LRB-4655/1
CMH:jld:pg
2005 - 2006 LEGISLATURE
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
1An Act to repeal 854.03 (7), 854.06 (1) (b), 854.13 (7) (b), 854.13 (11) (title),
2854.14 (1), 854.21 (1) (a) 1., 2. and 3., 861.04 (2), 861.21 (3), 861.31 (1c), 861.33
3(1) (c) and 861.35 (1c);
to renumber 701.06 (6), 701.115 (1), 766.62 (4), 853.32
4(1), 854.13 (2) (a), 854.15 (5) (intro.) and 854.15 (5) (a), (b), (c), (d) and (e);
to
5renumber and amend 701.26, 705.04 (2), 705.28 (3), 766.31 (3), 766.31 (6),
6852.01 (1) (a) 2., 853.03 (2), 853.11 (2), 853.18 (1), 853.25 (2), 853.32 (2) (b),
7854.01, 854.03 (5), 854.05 (5), 854.06 (4) (a), 854.06 (4) (b), 854.08 (5), 854.08 (6)
8(a) 1., 854.13 (10), 854.13 (11) (a), 854.13 (11) (b), 854.15 (1) (e), 854.15 (5) (f),
9854.20 (1), 854.20 (2) (intro.), 854.20 (2) (a), 854.20 (2) (b), 854.20 (3), 854.20 (4),
10854.21 (1) (a) (intro.), 857.03 (2) and 861.01 (3);
to consolidate, renumber
11and amend 854.08 (6) (a) (intro.) and 2.;
to amend 30.541 (3) (d) 2. d., 71.05
12(6) (a) 16., 71.05 (6) (b) 12., 71.05 (12) (d), 101.9211 (4) (b) 4., 342.17 (4) (b) 4.,
13700.11 (1), 700.13 (2), 701.06 (7), 701.06 (8), 701.115 (2), 701.115 (3), 701.20 (5)
14(c), 701.24 (title) and (1), 701.26 (title), 702.03 (1), 702.08, 705.06 (1) (c), 705.06
1(2), 705.27, 766.61 (7), 766.62 (2), 766.62 (5) (intro.), 767.266 (1) (b), 851.21 (1)
2(b), 851.31, 851.50, 852.01 (1) (b), 852.05 (title), 852.05 (1) (intro.), 852.05 (2),
3852.05 (3), 852.12, 853.11 (3), 853.11 (6) (c), 853.11 (6) (d), 853.32 (2) (a), 854.03
4(2) (b), 854.04 (1) (a), 854.04 (3) (a), 854.04 (4), 854.04 (5) (intro.), 854.04 (5) (b),
5854.04 (6), 854.07 (3), 854.07 (4), 854.09 (3), 854.11 (4), 854.13 (title), 854.13 (2)
6(h), 854.13 (4) (c), 854.13 (7) (title), 854.13 (7) (a), 854.13 (8), 854.13 (9), 854.13
7(12) (b), 854.14 (5) (a), 854.14 (5) (b), 854.14 (5) (c), 854.17, 854.18 (1) (a) (intro.),
8854.18 (3), 854.20 (5), 854.21 (1) (b), 854.21 (7), 854.22 (4), 854.23 (1), 856.05 (5),
9856.15 (1), 856.17, 859.01, subchapter II (title) of chapter 861 [precedes
10861.018], 861.02 (title), 861.02 (2) (b) (intro.), 861.02 (4), 861.02 (6), 861.02 (7)
11(b), 861.05 (1) (c), 861.05 (2) (title), 861.06 (title), 861.06 (2) (title), 861.06 (2) (b)
12(intro.), 861.06 (2) (b) 4. a., 861.07 (2) (intro.), 861.10 (1), 861.10 (2), 861.11 (2)
13(a) (intro.), 861.11 (2) (b), 861.11 (5) (b), 861.17 (3), 861.20 (2), 861.21 (1) (a),
14861.21 (2), 861.21 (4), 861.21 (5), 861.31 (1m), 861.31 (2), 861.31 (4) (intro.),
15861.31 (4) (a), 861.33 (title), 861.33 (1) (a) (intro.), 861.33 (1) (b), 861.33 (2),
16861.33 (3), 861.33 (4), 861.35 (title), 861.35 (1m) (intro.), 861.35 (1m) (a), 861.35
17(1m) (b), 861.35 (1m) (c), 861.35 (2), 861.35 (3) (a), 861.35 (4) (intro.), 861.35 (4)
18(a), 863.08, 863.15, 865.07 (1) (d), 867.01 (3) (am) 2., 867.02 (2) (am) 3., 867.03
19(1g) (intro.), 867.03 (1g) (b), 867.03 (1m) (a), 867.03 (1m) (b), 867.03 (2), 867.035
20(1) (a) 4., 867.045 (1) (intro.), 867.045 (2), 867.045 (4), 867.046 (1m), 867.046 (2)
21(intro.) and 879.09;
to repeal and recreate 701.19 (10), 853.04 (3), 854.08 (5)
22(title), 854.13 (10) (title), 856.16 and 861.02 (8);
to create 700.27, 701.06 (6) (b),
23(c) and (d), 701.115 (1) (a), 701.24 (3), 701.26 (1) (d), 701.26 (2), 705.04 (2) (a),
