolished.

854.08(2) (2) Proceeds of sale.

854.08(2)(a) (a) Subject to sub. (6), if property that is the subject of a specific gift is sold by the person who executed the governing instrument within 2 years of the person’s death, the specific beneficiary has the right to the following amounts if available under the governing instrument:

854.08(2)(a)1. 1. Any balance of the purchase price unpaid at the time of death, including any security interest in the property and interest accruing before death, together with the incidents of the specific gift.

854.08(2)(a)2. 2. A general pecuniary transfer equivalent to the amount of the purchase price paid to, or for the benefit of, the person within one year of the seller’s death.

854.08(2)(b) (b) Acceptance of a promissory note of the purchaser or a 3rd party is not considered payment, but payment on the note is payment on the purchase price; and for purposes of this section property is considered sold as of the date when a valid contract of sale is made. Sale by an agent of the person who executed the governing instrument or by a trustee under a revocable living trust created by the person is a sale by the person for purposes of this section.

854.08(3) (3) Proceeds of insurance on property. Subject to sub. (6), if insured property that is the subject of a specific gift is destroyed, damaged, lost, stolen or otherwise subject to any casualty compensable by insurance, the specific beneficiary has the right to the following amounts, if available under the governing instrument, reduced by any amount expended or incurred to restore or repair the property:

854.08(3)(a) (a) Any insurance proceeds paid with respect to the property after the decedent’s death, together with the incidents of the specific gift.

854.08(3)(b) (b) A general pecuniary transfer equivalent to any insurance proceeds paid to, or for the benefit of, the decedent within one year of the decedent’s death.

854.08(4) (4) Condemnation award.

854.08(4)(a) (a) Subject to sub. (6), if property that is the subject of a specific gift is taken by condemnation prior to the death of the person who executed the governing instrument, the specific beneficiary has the right to the following amounts if available under the governing instrument:

854.08(4)(a)1. 1. Any amount of the condemnation award unpaid at the time of death.

854.08(4)(a)2. 2. A general pecuniary transfer equivalent to the amount of an award paid to, or for the benefit of, the person who executed the governing instrument within one year of that person’s death.

854.08(4)(b) (b) In the event of an appeal in a condemnation proceeding, the award is, for purposes of this section, limited to the amount established on the appeal. Acceptance of an agreed price or a jurisdictional offer is a sale under sub. (2).

854.08(5) (5) Property under guardianship, conservatorship, or power of attorney.

854.08(5)(a) (a) In this subsection, “agent” means an agent under a durable power of attorney, as defined in s. 244.02 (3).

854.08(5)(b) (b) Subject to pars. (c) and (d) and sub. (6), if property that is the subject of a specific gift is sold or mortgaged by a guardian, conservator, or agent of the person who executed the governing instrument, or if a condemnation award or insurance proceeds are paid to a guardian, conservator, or agent, the specific beneficiary has the right to a general pecuniary transfer equivalent to the proceeds of the sale, mortgage, condemnation award, or insurance proceeds, reduced by any amount expended or incurred to restore or repair the property or to reduce the indebtedness on the mortgage, if the funds are available under the governing instrument.

854.08(5)(c) (c) Paragraph (b) does not apply with respect to a guardian or conservator if, subsequent to the sale, mortgage, award, or receipt of insurance proceeds, the person who executed the governing instrument is adjudicated competent and survives such adjudication for a period of one year; but in such event the rights of the specific beneficiary shall be determined as though the proceeds were paid to the owner under sub. (2), (3), or (4).

854.08(5)(d) (d) Paragraph (b) does not apply with respect to an agent if the person who executed the governing instrument is competent at the time of the sale, mortgage, award, or receipt of insurance proceeds but in such event the rights of the specific beneficiary shall be determined as though the proceeds were paid to the owner under sub. (2), (3), or (4).

854.08(6) (6) Limitations.

854.08(6)(ag) (ag) This section is inapplicable if the person who executed the governing instrument gives property during the person’s lifetime to the specific beneficiary with the intent of satisfying the specific gift and the requirement under s. 854.09 (1) is satisfied.

854.08(6)(ar) (ar) If the person who executed the governing instrument had an intent contrary to any provision in this section, then that provision is inapplicable to the transfer. Extrinsic evidence may be used to construe the intent.

854.08(6)(b) (b) If part of the property that is the subject of the specific gift is destroyed, damaged, sold or condemned, the specific gift of any remaining interest in the property is not affected by this section; but this section applies to the part affected by the destruction, damage, sale or condemnation.

854.08(6)(c) (c) The amount that the specific beneficiary receives under subs. (2) to (5) is reduced by any expenses of the sale, by the expenses of collection of the proceeds of insurance, sale, or condemnation award and by any amount by which the income tax of the decedent or the decedent’s estate is increased because of items covered by this section. Expenses include legal fees paid or incurred.

