AB720: Bill Text

With respect to intestacy, changes made primarily for updating and uniformity purposes include division of ancestors into maternal and paternal groups; limitation of the rights of remote relatives; clarification of rights when an heir is related to the decedent by 2 lines; and increased ability for a testator to disinherit relatives when part of the estate is governed by a will and part is intestate.

With respect to wills, changes made primarily for updating and uniformity purposes include changes in the rights of the surviving spouse if the decedent's will predates the marriage; provision of a "self-proving will" feature, which should facilitate admission of a Wisconsin will in other jurisdictions; clarification of what happens when a subsequent will or codicil does not obviously revoke the previous instrument; and codification of the doctrine of "incorporation by reference", which applies when a will seeks to include a separate document that does not itself meet the will execution requirements.

3. Merger of rules of interpretation for probate and nonprobate transfers

This bill merges rules of interpretation governing probate and nonprobate transfers, primarily by applying well-established probate rules of construction to nonprobate documents. These rules deal with such issues as what happens to a gift when the beneficiary does not survive, and the decedent did not make an alternate provision ("antilapse"); what happens when a specific item is left to someone but the item is not owned by the decedent ("ademption"); what happens when a specific item is left to someone and the item carries a mortgage or lien ("nonexoneration"); who qualifies for a class gift, such as a gift to "my children"; and what rules apply when a beneficiary wishes to forgo the benefits of a gift and have it go to someone else ("disclaimer"). In one case the effort to unify the law meant codifying a highly recommended drafting practice: requiring a beneficiary to survive for a specified period, in this case 5 days, in order to receive a transfer. All of these rules will apply only if a governing document fails to specify what should be done in the given situation and other evidence is inadequate to resolve the issue.

4. Attention to the complexities of divorce and remarriage

Wisconsin, like other states, has long had a probate rule that provides that a divorced spouse will be treated as having predeceased the decedent. The bill extends that rule to nonprobate assets and also applies the rule to relatives of the former spouse who are not also relatives of the decedent. Thus, for example, it would apply to a former stepchild but not to children born or adopted during the former marriage. Under the proposed rule, a person who wants a different result may simply provide for it in an estate plan made after the divorce; in addition, extrinsic evidence may be presented to rebut the presumption in the rule.

With respect to remarriage, the bill establishes a presumption that, subject to contrary evidence, if a person leaves property to a stepchild in the current marriage and that stepchild predeceases the decedent, the property goes to the stepchild's descendants. This is the same antilapse rule that applies to the decedent's own children.

5. Reduction of the complexity of deferred marital property rights

Under Wisconsin's marital property act, each spouse has a one-half interest in all property that is acquired from income through work or investments. However, many Wisconsin couples have deferred marital property: income earned (and the assets acquired therefrom) while the spouses were married but during a period when the act did not apply, either because one or both spouses lived in a different state or because the spouses lived in Wisconsin before the act became effective in 1986. At the death of a spouse, the current probate code includes separate elections for probate and nonprobate deferred marital property with complex calculations for each. The bill, which is grounded in the elective share provisions of the UPC, replaces the current system with a single deferred marital property election that is simpler to use and that more closely tracks the partnership theory of marriage on which the marital property act is based.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB720, s. 1 Section 1. 6.875 (1) (b) of the statutes is amended to read:

AB720,5,3 6.875 (1) (b) "Relative" means a spouse or individual related within the 1st, 2nd or 3rd degree of kinship under s. 852.03 (2), 1995 stats.

AB720, s. 2 Section 2. 48.92 (3) of the statutes is amended to read:

AB720,5,6 48.92 (3) Rights of inheritance by, from and through an adopted child are governed by s. 851.51 ss. 854.20 and 854.21.

AB720, s. 3 Section 3. 146.34 (1) (j) of the statutes is amended to read:

AB720,5,11 146.34 (1) (j) "Relative" means a parent, grandparent, stepparent, brother, sister, first cousin, nephew or niece; or uncle or aunt within the 3rd degree of kinship as computed under s. 852.03 (2), 1995 stats. This relationship may be by consanguinity or direct affinity.

AB720, s. 4 Section 4. 157.061 (7) of the statutes is amended to read:

AB720,5,15 157.061 (7) "Family member" means a spouse or an individual related by blood, marriage or adoption within the 3rd degree of kinship as computed under s. 852.03 (2), 1995 stats.

AB720, s. 5 Section 5. 178.21 (3) (e) of the statutes is amended to read:

AB720,5,19 178.21 (3) (e) A partner's right in specific partnership property is not subject to elective rights under s. 861.02 (1) or 861.03 of a surviving spouse or to allowances to a surviving spouse, heirs, or next of kin.

AB720, s. 6 Section 6. 242.01 (11) of the statutes is amended to read:

AB720,6,5 242.01 (11) "Relative" means an individual related by consanguinity within the 3rd degree of kinship as computed under s. 852.03 (2), 1995 stats., a spouse or an individual related to a spouse within the 3rd degree as so computed, and includes an individual in an adoptive relationship within the 3rd degree.

AB720, s. 7 Section 7. 252.15 (1) (eg) of the statutes is amended to read:

AB720,6,10 252.15 (1) (eg) "Relative" means a spouse, parent, grandparent, stepparent, brother, sister, first cousin, nephew or niece; or uncle or aunt within the 3rd degree of kinship as computed under s. 852.03 (2), 1995 stats. This relationship may be by consanguinity or direct affinity.

AB720, s. 8 Section 8. 615.03 (1) (c) of the statutes is amended to read:

AB720,6,14 615.03 (1) (c) A natural person who issues such an annuity to a relative by blood or marriage within the third 3rd degree of kinship as computed according to s. 852.03 (2), 1995 stats.

AB720, s. 9 Section 9. 632.485 of the statutes is repealed.

AB720, s. 10 Section 10. 632.695 of the statutes is created to read:

AB720,6,18 632.695 Applicability of general transfers at death provisions. Chapter 854 applies to transfers at death under life insurance policies and annuities.

AB720, s. 11 Section 11. 700.11 of the statutes is repealed and recreated to read:

AB720,7,2 700.11 Interests in "heirs" and the like. (1) If a statute or governing instrument, as defined in s. 854.01, specifies that property is to be distributed to, or a future interest is to be created in, a designated individual's "heirs", "heirs at law", "next of kin", "relatives" or "family" or a term that has a similar meaning, or if a class gift in favor of "descendants", "issue" or "heirs of the body" does not specify the manner in which the property is to be distributed among the class members, the property is distributed according to s. 854.22.

AB720,7,4 (2) The common law doctrine of worthier title is abolished under s. 854.22 (3). Situations in which the doctrine may have applied are governed by s. 854.22 (1).

AB720, s. 12 Section 12. 700.12 of the statutes is repealed and recreated to read:

AB720,7,8 700.12 After-born persons included in class gift. With respect to membership in a class under a class gift, the status of a person who was born after the membership in the class was determined is governed by s. 854.21 (5).

AB720, s. 13 Section 13. 700.17 (2) (a) of the statutes is amended to read:

AB720,7,16 700.17 (2) (a) Each of 2 or more joint tenants has an equal interest in the whole property for the duration of the tenancy, irrespective of unequal contributions at its creation. On the death of one of 2 joint tenants, the survivor becomes the sole owner; on the death of one of 3 or more joint tenants, the survivors are joint tenants of the entire interest, except that if. If a survivor disclaims under s. 701.27 (2) (b) 1. 854.13 (2) (b), the joint tenancy is severed as of the date of death with respect to the disclaimed interest.

AB720, s. 14 Section 14. 700.17 (2) (am) of the statutes is created to read:

AB720,7,18 700.17 (2) (am) Survivorship under par. (a) is governed by s. 854.03 (2).