24705.04 (2) (d), 705.04 (2) (e), 705.04 (2) (f) and (g), 705.20 (4), 705.28 (2m), 766.31
25(1) (title), 766.31 (2) (title), 766.31 (3) (b), 766.31 (4) (title), 766.31 (5) (title),
1766.31 (6) (title), 766.31 (6) (b), 766.31 (7) (title), 766.31 (7p) (title), 766.31 (8)
2(title), 766.31 (9) (title), 766.31 (10) (title), 766.62 (4) (b), 766.62 (4) (c), 851.055
3(1m), 852.01 (1) (a) 2. b., 853.03 (2) (bm), 853.11 (2m), 853.18 (1) (a), (b) and (c),
4853.25 (2) (a) 1. and 2., 853.32 (1) (bm), 853.32 (2) (am), 854.01 (1), 854.03 (5)
5(am) 7., 854.03 (5) (am) 8., 854.03 (5) (bm), 854.06 (4) (a) 1., 854.08 (5) (a), 854.08
6(5) (d), 854.12, 854.13 (2) (a) 1., 854.13 (2) (gm), 854.13 (2) (i), 854.13 (7) (bm)
7and (c), 854.13 (10) (b), 854.14 (3m), 854.20 (2) (am) 2. b. and c., 857.03 (2m),
8859.02 (2m), 861.01 (3m), 861.01 (4), 861.01 (5), 861.04 (2m), 861.05 (1) (e),
9861.05 (2m), 861.06 (6), 867.03 (2g), 867.046 (2) (k), 880.61 (11m) and 880.675
10(1m) of the statutes; and
to affect 1997 Wisconsin Act 188, section
233 (1);
11relating to: miscellaneous remedial modifications to the Wisconsin Probate
12Code.
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
13Section
1. 30.541 (3) (d) 2. d. of the statutes is amended to read:
AB1038,3,1714
30.541
(3) (d) 2. d. The limit in subd. 2. c. does not apply if the surviving spouse
15proceeds under s. 867.03 (1g) and the total value of the decedent's
solely owned 16property
subject to administration in the state, including boats transferred under
17this subdivision, does not exceed
$20,000 $50,000.
AB1038, s. 2
1Section
2. 71.05 (6) (a) 16. of the statutes is amended to read:
AB1038,4,42
71.05
(6) (a) 16. Any amount recognized as a loss under section
1001 (c) of the
3internal revenue code Internal Revenue Code if a surviving spouse and a distributee
4exchange their interests in marital property under s.
857.03 (2) 766.31 (3) (b).
AB1038, s. 3
5Section
3. 71.05 (6) (b) 12. of the statutes is amended to read:
AB1038,4,86
71.05
(6) (b) 12. Any amount recognized as a gain under section
1001 (c) of the
7internal revenue code Internal Revenue Code if a surviving spouse and a distributee
8exchange their interests in marital property under s.
857.03 (2) 766.31 (3) (b).
AB1038, s. 4
9Section
4. 71.05 (12) (d) of the statutes is amended to read:
AB1038,4,1110
71.05
(12) (d) Property exchanged under s.
857.03 (2) 766.31 (3) (b) shall be
11treated as if acquired by gift for the determination of basis.
AB1038, s. 5
12Section
5. 101.9211 (4) (b) 4. of the statutes is amended to read:
AB1038,4,1613
101.9211
(4) (b) 4. The limit in subd. 3. does not apply if the surviving spouse
14is proceeding under s. 867.03 (1g) and the total value of the decedent's
solely owned 15property
subject to administration in the state, including the manufactured homes
16transferred under this paragraph, does not exceed
$10,000 $50,000.
AB1038, s. 6
17Section
6. 342.17 (4) (b) 4. of the statutes is amended to read:
AB1038,4,2118
342.17
(4) (b) 4. The limit in subd. 3. does not apply if the surviving spouse is
19proceeding under s. 867.03 (1g) and the total value of the decedent's
solely owned 20property
subject to administration in the state, including the vehicles transferred
21under this paragraph, does not exceed
$20,000 $50,000.
