AB1038: Bill Text

LRB-4655/1

CMH:jld:pg

2005 - 2006 LEGISLATURE

2005 Assembly BILL 1038

February 20, 2006 - Introduced by Representatives Hundertmark, Richards, J. Fitzgerald and Cullen, cosponsored by Senators Kanavas and Risser. Referred to Committee on Financial Institutions.

AB1038,3,12 An Act to repeal 854.03 (7), 854.06 (1) (b), 854.13 (7) (b), 854.13 (11) (title), 854.14 (1), 854.21 (1) (a) 1., 2. and 3., 861.04 (2), 861.21 (3), 861.31 (1c), 861.33 (1) (c) and 861.35 (1c); to renumber 701.06 (6), 701.115 (1), 766.62 (4), 853.32 (1), 854.13 (2) (a), 854.15 (5) (intro.) and 854.15 (5) (a), (b), (c), (d) and (e); to renumber and amend 701.26, 705.04 (2), 705.28 (3), 766.31 (3), 766.31 (6), 852.01 (1) (a) 2., 853.03 (2), 853.11 (2), 853.18 (1), 853.25 (2), 853.32 (2) (b), 854.01, 854.03 (5), 854.05 (5), 854.06 (4) (a), 854.06 (4) (b), 854.08 (5), 854.08 (6) (a) 1., 854.13 (10), 854.13 (11) (a), 854.13 (11) (b), 854.15 (1) (e), 854.15 (5) (f), 854.20 (1), 854.20 (2) (intro.), 854.20 (2) (a), 854.20 (2) (b), 854.20 (3), 854.20 (4), 854.21 (1) (a) (intro.), 857.03 (2) and 861.01 (3); to consolidate, renumber and amend 854.08 (6) (a) (intro.) and 2.; to amend 30.541 (3) (d) 2. d., 71.05 (6) (a) 16., 71.05 (6) (b) 12., 71.05 (12) (d), 101.9211 (4) (b) 4., 342.17 (4) (b) 4., 700.11 (1), 700.13 (2), 701.06 (7), 701.06 (8), 701.115 (2), 701.115 (3), 701.20 (5) (c), 701.24 (title) and (1), 701.26 (title), 702.03 (1), 702.08, 705.06 (1) (c), 705.06 (2), 705.27, 766.61 (7), 766.62 (2), 766.62 (5) (intro.), 767.266 (1) (b), 851.21 (1) (b), 851.31, 851.50, 852.01 (1) (b), 852.05 (title), 852.05 (1) (intro.), 852.05 (2), 852.05 (3), 852.12, 853.11 (3), 853.11 (6) (c), 853.11 (6) (d), 853.32 (2) (a), 854.03 (2) (b), 854.04 (1) (a), 854.04 (3) (a), 854.04 (4), 854.04 (5) (intro.), 854.04 (5) (b), 854.04 (6), 854.07 (3), 854.07 (4), 854.09 (3), 854.11 (4), 854.13 (title), 854.13 (2) (h), 854.13 (4) (c), 854.13 (7) (title), 854.13 (7) (a), 854.13 (8), 854.13 (9), 854.13 (12) (b), 854.14 (5) (a), 854.14 (5) (b), 854.14 (5) (c), 854.17, 854.18 (1) (a) (intro.), 854.18 (3), 854.20 (5), 854.21 (1) (b), 854.21 (7), 854.22 (4), 854.23 (1), 856.05 (5), 856.15 (1), 856.17, 859.01, subchapter II (title) of chapter 861 [precedes 861.018], 861.02 (title), 861.02 (2) (b) (intro.), 861.02 (4), 861.02 (6), 861.02 (7) (b), 861.05 (1) (c), 861.05 (2) (title), 861.06 (title), 861.06 (2) (title), 861.06 (2) (b) (intro.), 861.06 (2) (b) 4. a., 861.07 (2) (intro.), 861.10 (1), 861.10 (2), 861.11 (2) (a) (intro.), 861.11 (2) (b), 861.11 (5) (b), 861.17 (3), 861.20 (2), 861.21 (1) (a), 861.21 (2), 861.21 (4), 861.21 (5), 861.31 (1m), 861.31 (2), 861.31 (4) (intro.), 861.31 (4) (a), 861.33 (title), 861.33 (1) (a) (intro.), 861.33 (1) (b), 861.33 (2), 861.33 (3), 861.33 (4), 861.35 (title), 861.35 (1m) (intro.), 861.35 (1m) (a), 861.35 (1m) (b), 861.35 (1m) (c), 861.35 (2), 861.35 (3) (a), 861.35 (4) (intro.), 861.35 (4) (a), 863.08, 863.15, 865.07 (1) (d), 867.01 (3) (am) 2., 867.02 (2) (am) 3., 867.03 (1g) (intro.), 867.03 (1g) (b), 867.03 (1m) (a), 867.03 (1m) (b), 867.03 (2), 867.035 (1) (a) 4., 867.045 (1) (intro.), 867.045 (2), 867.045 (4), 867.046 (1m), 867.046 (2) (intro.) and 879.09; to repeal and recreate 701.19 (10), 853.04 (3), 854.08 (5) (title), 854.13 (10) (title), 856.16 and 861.02 (8); to create 700.27, 701.06 (6) (b), (c) and (d), 701.115 (1) (a), 701.24 (3), 701.26 (1) (d), 701.26 (2), 705.04 (2) (a), 705.04 (2) (d), 705.04 (2) (e), 705.04 (2) (f) and (g), 705.20 (4), 705.28 (2m), 766.31 (1) (title), 766.31 (2) (title), 766.31 (3) (b), 766.31 (4) (title), 766.31 (5) (title), 766.31 (6) (title), 766.31 (6) (b), 766.31 (7) (title), 766.31 (7p) (title), 766.31 (8) (title), 766.31 (9) (title), 766.31 (10) (title), 766.62 (4) (b), 766.62 (4) (c), 851.055 (1m), 852.01 (1) (a) 2. b., 853.03 (2) (bm), 853.11 (2m), 853.18 (1) (a), (b) and (c), 853.25 (2) (a) 1. and 2., 853.32 (1) (bm), 853.32 (2) (am), 854.01 (1), 854.03 (5) (am) 7., 854.03 (5) (am) 8., 854.03 (5) (bm), 854.06 (4) (a) 1., 854.08 (5) (a), 854.08 (5) (d), 854.12, 854.13 (2) (a) 1., 854.13 (2) (gm), 854.13 (2) (i), 854.13 (7) (bm) and (c), 854.13 (10) (b), 854.14 (3m), 854.20 (2) (am) 2. b. and c., 857.03 (2m), 859.02 (2m), 861.01 (3m), 861.01 (4), 861.01 (5), 861.04 (2m), 861.05 (1) (e), 861.05 (2m), 861.06 (6), 867.03 (2g), 867.046 (2) (k), 880.61 (11m) and 880.675 (1m) of the statutes; and to affect 1997 Wisconsin Act 188, section 233 (1); relating to: miscellaneous remedial modifications to the Wisconsin Probate Code.