AB720, s. 15 Section 15. 700.17 (2) (b) 1. of the statutes is renumbered 700.17 (2) (b) and amended to read:

AB720,7,25 700.17 (2) (b) If a joint tenant unlawfully and intentionally kills another joint tenant of the same property, the disposition of the deceased joint tenant's interest in the joint tenancy is severed so that the interest of the decedent passes as the decedent's property and the killer has no right of survivorship as to that property governed by s. 854.14.

AB720, s. 16 Section 16. 700.17 (2) (b) 2. of the statutes is repealed.

AB720, s. 17 Section 17. 700.26 of the statutes is created to read:

AB720,8,4 700.26 Applicability of general transfers at death provisions. Chapter 854 applies to a transfer at death under an instrument of transfer.

AB720, s. 18 Section 18. 701.115 of the statutes is created to read:

AB720,8,11 701.115 Future interests in revocable trusts. (1) Unless a contrary intention is found, if a person has a future interest in property under a revocable trust and, under the terms of the trust, the person has the right to possession and enjoyment of the property at the grantor's death, the right to possession and enjoyment is contingent on the person's surviving the grantor. Extrinsic evidence may be used to show contrary intent.

AB720,8,12 (2) Survivorship under sub. (1) is governed by s. 854.03.

AB720,8,14 (3) The rights of the issue of a predeceasing beneficiary under sub. (1) are governed by s. 854.06.

AB720, s. 19 Section 19. 701.20 (5) (b) 1. of the statutes is amended to read:

AB720,8,25 701.20 (5) (b) 1. To legatees and devisees of specific property other than money, the income from the property bequeathed or devised to them less the following recurrent and other ordinary expenses attributable to the specific property: property taxes (excluding taxes prorated to the date of death), interest (excluding interest accrued to the date of death), income taxes (excluding taxes on income in respect of a decedent, capital gains and any other income taxes chargeable against principal) which accrue during the period of administration, ordinary repairs, and other expenses of management and operation of the property. For the purpose of this subdivision, property elected by a surviving spouse under s. 861.02 (1) is a bequest or devise to the surviving spouse.

AB720, s. 20 Section 20. 701.25 of the statutes is created to read:

AB720,9,3 701.25 Applicability of general transfers at death provisions. Chapter 854 applies to transfers at death under trust instruments.

AB720, s. 21 Section 21. 701.26 of the statutes is created to read:

AB720,9,6 701.26 Disclaimers of nonprobate transfers at death. A person may disclaim, under s. 854.13, any of the following:

AB720,9,7 (1) An interest in a joint tenancy, upon the death of another joint tenant.

AB720,9,9 (2) An interest in survivorship marital property, upon the death of the other spouse.

AB720,9,11 (3) An interest that is created by a nontestamentary instrument and transferred at death, upon the death that causes the transfer.

AB720, s. 22 Section 22. 701.27 (title) of the statutes is renumbered 854.13 (title) and amended to read:

AB720,9,15 854.13 (title) Disclaimer of transfers under nontestamentary instruments.

AB720, s. 23 Section 23. 701.27 (1) (intro.) of the statutes is renumbered 854.13 (1) (intro.).

AB720, s. 24 Section 24. 701.27 (1) (a) of the statutes is renumbered 854.13 (1) (a) and amended to read:

AB720,9,21 854.13 (1) (a) "Beneficiary under a nontestamentary governing instrument" includes any person who receives or might receive property or an interest in property under the terms or legal effect of a nontestamentary governing instrument.

AB720, s. 25 Section 25. 701.27 (1) (b) of the statutes is repealed.

AB720, s. 26 Section 26. 701.27 (1) (c) of the statutes is renumbered 854.13 (1) (c) and amended to read:

AB720,9,25 854.13 (1) (c) "Power" has the meaning designated given in s. 702.01 (4).

AB720, s. 27 Section 27. 701.27 (1) (d) of the statutes is repealed.

AB720, s. 28 Section 28. 701.27 (2) (title) of the statutes is renumbered 854.13 (2) (title).

AB720, s. 29 Section 29. 701.27 (2) (a) of the statutes is renumbered 854.13 (2) (a) and amended to read:

AB720,10,13 854.13 (2) (a) In general. A person who is a an heir, recipient of property or beneficiary under a nontestamentary governing instrument, person succeeding to a disclaimed interest created by a nontestamentary instrument, donee of a power created by nontestamentary a governing instrument, appointee under a power exercised by nontestamentary a governing instrument or, taker in default under a power created by nontestamentary a governing instrument, or person succeeding to disclaimed property may disclaim any property or interest in property, including contingent or future interests or the right to receive discretionary distributions, by delivering a written instrument of disclaimer under this section.

AB720, s. 30 Section 30. 701.27 (2) (b) (title) of the statutes is renumbered 854.13 (2) (b) (title).

AB720, s. 31 Section 31. 701.27 (2) (b) 1. of the statutes is renumbered 854.13 (2) (b) and amended to read:

AB720,10,23 854.13 (2) (b) Upon the death of a joint tenant that occurs on or after June 7, 1996, a surviving joint tenant may disclaim any property or interest in property that would otherwise accrue to him or her by right of survivorship and that is the subject of the joint tenancy. A surviving joint tenant may disclaim the entire interest if he or she fulfills the requirements under section 2518 of the internal revenue code by delivering a written instrument of disclaimer under this section.

AB720, s. 32 Section 32. 701.27 (2) (b) 2. of the statutes is repealed.

AB720, s. 33 Section 33. 701.27 (2) (bm) of the statutes is renumbered 854.13 (2) (c).

AB720, s. 34 Section 34. 701.27 (2) (c) of the statutes is renumbered 854.13 (2) (d) and amended to read:

AB720,11,7 854.13 (2) (d) Partial disclaimer. Property may be disclaimed in whole or in part, except that a partial disclaimer of property passing by nontestamentary a governing instrument or by the exercise of a power may not be made if partial disclaimer is expressly prohibited by the governing instrument or by the instrument exercising the power.

AB720, s. 35 Section 35. 701.27 (2) (d) of the statutes is renumbered 854.13 (2) (e).

AB720, s. 36 Section 36. 701.27 (2) (e) of the statutes is renumbered 854.13 (2) (h) and amended to read:

AB720,11,16 854.13 (2) (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 interested persons interested in the disclaimed property, if the personal representative or special administrator has not taken any action which would bar the right to disclaim under sub. (7) (11).

AB720, s. 37 Section 37. 701.27 (3) (title) of the statutes is renumbered 854.13 (3) (title).

AB720, s. 38 Section 38. 701.27 (3) (a) (intro.) of the statutes is renumbered 854.13 (3) (intro.) and amended to read:

AB720,11,20 854.13 (3) (intro.) The instrument of disclaimer shall do all of the following:

AB720, s. 39 Section 39. 701.27 (3) (a) 1. of the statutes is renumbered 854.13 (3) (a) and amended to read:

AB720,11,23 854.13 (3) (a) Describe the property or interest disclaimed;.

AB720, s. 40 Section 40. 701.27 (3) (a) 2. of the statutes is renumbered 854.13 (3) (b) and amended to read:

AB720,12,1 854.13 (3) (b) Declare the disclaimer and the extent of the disclaimer;.

AB720, s. 41 Section 41. 701.27 (3) (a) 3. of the statutes is renumbered 854.13 (3) (c) and amended to read:

AB720,12,4 854.13 (3) (c) Be signed by the disclaimant; and.

AB720, s. 42 Section 42. 701.27 (3) (a) 4. of the statutes is renumbered 854.13 (3) (d).