AB645: Bill Text

AB645,69,17 854.22 Form of distribution for transfers to family groups or classes. (1) Interests in heirs, next of kin and the like. Subject to sub. (4), if a statute or governing instrument specifies that property is to be distributed to, or that a future interest is to be created in, a designated individual's "heirs", "heirs at law", "next of kin", "relatives", "family" or a term that has a similar meaning, the property passes to the persons, including the state, to whom it would pass and in the shares in which it would pass under the laws of intestacy of the designated individual's domicile, if the designated individual had died immediately before the transfer was to take effect in possession or enjoyment. If the designated individual's surviving spouse is living and remarried when the transfer is to take effect in possession or enjoyment, the surviving spouse is not an heir of the designated individual.

AB645,69,25 (2) Transfers to descendants, issue and the like. Subject to sub. (4), if a statute or governing instrument creates a class gift in favor of a designated individual's "descendants", "issue" or "heirs of the body" but does not specify the manner in which the property is to be distributed among the class members, the property is distributed among the class members who are living when the interest is to take effect in possession or enjoyment in the shares that they would receive under the laws of intestacy of the designated individual's domicile, if the designated individual had then died owning the subject matter of the class gift.

AB645,70,6 (3) Doctrine of worthier title abolished. The doctrine of worthier title is abolished as a rule of law and as a rule of construction. Language in a governing instrument describing the beneficiaries of a disposition as the transferor's "heirs", "heirs at law", "next of kin", "distributees", "relatives" or "family", or a term that has a similar meaning, does not create or presumptively create a reversionary interest in the transferor.

AB645,70,10 (4) 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.

AB645,70,19 854.23 Protection of payers and other 3rd parties. (1) Liability depends on notice. (a) A payer or other 3rd party is not liable for having transferred property to a beneficiary designated in a governing instrument who, under this chapter, is not entitled to the property, or for having taken any other action in good faith reliance on the beneficiary's apparent entitlement under the terms of the governing instrument, before the payer or other 3rd party received written notice of a claimed lack of entitlement under this chapter. However, a payer or other 3rd party is liable for a payment made or other action taken after the payer or other 3rd party received written notice of a claimed lack of entitlement under this chapter.

AB645,70,25 (b) Severance of a joint interest under the provisions of this chapter does not affect any 3rd-party interest in property acquired for value and in good faith reliance on an apparent title by survivorship, unless a document declaring the severance has been noted, registered, filed or recorded in records appropriate to the kind and location of the property that are relied upon, in the ordinary course of transactions involving such property, as evidence of ownership.

AB645,71,4 (2) Manner of notice. A claimant shall mail written notice of a claimed lack of entitlement under sub. (1) to the 3rd party's main office or home by registered or certified mail, return receipt requested, or serve the claim upon the 3rd party in the same manner as a summons in a civil action.

AB645,71,12 (3) Deposit of property with court. (a) Upon receipt of written notice of a claimed lack of entitlement under this chapter, a 3rd party may transfer property held by it to the court having jurisdiction of the probate proceedings relating to the decedent's estate. If no proceedings have been commenced, the transfer may be made to the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the property and, upon its determination of the owner, shall order disbursement in accordance with the determination.

AB645,71,14 (b) Property transferred to the court discharges the 3rd party from all claims for the property.

AB645,71,19 854.24 Protection of buyers. A person who purchases property for value or who receives property in partial or full satisfaction of a legally enforceable obligation is neither obligated under this chapter to return the property nor liable under this chapter for the value of the property, unless the person has notice as described in s. 854.23 (2).

AB645,71,25 854.25 Personal liability of recipients not for value. (1) Original recipients. A person who, not for value, receives property to which the person is not entitled under this chapter shall return the property. If the property is not returned, the recipient shall be personally liable for the value of the property to the person who is entitled to it under this chapter, regardless of whether the recipient has the property or its proceeds.