854.08 History History: 1997 a. 188; 2005 a. 216, 387; 2009 a. 319.

854.09 854.09 Advancement; satisfaction.

854.09(1) (1) A gift that the decedent made during his or her lifetime, including an incomplete gift that became complete on the decedent’s death, is treated as a full or partial satisfaction of a transfer at death to an heir under s. 852.01 (1) or a transferee under a governing instrument executed by the decedent only if at least one of the following applies:

854.09(1)(a) (a) The governing instrument, if any, either expressly or as construed from extrinsic evidence, provides that the gift be taken into account.

854.09(1)(b) (b) The decedent declared in a document, either expressly or as construed from extrinsic evidence, that the gift is in satisfaction of, or an advance against, what the transferee would receive at the decedent’s death, whether or not the document was contemporaneous with the gift.

854.09(1)(c) (c) The transferee acknowledged in writing before or after the decedent’s death, either expressly or as construed from extrinsic evidence, that the gift is in satisfaction of, or an advance against, what the transferee would receive at the decedent’s death.

854.09(2) (2) For partial satisfaction, property given during life is valued as of the time that the transferee came into possession or enjoyment of the property or at the death of the person who executed the governing instrument, whichever occurs first.

854.09(3) (3) If the transferee fails to survive the person who executed the governing instrument and his or her issue take a substitute transfer under intestacy or under a governing instrument, the issue receive the same transfer that the named transferee would have received had the transferee survived, unless the transferor declared otherwise in a document, either expressly or as construed from extrinsic evidence.

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

854.10 854.10 Choice of law. The meaning and legal effect of a governing instrument are determined by the local law of the state selected by the transferor in the governing instrument, unless the application of that law is contrary to s. 861.02 or 861.31 or any other public policy of this state otherwise applicable to the disposition.

854.10 History History: 1997 a. 188.

854.11 854.11 Gift of securities.

854.11(1) (1) Definition. In this section, “securities” includes all of the following:

854.11(1)(a) (a) Any note, stock, treasury stock, bond, debenture, evidence of indebtedness, collateral trust certificate, transferable share or voting trust certificate.

854.11(1)(b) (b) Any certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease.

854.11(1)(c) (c) Any interest or instrument commonly known as a security.

854.11(1)(d) (d) Any certificate of interest or participation in, any temporary or interim certificate, receipt or certificate of deposit for, or any warrant or right to subscribe to or purchase, any of the instruments or interests specified in pars. (a) to (c).

854.11(2) (2) Increase in securities; accessions. Except as provided in sub. (4), if a person executes a governing instrument that transfers securities and at the time of the execution or immediately after execution the described securities are in fact governed by the instrument, the transfer includes additional securities that are governed by the instrument at the person’s death if all of the following apply:

854.11(2)(a) (a) The additional securities were acquired after the governing instrument was executed.

854.11(2)(b) (b) The additional securities were acquired as a result of ownership of the described securities.

854.11(2)(c) (c) The additional securities are any of the following types:

854.11(2)(c)1. 1. Securities of the same organization acquired as a result of a plan of reinvestment.

854.11(2)(c)2. 2. Securities of the same organization acquired by action initiated by the organization or any successor, related or acquiring organization, excluding any acquired by exercise of purchase options.

854.11(2)(c)3. 3. Securities of another organization acquired as a result of a merger, consolidation, reorganization or other distribution by the organization or any successor, related or acquiring organization.

854.11(3) (3) Gift of securities construed as specific. Except as provided in sub. (4), a transfer of a stated number of shares or amount of securities is construed to be a specific gift if the same or a greater number of shares or amount of the securities was governed by the instrument at the time of, or immediately after, execution of the instrument, even if the instrument does not describe the securities more specifically or qualify the description by a possessive pronoun such as “my”.

854.11(4) (4) Contrary intent. If the person who executed the governing instrument had an intent contrary to any provision in this section, then that provision is inapplicable to the transfer. Extrinsic evidence may be used to construe the intent.

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

854.12 854.12 Debt to transferor.

854.12(1) (1) Heir under intestacy.

854.12(1)(a) (a) If an heir owes a debt to the decedent, the amount of the indebtedness shall be offset against the intestate share of the debtor heir.

854.12(1)(b) (b) In contesting an offset under par. (a), the debtor heir shall have the benefit of any defense that would be available to the debtor heir in a direct proceeding by the personal representative for the recovery of the debt, except that the debtor heir may not defend on the basis that the debt was discharged in bankruptcy or on the basis that the relevant statute of limitations has expired. If the debtor fails to survive the decedent, the court may not include the debt in computing any intestate shares of the debtor’s issue.