Analysis by the Legislative Reference Bureau

This bill makes remedial modifications to current law and primarily corrects technical errors and clarifies various provisions in 1997 Wisconsin Act 188, which modernized the Wisconsin Probate Code. This bill continues the process of extending various interpretative rules from probate to nonprobate assets and of allowing extrinsic evidence to be used when interpreting the intent of the transferor, especially with respect to rules of construction. This bill also creates additional protections for a decedent spouse who is murdered by the surviving spouse.

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

AB1038, s. 1 Section 1. 30.541 (3) (d) 2. d. of the statutes is amended to read:

AB1038,3,17 30.541 (3) (d) 2. d. The limit in subd. 2. c. does not apply if the surviving spouse proceeds under s. 867.03 (1g) and the total value of the decedent's solely owned property subject to administration in the state, including boats transferred under this subdivision, does not exceed $20,000 $50,000.

AB1038, s. 2 Section 2. 71.05 (6) (a) 16. of the statutes is amended to read:

AB1038,4,4 71.05 (6) (a) 16. Any amount recognized as a loss under section 1001 (c) of the internal revenue code Internal Revenue Code if a surviving spouse and a distributee exchange their interests in marital property under s. 857.03 (2) 766.31 (3) (b).

AB1038, s. 3 Section 3. 71.05 (6) (b) 12. of the statutes is amended to read:

AB1038,4,8 71.05 (6) (b) 12. Any amount recognized as a gain under section 1001 (c) of the internal revenue code Internal Revenue Code if a surviving spouse and a distributee exchange their interests in marital property under s. 857.03 (2) 766.31 (3) (b).

AB1038, s. 4 Section 4. 71.05 (12) (d) of the statutes is amended to read:

AB1038,4,11 71.05 (12) (d) Property exchanged under s. 857.03 (2) 766.31 (3) (b) shall be treated as if acquired by gift for the determination of basis.

AB1038, s. 5 Section 5. 101.9211 (4) (b) 4. of the statutes is amended to read:

AB1038,4,16 101.9211 (4) (b) 4. The limit in subd. 3. does not apply if the surviving spouse is proceeding under s. 867.03 (1g) and the total value of the decedent's solely owned property subject to administration in the state, including the manufactured homes transferred under this paragraph, does not exceed $10,000 $50,000.