AB645,72,6 (2) Subsequent recipients. (a) If a recipient described in sub. (1) gives all or part of the property described in sub. (1) to a subsequent recipient, not for value, the subsequent recipient shall return the property. If the property is not returned, the subsequent recipient shall be personally liable to the person who is entitled to it under this chapter for the value received, if the subsequent recipient has the property, its proceeds or property acquired with the property or its proceeds.

AB645,72,11 (b) If the subsequent recipient described in par. (a) does not have the transfer described, its proceeds or the property acquired with the property or its proceeds, but knew or should have known of his or her liability under this section, the subsequent recipient remains personally liable to the person who is entitled to it under this chapter for the value received.

AB645,72,15 (3) Mode of satisfaction. On petition of the person entitled to the property under this chapter showing that the mode of satisfaction chosen by the recipient in sub. (1) or (2) will create a hardship for the entitled person, the court may order that a different mode of satisfaction be used.

AB645,72,21 854.26 Effect of federal preemption. If any provision in this chapter is preempted by federal law with respect to property covered by this chapter, a person who receives property, other than for full consideration, which the person is not entitled to receive under this chapter shall return the property or be personally liable for the value of the property to the person who would have been entitled to it were the provision not preempted.

AB645, s. 169 Section 169. 856.05 (5) of the statutes is created to read:

AB645,72,25 856.05 (5) Applicability of section. This section applies to wills, codicils, documents incorporated by reference under s. 853.32 (1) or (2) and information needed for proof of a lost will under s. 856.17.

AB645, s. 170 Section 170. 856.16 of the statutes is created to read:

AB645,73,3 856.16 Self-proved will. A self-proving acknowledgment and affidavit included in a will are governed by s. 853.04.

AB645, s. 171 Section 171. 857.01 of the statutes is amended to read:

AB645,73,22 857.01 Ownership in personal representative; management and control. Upon his or her letters being issued by the court, the personal representative succeeds to the interest of the decedent in all property of the decedent. The personal representative or surviving spouse may petition the court for an order determining the classification of property under ch. 766, and for other equitable relief necessary for management and control of the marital property during the administration of the estate. The court may make any decree under ch. 766, including a decree that the property be titled in accordance with its classification, to assist the personal representative or surviving spouse in managing and controlling the marital property and the decedent's property other than marital property during administration of the estate. During administration, the management and control rules under s. 766.51 apply to the property of a decedent spouse which is subject to administration and to the property of the surviving spouse. With regard to property subject to the election of the surviving spouse under s. 861.02 (1), the personal representative may manage and control the property while the property is subject to administration. The personal representative shall determine when, during administration, property shall be distributed to satisfy an election under s. 861.02 (1).

AB645, s. 172 Section 172. 857.015 of the statutes is amended to read:

AB645,74,11 857.015 Management and control of certain business property by holding spouse. A spouse who holds property described under s. 766.70 (3) (a), (b) or (d) which is not also held by the other spouse may direct in a will or other signed writing that the marital property interest of the nonholding spouse in such property and the election under s. 861.02 (1) against such property be satisfied as provided under ss. s. 861.015 and 861.02 (2). The holding spouse shall identify in a will or other signed writing the property described under s. 766.70 (3) (a), (b) or (d) to which the directive applies. The signature of the holding spouse on a directive other than a will shall be acknowledged, attested or witnessed under s. 706.07. The estate of the holding spouse may not execute a directive under this section. If at the death of a spouse the surviving spouse is the holding spouse, the surviving spouse may execute a directive under this section if executed within 90 days after the decedent spouse's death.

AB645, s. 173 Section 173. 858.01 (title) of the statutes is amended to read:

AB645,74,13 858.01 (title) Personal representative files; presumptions.

AB645, s. 174 Section 174. 858.01 (1) of the statutes is renumbered 858.01.

AB645, s. 175 Section 175. 858.01 (2) of the statutes is repealed.

