(3) Per capita at each generation. (a) Except as provided in subs. (5) and (6), if a statute or a governing instrument calls for property to be distributed to the issue or descendants of a designated person “per capita at each generation", the property is divided into equal shares at the generation nearest to the designated person that contains one or more surviving issue. Each survivor in that generation is allocated one share, and the shares of the deceased persons in that same generation who left surviving issue are combined for distribution under par. (b).
(b) The combined share created under par. (a) is divided among the surviving issue of the persons whose shares were combined in the same manner as under par. (a), as though all of those issue were the issue of one person. The process is repeated until the property is fully allocated.
(4) Per capita. Except as provided in sub. (6), if a statute or governing instrument calls for property to be distributed to a group or class “per capita", the property is divided into as many shares as there are surviving members of the group or class, and each member receives one share.
(5) Certain individuals disregarded. For the purposes of this section, all of the following apply:
(a) An individual who is deceased and who left no surviving issue is disregarded.
(b) An individual who has a surviving ancestor who is an issue of the designated person is not entitled to a share.
(6) Contrary intent. This section does not apply if the transfer is made under a governing instrument and there is a finding of contrary intent of the person who executed the governing instrument. Extrinsic evidence may be used to construe that intent.
854.05 No exoneration of encumbered property. (1) Definitions. In this section:
(a) “Debt" includes accrued interest on the debt.
(b) “Encumbrance" includes mortgages, liens, pledges and other security agreements that are encumbrances on property.
(2) Generally. (a) Except as provided in sub. (5), all property that is specifically transferred by a governing instrument shall be assigned to the transferee without exoneration of a debt that is secured by an encumbrance on the property.
(b) If the debt that is secured by the encumbrance on the property is paid in whole or in part out of other assets, the specifically transferred property shall be assigned to the transferee only if any of the following applies:
1. The transferee contributes to the person or entity that held the assets that were used to pay the debt an amount equal to the amount that was paid.
2. The person or entity secures the amount described in subd. 1. through a new encumbrance on the property.
(3) Joint tenancy; survivorship marital property. Except as provided in sub. (5), if all or part of a debt that is secured by an encumbrance on property in which the decedent at the time of death had an interest as a joint tenant or as a holder of survivorship marital property is paid out of other assets as the result of a claim being allowed, the person or entity that makes the payment is subrogated to all rights that the claimant had against the property.
(4) Insurance. Except as provided in sub. (5), if all or part of a debt that is secured by an encumbrance on the proceeds payable under a life insurance policy in which the decedent was the named insured is paid out of other assets as the result of a claim being allowed, the person or entity that makes the payment is subrogated to all rights that the claimant had against the proceeds.
(5) Contrary intent. This section does not apply to the extent that a governing instrument, either expressly or as construed from extrinsic evidence, provides otherwise. A general directive to pay debts does not give rise to a presumption of exoneration.
854.06 Predeceased transferee. (1) Definitions. In this section:
(a) “Provision in a governing instrument" includes all of the following:
1. A gift to an individual whether or not the individual is alive at the time of the execution of the instrument.
2. A share in a class gift only if a member of the class dies after the execution of the instrument.
3. An appointment by the decedent under any power of appointment, unless the issue who would take under this section could not have been appointees under the terms of the power.
(b) “Revocable provision" means a provision that the decedent had the power to change or revoke immediately before death.
(c) “Stepchild" means a child of the decedent's surviving, deceased or former spouse, and not of the decedent.
(2) Scope of coverage. This section applies to revocable provisions in a governing instrument executed by the decedent that provide for an outright transfer upon the death of the decedent to any of the following persons:
(a) A grandparent of the decedent, or issue of a grandparent, subject to s. 854.21.
(b) A stepchild of the decedent, subject to s. 854.15.
(3) Substitute gift to issue of covered transferee. Subject to sub. (4), if a transferee under a provision described in sub. (2) does not survive the decedent but has issue who do survive, the issue of the transferee take the transfer per stirpes, as provided in s. 854.04 (1).
(4) Contrary intent. (a) This section does not apply if there is a finding of contrary intent of the decedent. Extrinsic evidence may be used to construe that intent.
(b) If the governing instrument designates one or more persons, classes or groups of people as contingent transferees, those transferees take in preference to those under sub. (3). But if none of the contingent transferees survives, sub. (3) applies to the first group in the sequence of contingent transferees that has one or more transferees specified in sub. (2) who left surviving issue.
854.07 Failed transfer and residue. (1) Except as provided in sub. (4) and s. 854.06, if an attempted transfer under a governing instrument fails, the attempted transfer becomes part of the residue of the governing instrument. This subsection does not apply if the attempted transfer is itself a residuary transfer.