AB1038, s. 7
22Section
7. 700.11 (1) of the statutes is amended to read:
AB1038,5,423
700.11
(1) If a statute
, inter vivos governing instrument, as defined in s. 700.27
24(1) (c), or governing instrument, as defined in s. 854.01
(2), specifies that property
25is to be distributed to, or a future interest is to be created in, a designated individual's
1"heirs
",," "heirs at law
",," "next of kin
",
," "relatives
" or," "family
," or a term that has
2a similar meaning, or if a class gift in favor of "descendants
",," "issue
," or "heirs of the
3body" does not specify the manner in which the property is to be distributed among
4the class members, the property is distributed according to s. 854.22.
AB1038, s. 8
5Section
8. 700.13 (2) of the statutes is amended to read:
AB1038,5,86
700.13
(2) Unless the instrument of transfer manifests a contrary intent, The
7effect of a renunciation or release of an interest for life or years
accelerates
8succeeding interests is as provided in ss. 700.27 (8) and 854.13 (10).
AB1038, s. 9
9Section
9. 700.27 of the statutes is created to read:
AB1038,5,10
10700.27 Disclaimer of transfers during life. (1) Definitions. In this section:
AB1038,5,1311
(a) "Beneficiary under an inter vivos governing instrument" includes any
12person who receives or might receive property under the terms or legal effect of an
13inter vivos governing instrument.
AB1038,5,1414
(b) "Extrinsic evidence" has the meaning given in s. 854.01 (1).
AB1038,5,1515
(c) "Inter vivos governing instrument":
AB1038,5,1916
1. Means a gratuitous deed, inter vivos trust instrument, insurance policy,
17contract, inter vivos instrument that creates or exercises a power of appointment, or
18any other dispositive, appointive, or nominative instrument that transfers property
19other than a governing instrument as defined in s. 854.01 (2).
AB1038,5,2020
2. Includes an inter vivos gift that is not subject to a written instrument.
AB1038,5,2121
(d) "Power" has the meaning given in s. 702.01 (4).
AB1038,5,23
22(2) Right to disclaim. (a)
In general. 1. In this paragraph, "person" includes
23a person who is unborn or whose identity is unascertained.
AB1038,6,624
2. A person who is a recipient of property or beneficiary under an inter vivos
25governing instrument, donee of a power created by an inter vivos governing
1instrument, appointee under a power exercised by an inter vivos governing
2instrument, taker in default under a power created by an inter vivos governing
3instrument, or person succeeding to disclaimed property created by an inter vivos
4governing instrument may disclaim any property, including contingent or future
5interests or the right to receive discretionary distributions, by delivering a written
6instrument of disclaimer under this section.
AB1038,6,117
(b)
Partial disclaimer. Property transferred under an inter vivos governing
8instrument may be disclaimed in whole or in part, except that a partial disclaimer
9of property passing by an inter vivos governing instrument or by the exercise of a
10power may not be made if partial disclaimer is expressly prohibited by the inter vivos
11governing instrument or by the instrument exercising the power.
AB1038,6,1412
(c)
Spendthrift provision. The right to disclaim exists notwithstanding any
13limitation on the interest of the disclaimant in the nature of a spendthrift provision
14or similar restriction.
AB1038,6,1715
(d)
Disclaimer by a guardian or conservator. A guardian of the estate or a
16conservator appointed under ch. 880 may disclaim on behalf of his or her ward, with
17court approval, if the ward is entitled to disclaim under this section.
AB1038,6,2018
(e)
Disclaimer by an agent under power of attorney. An agent under a power
19of attorney may disclaim on behalf of the person who granted the power of attorney
20if all of the following apply:
AB1038,6,2221
1. The person who granted the power of attorney is entitled to disclaim under
22this section.
AB1038,6,2323
2. The power of attorney specifically grants the power to disclaim.
AB1038,7,324
(f)
Disclaimer by trustee. The trustee of a trust named as a recipient of property
25under an inter vivos governing instrument may disclaim that property on behalf of
1the trust if the trust authorizes disclaimer by the trustee. If the trust does not
2authorize disclaimer by the trustee, the trustee's power to disclaim is subject to the
3approval of the court.
AB1038,7,94
(g)
After death. A person's right to disclaim survives the person's death and
5may be exercised by the person's personal representative or special administrator
6upon receiving approval from the court having jurisdiction of the person's estate after
7hearing upon notice to all persons interested in the disclaimed property, if the
8personal representative or special administrator has not taken any action that would
9bar the right to disclaim under sub. (9).