AB645, s. 176 Section 176. 859.40 of the statutes is amended to read:

AB645,75,3 859.40 Creditor's action for property not inventoried. Whenever there is reason to believe that the estate of a decedent as set forth in the inventory may be insufficient to pay the decedent's debts, a creditor whose claim has been allowed may, on behalf of all, bring an action to reach and subject to sale any property or interest therein not included in the inventory, which is liable for the payment of debts. The creditor's action shall not be brought to trial until the insufficiency of the estate in the hands of the personal representative is ascertained; if found likely that the assets may be insufficient, the action shall be brought to trial. If the action is tried, any property or interest therein which ought to be subjected to the payment of the debts of the decedent shall be sold in the action and the net proceeds used to pay such debts and to reimburse the creditor for the reasonable expenses and attorney fees incurred by the creditor in the action as approved by the court.

AB645, s. 177 Section 177. 859.41 of the statutes is amended to read:

AB645,75,18 859.41 Creditor's action for property fraudulently sold by decedent. Whenever there is reason to believe that the estate of a decedent as set forth in the inventory may be insufficient to pay the decedent's debts, and the decedent conveyed any property or any interest therein with intent to defraud the decedent's creditors or to avoid any duty, or executed conveyances void as against creditors, any creditor whose claim has been allowed may, on behalf of all, bring an action to reach any property and subject it to sale any property or interest therein. The creditor's action shall not be brought to trial until the insufficiency of the estate in the hands of the personal representative is ascertained; if found likely that the assets may be insufficient, the action shall be brought to trial. If the action is tried any property or interest therein which ought to be subjected to the payment of the debts of the decedent shall be sold in the action and the net proceeds used to pay such debts and to reimburse the creditor for the reasonable expenses and attorney fees incurred by the creditor in such action as approved by the court.

AB645, s. 178 Section 178. 861.015 (1) of the statutes is amended to read:

AB645,76,2 861.015 (1) If following the death of a spouse property is subject to a directive under s. 857.015, the marital property interest of the nonholding spouse in the property shall be satisfied within one year after the decedent spouse's death from other property which is of equal clear market value at the time of satisfaction. Except as provided under sub. (3), if the interests of the nonholding spouse under this section and s. 861.02 (2) are not satisfied within one year after the decedent spouse's death, this section does not apply and the nonholding spouse's marital property interest in the property subject to the directive continues as if the directive had not been made.

AB645, s. 179 Section 179. 861.015 (3) (intro.) of the statutes is amended to read:

AB645,76,7 861.015 (3) (intro.)  If the interests of the nonholding spouse under this section and s. 861.02 (2) are not satisfied within one year after the decedent spouse's death because the clear market value of the property subject to the directive has not been determined, the court having jurisdiction of the decedent spouse's estate shall:

AB645, s. 180 Section 180. Subchapter II (title) of chapter 861 [precedes 861.018] of the statutes is repealed and recreated to read:

AB645,76,10 Chapter 861

AB645,76,13 Subchapter II Elective share in deferred marital property

AB645, s. 181 Section 181. 861.018 of the statutes is created to read:

AB645,76,15 861.018 Definitions. In this subchapter:

AB645,76,17 (1) "Augmented deferred marital property estate" means the property under s. 861.02 (2).

AB645,76,21 (2) "Deferred individual property" means any property that is not classified by ch. 766, that was brought to the marriage or acquired while the spouses were married and that would have been classified as individual property under ch. 766 if it had been acquired when ch. 766 applied.

AB645,77,2 (3) "Nonadverse party" means a person who has a power relating to a trust or other property arrangement but who does not have a substantial beneficial interest that would be adversely affected by exercise or nonexercise of that power, except that "nonadverse party" does not include a person who has a general power of appointment over property, with respect to that property.

AB645,77,4 (4) "Power" includes a power to designate the beneficiary of a beneficiary designation.

AB645,77,6 (5) "Power of appointment" includes a power to designate the beneficiary of a beneficiary designation.

AB645,77,12 (6) "Presently exercisable general power of appointment" means a power of appointment under which, at the time in question, the decedent held a power to create a present or future interest in himself or herself, his or her creditors, his or her estate or creditors of his or her estate and a power to revoke or invade the principal of a trust or other property arrangement, whether or not the decedent had the capacity to exercise the power at the time.