854.12(2) (2) Transferee under revocable governing instrument.

854.12(2)(a) (a) Subject to par. (c), if a transferee under a revocable governing instrument survives the transferor and is indebted to the transferor, the amount of the indebtedness shall be treated as an offset against the property to which the debtor transferee is entitled. If multiple revocable governing instruments transfer property to the debtor, the debt shall be equitably allocated against the various instruments.

854.12(2)(b) (b) Subject to par. (c), in contesting an offset under par. (a), the debtor shall have the benefit of any defense that would be available to the transferee in a direct proceeding for the recovery of the debt, except that the transferee may not defend on the basis that the debt was discharged in bankruptcy, unless that discharge occurred before the execution of the governing instrument, or on the basis that the relevant statute of limitations has expired. If the transferee fails to survive the decedent, the debt may not be included in computing the entitlement of alternate beneficiaries.

854.12(2)(c) (c) If the person who executed the governing instrument had an intent contrary to any provision in this subsection, then that provision is not applicable to the transfer. Extrinsic evidence may be used to construe the intent.

854.12(3) (3) Property not distributed because of offset. The property not distributed to the debtor becomes part of the residue of the entity that holds the debt. If the debt is not held by an entity, then the property not distributed to the debtor becomes part of the residue of the decedent’s probate estate.

854.12 History History: 2005 a. 216.

854.13 854.13 Disclaimer of transfers at death.

854.13(1) (1) Definitions. In this section:

854.13(1)(a) (a) “Beneficiary under a governing instrument” includes any person who receives or might receive property under the terms or legal effect of a governing instrument.

854.13(1)(c) (c) “Power of appointment” has the meaning given in s. 702.102 (15).

854.13(2) (2) Right to disclaim.

854.13(2)(a) (a) In general.

854.13(2)(a)1. 1. In this paragraph, “person” includes a person who is unborn or whose identity is unascertained.

854.13(2)(a)2. 2. A person who is an heir, recipient of property, or beneficiary under a governing instrument, donee of a power of appointment created by a governing instrument, appointee under a power of appointment exercised by a governing instrument, taker in default under a power of appointment created by a governing instrument, or person succeeding to disclaimed property may disclaim any property, including contingent or future interests or the right to receive discretionary distributions, by delivering a written instrument of disclaimer under this section.

854.13(2)(b) (b) Joint tenants. Upon the death of a joint tenant, a surviving joint tenant may disclaim any property that would otherwise accrue to him or her by right of survivorship and that is the subject of the joint tenancy by delivering a written instrument of disclaimer under this section.

854.13(2)(c) (c) Survivorship marital property. Upon the death of a spouse, the surviving spouse may disclaim the decedent spouse’s interest in survivorship marital property.

854.13(2)(d) (d) Partial disclaimer. Property may be disclaimed in whole or in part, except that a partial disclaimer of property passing by a governing instrument or by the exercise of a power of appointment may not be made if partial disclaimer is expressly prohibited by the governing instrument or by the instrument exercising the power of appointment.

854.13(2)(e) (e) Spendthrift provision. The right to disclaim exists notwithstanding any limitation on the interest of the disclaimant in the nature of a spendthrift provision or similar restriction.

854.13(2)(f) (f) Disclaimer by guardian or conservator. A guardian of the estate or a conservator appointed under ch. 54 or ch. 880, 2003 stats., may disclaim on behalf of his or her ward, with court approval, if the ward is entitled to disclaim under this section.

854.13(2)(g) (g) Disclaimer by agent under power of attorney. An agent under a power of attorney may disclaim on behalf of the person who granted the power of attorney if all of the following apply:

854.13(2)(g)1. 1. The person who granted the power of attorney is entitled to disclaim under this section.

854.13(2)(g)2. 2. The power of attorney specifically grants the power to disclaim.

854.13(2)(gm) (gm) Disclaimer by trustee. The trustee of a trust named as a recipient of property under a governing instrument may disclaim that property on behalf of the trust if the trust authorizes disclaimer by the trustee. If the trust does not authorize disclaimer by the trustee, the trustee’s power to disclaim is subject to the approval of the court.

854.13(2)(h) (h) After death. A person’s right to disclaim survives the person’s death and may be exercised by the person’s personal representative or special administrator upon receiving approval from the court having jurisdiction of the person’s estate after hearing upon notice to all persons interested in the disclaimed property, if the personal representative or special administrator has not taken any action that would bar the right to disclaim under sub. (11g).

854.13(2)(i) (i) Disclaimer of inter vivos transfers. A person who is a recipient of property under an inter vivos governing instrument, as defined in s. 700.27 (1) (c), may disclaim the property as provided in s. 700.27.

854.13(3) (3) Instrument of disclaimer. The instrument of disclaimer shall do all of the following: