AB720: Bill Text

AB720,65,3 (b) "Divorce, annulment or similar event" means any divorce, any annulment or any other event or proceeding that would exclude a spouse as a surviving spouse under s. 851.30.

AB720,65,5 (c) "Former spouse" means a person whose marriage to the decedent has been the subject of a divorce, annulment or similar event.

AB720,65,8 (d) "Relative of the former spouse" means an individual who is related to the former spouse by blood, adoption or marriage and who, after the divorce, annulment or similar event, is not related to the decedent by blood, adoption or marriage.

AB720,65,15 (e) "Revocable", with respect to a disposition, provision or nomination, means one under which the decedent, at the time of the divorce, annulment or similar event, was alone empowered, by law or under the governing instrument, to cancel the designation in favor of the former spouse or former spouse's relative, whether or not the decedent was then empowered to designate himself or herself in place of the former spouse or the former spouse's relative, and whether or not the decedent then had the capacity to exercise the power.

AB720,65,18 (2) Scope. This section applies only to governing instruments that were executed by the decedent before the occurrence of a divorce, annulment or similar event with respect to his or her marriage to the former spouse.

AB720,65,20 (3) Revocation upon divorce. Except as provided in subs. (5) and (6), a divorce, annulment or similar event does all of the following:

AB720,65,22 (a) Revokes any revocable disposition of property made by the decedent to the former spouse or a relative of the former spouse in a governing instrument.

AB720,65,24 (b) Revokes any disposition created by law to the former spouse or a relative of the former spouse.

AB720,66,3 (c) Revokes any revocable provision made by the decedent in a governing instrument conferring a power of appointment on the former spouse or a relative of the former spouse.

AB720,66,5 (d) Revokes the decedent's revocable nomination of the former spouse or a relative of the former spouse to serve in any fiduciary or representative capacity.

AB720,66,9 (e) Severs the interests of the decedent and former spouse 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 former spouse into tenancies in common.

AB720,66,15 (4) Effect of revocation. Except as provided in subs. (5) and (6), provisions of a governing instrument that are revoked by this section are given effect as if the former spouse and relatives of the former spouse disclaimed the revoked provisions or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the former spouse and relatives of the former spouse died immediately before the divorce, annulment or similar event.

AB720,66,16 (5) Exceptions. This section does not apply if any of the following applies:

AB720,66,17 (a) The express terms of a governing instrument provide otherwise.

AB720,66,18 (b) The express terms of a court order provide otherwise.

AB720,66,21 (c) The express terms of a contract relating to the division of the decedent's and former spouse's property made between the decedent and the former spouse before or after the marriage or the divorce, annulment or similar event provide otherwise.

AB720,66,22 (d) The divorce, annulment or similar event is nullified.

AB720,66,23 (e) The decedent and the former spouse have remarried.

AB720,66,25 (f) There is a finding of the decedent's contrary intent. Extrinsic evidence may be used to construe that intent.

AB720,67,3 (6) Revocation of nontestamentary provision in marital property agreement. The effect of a judgment of annulment, divorce or legal separation on marital property agreements under s. 766.58 is governed by s. 767.266 (1).

AB720,67,9 854.18 Order in which assets apportioned; abatement. (1) (a) Except as provided in sub. (3) or in connection with the share of the surviving spouse who elects to take an elective share in deferred marital property under s. 861.02, a spouse who takes under s. 853.11 (2) or a child who takes under s. 853.25, shares of distributees abate, without any preference or priority as between real and personal property, in the following order:

AB720,67,10 1. If the governing instrument is a will, property subject to intestacy.

AB720,67,11 2. Residuary transfers or devises under the governing instrument.

AB720,67,12 3. General transfers or devises under the governing instrument.

AB720,67,13 4. Specific transfers or devises under the governing instrument.

AB720,67,17 (b) For purposes of abatement, a general transfer or devise charged on any specific property or fund is a specific transfer to the extent of the value of the property on which it is charged, and upon the failure or insufficiency of the property on which it is charged, it is a general transfer to the extent of the failure or insufficiency.