(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.
(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 decedent's probate estate.
(4) This section does not apply if there is a finding of contrary intent of the person who executed the governing instrument. Extrinsic evidence may be used to construe that intent.
854.08 Nonademption of specific gifts in certain cases. (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.
(2) Proceeds of sale. (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:
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.
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.
(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.
(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:
(a) Any insurance proceeds paid with respect to the property after the decedent's death, together with the incidents of the specific gift.
(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.
(4) Condemnation award. (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:
1. Any amount of the condemnation award unpaid at the time of death.
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.
(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).
(5) Sale or loss of property of an incompetent. Subject to sub. (6), if property that is the subject of a specific gift is sold by a guardian or conservator of the person who executed the governing instrument, or if a condemnation award or insurance proceeds are paid to a guardian or conservator, the specific beneficiary has the right to a general pecuniary transfer equivalent to the proceeds of the sale or the condemnation award, or the insurance proceeds, reduced by any amount expended or incurred to restore or repair the property if the funds are available under the governing instrument. This provision does not apply if the person who executed the governing instrument, subsequent to the sale or award or receipt of insurance proceeds, is adjudicated competent and survives such adjudication for a period of one year; but in such event a sale by a guardian or conservator within 2 years of that person's death is a sale by that person for purposes of sub. (2).
(6) Limitations. (a) This section is inapplicable if any of the following applies:
1. The governing instrument, either expressly or as construed from extrinsic evidence, shows the intent that a transfer fail under the particular circumstances.
2. 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. Extrinsic evidence may be used to construe that intent.
(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.
(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.
854.09 Advancement; satisfaction. (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:
(a) The governing instrument, if any, either expressly or as construed from extrinsic evidence, provides that the gift be taken into account.
(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.
(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.
(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.
(3) If the transferee fails to survive the person who executed the governing instrument, the gift is treated as a full or partial satisfaction of the transfer, unless the transferor has declared otherwise in a document, either expressly or as construed from extrinsic evidence.
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.
854.11 Gift of securities. (1)
Definition. In this section, “securities" includes all of the following:
(a) Any note, stock, treasury stock, bond, debenture, evidence of indebtedness, collateral trust certificate, transferable share or voting trust certificate.
(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.
(c) Any interest or instrument commonly known as a security.
(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).
(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:
(a) The additional securities were acquired after the governing instrument was executed.
(b) The additional securities were acquired as a result of ownership of the described securities.
(c) The additional securities are any of the following types:
1. Securities of the same organization acquired as a result of a plan of reinvestment.
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.
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.
(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".
(4) Contrary intent. This section does not apply if there is a finding of contrary intent of the person who executed the governing instrument. Extrinsic evidence may be used to construe that intent.
854.13 (2) (f) Disclaimer by 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.
(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:
1. The person who granted the power of attorney is entitled to disclaim under this section.
2. The power of attorney specifically grants the power to disclaim.
(8) Devolution of disclaimed interest in joint tenancy. A disclaimed interest in a joint tenancy passes to the decedent's probate estate.
(9) Devolution of disclaimed interest in survivorship marital property. A disclaimed interest in survivorship marital property passes to the decedent's probate estate.
(12) (b) Any disclaimer that meets the requirements of section 2518 of the Internal Revenue Code, or the requirements of any other federal law relating to disclaimers, constitutes an effective disclaimer under this section.
(13) Construction of effective date. In this section, the effective date of a transfer under a revocable governing instrument is the date on which the person with the power to revoke the transfer no longer has that power or the power to transfer the legal or equitable ownership of the property that is the subject of the transfer.
854.14 Beneficiary who kills decedent. (1) Definition. In this section, “disposition of property" means a transfer, including by appointment, of property or any other benefit to a beneficiary designated in a governing instrument or under a statute.
(2) Revocation of benefits. Except as provided in sub. (6), the unlawful and intentional killing of the decedent does all of the following:
(a) Revokes a provision in a governing instrument that, by reason of the decedent's death, does any of the following:
1. Transfers or appoints property to the killer.
2. Confers a power of appointment on the killer.
3. Nominates or appoints the killer to serve in any fiduciary or representative capacity, including personal representative, executor, trustee or agent.
(b) Severs the interests of the decedent and killer in property held by them as joint tenants with the right of survivorship or as survivorship marital property and transforms the interests of the decedent and the killer into tenancies in common or marital property, whichever is appropriate.
(c) Revokes every statutory right or benefit to which the killer may have been entitled by reason of the decedent's death.