AB645,77,14 (7) "Property" has the meaning given in s. 851.27 and includes values subject to a beneficiary designation.

AB645,77,16 (8) "Right to income" includes a right to payments under a commercial or private annuity, an annuity trust, a unitrust or a similar arrangement.

AB645,77,17 (9) "Transfer" includes, but is not limited to, the following:

AB645,77,19 (a) An exercise or release of a presently exercisable general power of appointment held by the decedent.

AB645,77,21 (b) A lapse at death of a presently exercisable general power of appointment held by the decedent.

AB645,77,22 (c) An exercise, release or lapse of either of the following:

AB645,77,24 1. A general power of appointment that the decedent created in himself or herself.

AB645,78,2 2. A power under s. 861.03 (3) that the decedent conferred on a nonadverse party.

AB645, s. 182 Section 182. 861.02 of the statutes is repealed and recreated to read:

AB645,78,6 861.02 Deferred marital property elective share. (1) Amount. The surviving spouse has the right to elect an amount equal to no more than 50% of the augmented deferred marital property estate as determined under sub. (2).

AB645,78,9 (2) Augmented deferred marital property estate. (a) If the presumption of marital property under s. 766.31 (2) is rebutted as to the classification of an asset or a portion thereof, the asset or portion is presumed to be deferred marital property.

AB645,78,14 (b) The augmented deferred marital property estate is the total value of the deferred marital property of the spouses, irrespective of which spouse owned the property, where the property was acquired and where the property is currently located, including real property located in another jurisdiction. It includes all types of property that fall within any of the following categories:

AB645,78,16 1. Probate and nonprobate transfers of the decedent's deferred marital property under s. 861.03 (1) to (3).

AB645,78,18 2. Decedent's gifts of deferred marital property made during the 2 years before the decedent's death under s. 861.03 (4).

AB645,78,19 3. Deferred marital property of the surviving spouse under s. 861.04.

AB645,78,22 (3) Calculation of property interests. Exclusions from the augmented deferred marital property estate, valuation of included property and reduction for expenses and claims are governed by s. 861.05.

AB645,78,24 (4) Satisfaction. Satisfaction of the augmented deferred marital property elective share is governed by ss. 861.06, 861.07 and 861.11.

AB645,79,2 (5) Proceedings. Proceedings for the election are governed by ss. 861.08 and 861.09.

AB645,79,4 (6) Waiver. Waiver of the deferred marital property elective share is governed by s. 861.10.

AB645,79,8 (7) Applicability of election. (a) Unless the right has been waived under s. 861.10 or other limitations of this subchapter apply, the surviving spouse is eligible to make the election if at the time of the decedent's death the decedent is domiciled in this state.

AB645,79,11 (b) If a decedent who is not domiciled in this state owns real property in this state, the right of the surviving spouse to take an elective share in that property is governed by s. 861.20.

AB645,79,17 (8) Special provision if surviving spouse caused death of decedent. If the surviving spouse unlawfully and intentionally kills the decedent, as determined under s. 854.14 (5), the estate of the decedent shall have the right to elect no more than 50% of the augmented deferred marital property estate as determined under sub. (2). The court shall construe the provisions of ss. 861.03 to 861.11 as necessary to achieve the intent of this paragraph.

AB645, s. 183 Section 183. 861.03 of the statutes is repealed and recreated to read:

AB645,79,21 861.03 Augmented deferred marital property estate: decedent's probate property and nonprobate or other property transfers. Subject to s. 861.05, the augmented deferred marital property estate includes all of the following:

AB645,79,23 (1) Deferred marital property in decedent's probate estate. The value of deferred marital property in the decedent's probate estate.

AB645,80,2 (2) Deferred marital property passing nonprobate at decedent's death. The value of deferred marital property owned or owned in substance by the decedent immediately before death that passed outside probate at the decedent's death, including the following:

AB645,80,4 (a) The decedent's fractional interest in deferred marital property that was held by the decedent with the right of survivorship.