AB720,67,20 (2) (a) Abatement within each classification is in proportion to the amount of property that each of the beneficiaries would have received if full distribution of the property had been made in accordance with the terms of the governing instrument.

AB720,67,23 (b) If the subject of a preferred transfer is sold or used incident to administration of an estate, abatement shall be achieved by appropriate adjustments in, or contribution from, other interests in the remaining assets.

AB720,68,2 (3) If the governing instrument expresses an order of abatement, or if the decedent's estate plan or the express or implied purpose of the transfer would be defeated by the order of abatement under sub. (1), the shares of the distributees abate as necessary to give effect to the intention of the transferor.

AB720,68,7 854.19 Penalty clause for contest. A provision in a governing instrument that prescribes a penalty against an interested person for contesting the governing instrument or instituting other proceedings relating to the governing instrument may not be enforced if the court determines that the interested person had probable cause for instituting the proceedings.

AB720,68,8 854.20 Status of adopted persons.

AB720,68,12 (3) Sequential adoption. Subject to sub. (4), if an adoptive parent dies or his or her parental rights are terminated in a legal proceeding and the adopted child is subsequently adopted by another person, the former adoptive parent is considered to be a birth parent for purposes of this section.

AB720,68,14 (4) Applicability. Subsections (1), (2) and (3) apply only if at least one of the following applies:

AB720,68,15 (a) The decedent or transferor is the adoptive parent or adopted child.

AB720,68,16 (b) The adopted person was a minor at the time of adoption.

AB720,68,18 (c) The adopted person was raised as a member of the household by the adoptive parent from the child's 15th birthday or before.

AB720,68,21 (5) 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 instrument. Extrinsic evidence may be used to construe that intent.

AB720,69,3 854.21 Persons included in family groups or classes. (1) Adopted persons. (a) Except as provided in par. (b) or sub. (7), a gift of property by a governing instrument to a class of persons described as issue, lawful issue, children, grandchildren, descendants, heirs, heirs of the body, next of kin, distributees or the like includes a person adopted by a person whose birth child would be a member of the class, and issue of the adopted person, if the conditions for membership in the class are otherwise satisfied and any of the following applies:

AB720,69,4 1. The transferor is the adoptive parent or adopted child.

AB720,69,5 2. The adopted person was a minor at the time of adoption.

AB720,69,7 3. The adopted person was raised as a member of the household by the adoptive parent from the child's 15th birthday or before.

AB720,69,10 (b) Except as provided in sub. (7), a gift under par. (a) excludes a birth child and his or her issue otherwise within the class if the birth child has been adopted and would cease to be a child of the birth parent under s. 854.20 (2).

AB720,69,13 (2) Individuals born to unmarried parents. (a) Subject to par. (b) and sub. (7), individuals born to unmarried parents are included in class gifts and other terms of relationship in accordance with s. 852.05.

AB720,69,19 (b) In addition to the requirements of par. (a) and subject to the provisions of sub. (7), in construing a disposition by a transferor who is not the birth parent, an individual born to unmarried parents is not considered to be the child of a birth parent unless that individual lived while a minor as a regular member of the household of that birth parent or of that birth parent's parent, brother, sister, spouse or surviving spouse.

AB720,69,22 (3) Relatives by marriage. Subject to sub. (7), terms of family relationship in statutes or governing instruments that do not differentiate between relationships by blood and relationships by marriage are construed to exclude relatives by marriage.

AB720,70,2 (4) Relatives of the half-blood. Subject to sub. (7), terms of family relationship in statutes or governing instruments that do not differentiate between relationships by the half-blood and relationships by the full-blood are construed to include both types of relationships.