AB1038,7,1210
(h)
Disclaimers of transfers at death. A person who is a recipient of property
11under a governing instrument, as defined in s. 854.01 (2), may disclaim the property
12as provided in s. 854.13.
AB1038,7,14
13(3) Instrument of disclaimer. The instrument of disclaimer must meet the
14provisions of subs. (4) and (5) and s. 854.13 (3) (a) to (c).
AB1038,7,20
15(4) Time for effective disclaimer. (a)
Present interest. An instrument
16disclaiming a present interest shall be executed and delivered not later than 9
17months after the effective date of the transfer under the inter vivos governing
18instrument. For cause shown, the period may be extended by a court of competent
19jurisdiction, either within or after the 9-month period, for such additional time as
20the court considers just.
AB1038,8,221
(b)
Future interest. An instrument disclaiming a future interest shall be
22executed and delivered not later than 9 months after the event that determines that
23the taker of the property is finally ascertained and his or her interest indefeasibly
24fixed. For cause shown, the period may be extended by a court of competent
1jurisdiction, either within or after the 9-month period, for such additional time as
2the court considers just.
AB1038,8,63
(c)
Future right to income or principal. Notwithstanding pars. (a) and (b), an
4instrument disclaiming the future right to receive discretionary or mandatory
5distributions of income or principal from any source may be executed and delivered
6at any time.
AB1038,8,97
(d)
Persons under 21. Notwithstanding pars. (a) and (b), a person under 21
8years of age may disclaim at any time not later than 9 months after the date on which
9the person attains 21 years of age.
AB1038,8,1410
(e)
Interests arising by disclaimer. Notwithstanding pars. (a) and (b), a person
11whose interest in property arises by disclaimer or by default of exercise of a power
12created by an inter vivos governing instrument may disclaim at any time not later
13than 9 months after the day on which the prior instrument of disclaimer is delivered,
14or the date on which the donee's power lapses.
AB1038,8,18
15(5) Delivery and filing of disclaimer. (a)
Delivery. In addition to any
16requirements imposed by the inter vivos governing instrument, the instrument of
17disclaimer is effective only if, within the time specified under sub. (4), it is delivered
18to and received by any of the following:
AB1038,8,1919
1. The transferor of the property disclaimed.
AB1038,8,2020
2. The transferor's legal representative.
AB1038,8,2121
3. The holder of legal title to the property.
AB1038,9,222
(b)
Delivery to trustee. If the trustee of any trust to which the interest or power
23relates does not receive the instrument of disclaimer under par. (a), a copy shall also
24be delivered to the trustee. Failure to deliver a copy of the instrument of disclaimer
1to the trustee within the time specified under sub. (4) does not affect the validity of
2any disclaimer.
AB1038,9,53
(c)
Recording. If real property or an interest in real property is disclaimed, a
4copy of the instrument of disclaimer may be recorded in the office of the register of
5deeds of the county in which the real estate is situated.
AB1038,9,7
6(6) Property not vested. The property disclaimed under this section shall be
7considered not to have been vested in, created in, or transferred to the disclaimant.
AB1038,9,19
8(7) Devolution. (a)
In general. Subject to sub. (8), unless the inter vivos
9governing instrument provides otherwise, either expressly or as construed from
10extrinsic evidence, the disclaimed property devolves as if the disclaimant had died
11before the effective date of the transfer under the inter vivos governing instrument.
12If the disclaimed interest is a remainder contingent on surviving to the time of
13distribution, the disclaimed interest passes as if the disclaimant had died
14immediately before the time for distribution. If the disclaimant is an appointee
15under a power exercised by an inter vivos governing instrument, the disclaimed
16property devolves as if the disclaimant had died before the effective date of the
17exercise of the power. If the disclaimant is a taker in default under a power created
18by an inter vivos governing instrument, the disclaimed property devolves as if the
19disclaimant had predeceased the donee of the power.
AB1038,9,2520
(b)
Devolution to issue of the disclaimants. Unless the inter vivos governing
21instrument provides otherwise, either expressly or as construed from extrinsic
22evidence, if, by law or under the inter vivos governing instrument, the issue of the
23disclaimant would share in the disclaimed interest by any method of representation
24had the disclaimant died before the time the disclaimed interest would have taken
25effect in possession or enjoyment, the disclaimed interest passes only to the issue of
1the disclaimant who survive when the disclaimed interest takes effect in possession
2or enjoyment.