AB645,80,8 (b) The decedent's ownership interest in deferred marital property that was held by the decedent in a form payable or transferable on death, including deferred employment benefit plans, individual retirement accounts, annuities and transfers under s. 766.58 (3) (f), or in coownership with the right of survivorship.

AB645,80,13 (c) Deferred marital property in the form of proceeds of insurance on the life of the decedent, including accidental death benefits, that were payable at the decedent's death, if the decedent owned the insurance policy immediately before death or if the decedent alone and immediately before death held a presently exercisable general power of appointment over the policy or its proceeds.

AB645,80,17 (d) Deferred marital property over which the decedent alone, immediately before death, held a presently exercisable general power of appointment, to the extent that the property passed at the decedent's death by exercise, release, lapse, default or otherwise.

AB645,80,21 (3) Deferred marital property transferred with retained rights or benefits. (a) The augmented deferred marital property estate includes the value of any deferred marital property transferred by the decedent in which the decedent retained rights or benefits, including but not limited to the following:

AB645,80,25 1. Deferred marital property in which the decedent retained the right to possession, use, enjoyment or income and that was irrevocably transferred, to the extent that the decedent's right terminated at or continued beyond the decedent's death.

AB645,81,6 2. Deferred marital property in which the decedent retained the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom, to control the time at which designated persons shall possess or enjoy the property or income therefrom, or to alter or amend the terms of the transfer of the property, to the extent that the decedent's right terminated at or continued beyond the decedent's death.

AB645,81,13 3. Any transfer of deferred marital property, including transfer of an income interest, in which the decedent created a power of appointment, including the power to revoke or terminate the transfer or to consume, invade or dispose of the principal or income, if the power was exercisable by the decedent alone, by the decedent in conjunction with another person or by a nonadverse party, and if the power is for the benefit of the decedent, creditors of the decedent, the decedent's estate or creditors of the decedent's estate.

AB645,81,20 (b) The amount included under par. (a) 3. is the value of the property subject to the power of appointment if the power of appointment is over property, the value of the property that produces or produced the income if the power of appointment is over income or the power valued at the higher amount if the power of appointment is over both income and property. The value is limited by the extent to which the power of appointment was exercisable at the decedent's death or the property passed at the decedent's death by exercise, release, lapse, default or otherwise.

AB645,81,22 (4) Deferred marital property transferred within 2 years prior to death. (a) In this subsection, termination occurs:

AB645,81,25 1. With respect to a right or interest in property, when the right or interest terminates by the terms of the governing instrument or when the decedent transfers or relinquishes the right or interest.

AB645,82,2 2. With respect to a power of appointment over property, when the power terminates by exercise, release, lapse, default or otherwise.

AB645,82,4 3. With respect to a power of appointment under sub. (2) (d), when the power terminates by exercise or release.

AB645,82,7 (b) The augmented deferred marital property estate includes the value of any deferred marital property transferred by the decedent within the 2 years immediately preceding the decedent's death, including the following:

AB645,82,13 1. Deferred marital property that passed as a result of the termination of a right or interest in, or power of appointment over, property that would have been included in the augmented deferred marital property estate under subs. (2) (a), (b) or (d) or (3), if the right, interest or power had not terminated until the decedent's death. The amount included is the value of the property that would have been included if the property were valued at the time the right, interest or power terminated.

AB645,82,18 2. Transfers by the decedent of or relating to the deferred marital property component of an insurance policy on the life of the decedent, if the proceeds would have been included under sub. (2) (c) had the transfer not occurred. The amount included is the value of the insurance proceeds to the extent that they were payable at the decedent's death.

AB645,82,23 3. Any transfer of deferred marital property to the extent that it is not otherwise included in the augmented deferred marital property estate. The amount included is the value of the property at the time of the transfer, but only to the extent that the aggregate transfers to any one donee in either of the 2 years exceeded $10,000.