AB720,70,8 (5) Posthumous issue. Subject to sub. (7), if a statute or governing instrument transfers an interest to a group of persons described as a class, such as "issue", "children", "nephews and nieces" or any other class, a person conceived at the time the membership in the class is determined and subsequently born alive is entitled to take as a member of the class if that person otherwise satisfies the conditions for class membership and survives at least 120 hours past birth.

AB720,70,12 (6) Person related through 2 lines. Subject to sub. (7), a person who is eligible to be a transferee under a statute or governing instrument through 2 lines of relationship is limited to one share, based on the relationship that entitles the person to the larger share.

AB720,70,16 (7) 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.

AB720,71,2 854.22 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 a present or 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, as 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.

AB720,71,9 (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" 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, as if the designated individual had then died owning the subject matter of the class gift.

AB720,71,15 (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.

AB720,71,19 (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.

AB720,71,22 854.23 Protection of payers and other 3rd parties. (1) Definition. In this section, "governing instrument" includes a filed verified statement under s. 865.201, a certificate under s. 867.046 (1m) or a recorded application under s. 867.046 (5).

AB720,72,6 (2) 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.

AB720,72,12 (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.

AB720,72,16 (3) Manner of notice. A claimant shall mail written notice of a claimed lack of entitlement under sub. (2) 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.

AB720,72,24 (4) 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.

AB720,73,2 (b) Property transferred to the court discharges the 3rd party from all claims for the property.

AB720,73,3 (5) Protection of financial institutions. (a) In this subsection:

AB720,73,4 1. "Account" has the meaning given in s. 705.01 (1) or 710.05 (1) (a).

AB720,73,5 2. "Financial institution" has the meaning given in s. 705.01 (3).

AB720,73,13 (b) Notwithstanding sub. (2), in addition to the protections afforded a financial institution under ss. 701.19 (11) and 710.05 and chs. 112 and 705 a financial institution is not liable for having transferred an account to a beneficiary designated in a governing instrument who, under this chapter, is not entitled to the account, or for having taken any other action in reliance on the beneficiary's apparent entitlement under the terms of a governing instrument, regardless of whether the financial institution received written notice of a claimed lack of entitlement under this chapter.

AB720,73,16 (c) If a financial institution has reason to believe that a dispute exists as to the rights of parties, or their successors, to an account subject to a governing instrument, the financial institution may, but is not required to, do any of the following:

AB720,73,17 1. Deposit the account with a court as provided in sub. (4).

AB720,73,18 2. Refuse to transfer the account to any person.

AB720,73,21 (d) The protection afforded a financial institution under this subsection does not affect the rights of parties or their successors in disputes concerning the beneficial ownership of accounts.

AB720,74,2 854.24 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 (3).

AB720,74,8 854.25 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, its proceeds or property acquired with the property or its proceeds.

AB720,74,14 (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.

AB720,74,19 (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.

AB720,74,23 (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.

AB720,75,2 854.26 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 is subject to s. 854.25.

AB720, s. 176 Section 176. 856.05 (5) of the statutes is created to read:

AB720,75,6 856.05 (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.

AB720, s. 177 Section 177. 856.16 of the statutes is created to read:

AB720,75,9 856.16 Self-proved will. A self-proving acknowledgment and affidavit included in a will are governed by s. 853.04.

AB720, s. 178 Section 178. 857.01 of the statutes is amended to read:

AB720,76,3 857.01 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).

AB720, s. 179 Section 179. 857.015 of the statutes is amended to read:

AB720,76,17 857.015 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.

AB720, s. 180 Section 180. 858.01 (title) of the statutes is amended to read:

AB720,76,19 858.01 (title) Personal representative files; presumptions.

AB720, s. 181 Section 181. 858.01 (1) of the statutes is renumbered 858.01.

AB720, s. 182 Section 182. 858.01 (2) of the statutes is repealed.

AB720, s. 183 Section 183. 859.40 of the statutes is amended to read:

AB720,77,9 859.40 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.

AB720, s. 184 Section 184. 859.41 of the statutes is amended to read:

AB720,77,24 859.41 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.