AB1038, s. 6 Section 6. 342.17 (4) (b) 4. of the statutes is amended to read:

AB1038,4,21 342.17 (4) (b) 4. The limit in subd. 3. does not apply if the surviving spouse is proceeding under s. 867.03 (1g) and the total value of the decedent's solely owned property subject to administration in the state, including the vehicles transferred under this paragraph, does not exceed $20,000 $50,000.

AB1038, s. 7 Section 7. 700.11 (1) of the statutes is amended to read:

AB1038,5,4 700.11 (1) If a statute, inter vivos governing instrument, as defined in s. 700.27 (1) (c), or governing instrument, as defined in s. 854.01 (2), 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.

AB1038, s. 8 Section 8. 700.13 (2) of the statutes is amended to read:

AB1038,5,8 700.13 (2) Unless the instrument of transfer manifests a contrary intent, The effect of a renunciation or release of an interest for life or years accelerates succeeding interests is as provided in ss. 700.27 (8) and 854.13 (10).

AB1038, s. 9 Section 9. 700.27 of the statutes is created to read:

AB1038,5,10 700.27 Disclaimer of transfers during life. (1) Definitions. In this section:

AB1038,5,13 (a) "Beneficiary under an inter vivos governing instrument" includes any person who receives or might receive property under the terms or legal effect of an inter vivos governing instrument.

AB1038,5,14 (b) "Extrinsic evidence" has the meaning given in s. 854.01 (1).

AB1038,5,15 (c) "Inter vivos governing instrument":

AB1038,5,19 1. Means a gratuitous deed, inter vivos trust instrument, insurance policy, contract, inter vivos instrument that creates or exercises a power of appointment, or any other dispositive, appointive, or nominative instrument that transfers property other than a governing instrument as defined in s. 854.01 (2).

AB1038,5,20 2. Includes an inter vivos gift that is not subject to a written instrument.

AB1038,5,21 (d) "Power" has the meaning given in s. 702.01 (4).

AB1038,5,23 (2) Right to disclaim. (a) In general. 1. In this paragraph, "person" includes a person who is unborn or whose identity is unascertained.

AB1038,6,6 2. A person who is a recipient of property or beneficiary under an inter vivos governing instrument, donee of a power created by an inter vivos governing instrument, appointee under a power exercised by an inter vivos governing instrument, taker in default under a power created by an inter vivos governing instrument, or person succeeding to disclaimed property created by an inter vivos governing instrument 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.

AB1038,6,11 (b) Partial disclaimer. Property transferred under an inter vivos governing instrument may be disclaimed in whole or in part, except that a partial disclaimer of property passing by an inter vivos governing instrument or by the exercise of a power may not be made if partial disclaimer is expressly prohibited by the inter vivos governing instrument or by the instrument exercising the power.

AB1038,6,14 (c) 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.

AB1038,6,17 (d) Disclaimer by a guardian or conservator. A guardian of the estate or a conservator appointed under ch. 880 may disclaim on behalf of his or her ward, with court approval, if the ward is entitled to disclaim under this section.

AB1038,6,20 (e) Disclaimer by an 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:

AB1038,6,22 1. The person who granted the power of attorney is entitled to disclaim under this section.

AB1038,6,23 2. The power of attorney specifically grants the power to disclaim.

AB1038,7,3 (f) Disclaimer by trustee. The trustee of a trust named as a recipient of property under an inter vivos 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.

AB1038,7,9 (g) 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. (9).

AB1038,7,12 (h) Disclaimers of transfers at death. A person who is a recipient of property under a governing instrument, as defined in s. 854.01 (2), may disclaim the property as provided in s. 854.13.

AB1038,7,14 (3) Instrument of disclaimer. The instrument of disclaimer must meet the provisions of subs. (4) and (5) and s. 854.13 (3) (a) to (c).

AB1038,7,20 (4) Time for effective disclaimer. (a) Present interest. An instrument disclaiming a present interest shall be executed and delivered not later than 9 months after the effective date of the transfer under the inter vivos governing instrument. For cause shown, the period may be extended by a court of competent jurisdiction, either within or after the 9-month period, for such additional time as the court considers just.

AB1038,8,2 (b) Future interest. An instrument disclaiming a future interest shall be executed and delivered not later than 9 months after the event that determines that the taker of the property is finally ascertained and his or her interest indefeasibly fixed. For cause shown, the period may be extended by a court of competent jurisdiction, either within or after the 9-month period, for such additional time as the court considers just.

AB1038,8,6 (c) Future right to income or principal. Notwithstanding pars. (a) and (b), an instrument disclaiming the future right to receive discretionary or mandatory distributions of income or principal from any source may be executed and delivered at any time.

AB1038,8,9 (d) Persons under 21. Notwithstanding pars. (a) and (b), a person under 21 years of age may disclaim at any time not later than 9 months after the date on which the person attains 21 years of age.