AB1038: Bill Text

AB1038,36,14 854.06 (4) (a) (intro.) This section Subsection (3) does not apply if there is a finding of contrary intent of the decedent any of the following applies:

AB1038,36,17 (bm) If the person who executed the governing instrument had an intent contrary to any provision in this section, then that provision is not applicable to the transfer. Extrinsic evidence may be used to construe that the intent.

AB1038, s. 106 Section 106. 854.06 (4) (a) 1. of the statutes is created to read:

AB1038,36,20 854.06 (4) (a) 1. The governing instrument provides that a transfer to a predeceased beneficiary lapses.

AB1038, s. 107 Section 107. 854.06 (4) (b) of the statutes is renumbered 854.06 (4) (a) 2. and amended to read:

AB1038,37,3 854.06 (4) (a) 2. If the The governing instrument designates one or more persons, classes, or groups of people as contingent transferees, in which case 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.

AB1038, s. 108 Section 108. 854.07 (3) of the statutes is amended to read:

AB1038,37,7 854.07 (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 transferor's probate estate.

AB1038, s. 109 Section 109. 854.07 (4) of the statutes is amended to read:

AB1038,37,12 854.07 (4) This section does not apply if there is a finding of contrary intent of If the person who executed the governing instrument had an intent contrary to any provision in this section, then that provision is inapplicable to the transfer. Extrinsic evidence may be used to construe that the intent.

AB1038, s. 110 Section 110. 854.08 (5) (title) of the statutes is repealed and recreated to read:

AB1038,37,15 854.08 (5) (title) Property under guardianship, conservatorship, or power of attorney.

AB1038, s. 111 Section 111. 854.08 (5) of the statutes is renumbered 854.08 (5) (b) and amended to read:

AB1038,38,2 854.08 (5) (b) Subject to pars. (c) and (d) and sub. (6), if property that is the subject of a specific gift is sold or mortgaged by a guardian or, conservator, or agent of the person who executed the governing instrument, or if a condemnation award or insurance proceeds are paid to a guardian or, conservator, or agent, the specific beneficiary has the right to a general pecuniary transfer equivalent to the proceeds of the sale or the, mortgage, condemnation award, or the insurance proceeds, reduced by any amount expended or incurred to restore or repair the property or to reduce the indebtedness on the mortgage, if the funds are available under the governing instrument. This provision

AB1038,38,10 (c) Paragraph (b) does not apply if the person who executed the governing instrument with respect to a guardian or conservator if, subsequent to the sale or, mortgage, award, or receipt of insurance proceeds, the person who executed the governing instrument 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) the rights of the specific beneficiary shall be determined as though the proceeds were paid to the owner under sub. (2), (3), or (4).

AB1038, s. 112 Section 112. 854.08 (5) (a) of the statutes is created to read:

AB1038,38,13 854.08 (5) (a) In this subsection, "agent" means an agent under a durable power of attorney, as defined in s. 243.07 (1) (a).

AB1038, s. 113 Section 113. 854.08 (5) (d) of the statutes is created to read:

AB1038,38,19 854.08 (5) (d) Paragraph (b) does not apply with respect to an agent if the person who executed the governing instrument is competent at the time of the sale, mortgage, award, or receipt of insurance proceeds but in such event the rights of the specific beneficiary shall be determined as though the proceeds were paid to the owner under sub. (2), (3), or (4).

AB1038, s. 114 Section 114. 854.08 (6) (a) (intro.) and 2. of the statutes are consolidated, renumbered 854.08 (6) (ag) and amended to read:

AB1038,39,2 854.08 (6) (ag) This section is inapplicable if any of the following applies: 2. The 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 and the requirement under s. 854.09 (1) is satisfied.

AB1038, s. 115 Section 115. 854.08 (6) (a) 1. of the statutes is renumbered 854.08 (6) (ar) and amended to read:

AB1038,39,9 854.08 (6) (ar) The If the person who executed the governing instrument, either expressly or as construed from extrinsic evidence, shows the had an intent that a contrary to any provision in this section, then that provision is inapplicable to the transfer fail under the particular circumstances. Extrinsic evidence may be used to construe the intent.

AB1038, s. 116 Section 116. 854.09 (3) of the statutes is amended to read:

AB1038,39,16 854.09 (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 and his or her issue take a substitute transfer under intestacy or under a governing instrument, the issue receive the same transfer that the named transferee would have received had the transferee survived, unless the transferor has declared otherwise in a document, either expressly or as construed from extrinsic evidence.

AB1038, s. 117 Section 117. 854.11 (4) of the statutes is amended to read:

AB1038,39,21 854.11 (4) Contrary intent. This section does not apply if there is a finding of contrary intent of If the person who executed the governing instrument had an intent contrary to any provision in this section, then that provision is inapplicable to the transfer. Extrinsic evidence may be used to construe that the intent.

AB1038, s. 118 Section 118. 854.12 of the statutes is created to read:

AB1038,39,25 854.12 Debt to transferor. (1) Heir under intestacy. (a) If an heir owes a debt to the decedent, the amount of the indebtedness shall be offset against the intestate share of the debtor heir.

AB1038,40,7 (b) In contesting an offset under par. (a), the debtor heir shall have the benefit of any defense that would be available to the debtor heir in a direct proceeding by the personal representative for the recovery of the debt, except that the debtor heir may not defend on the basis that the debt was discharged in bankruptcy or on the basis that the relevant statute of limitations has expired. If the debtor fails to survive the decedent, the court may not include the debt in computing any intestate shares of the debtor's issue.

AB1038,40,13 (2) Transferee under revocable governing instrument. (a) Subject to par. (c), if a transferee under a revocable governing instrument survives the transferor and is indebted to the transferor, the amount of the indebtedness shall be treated as an offset against the property to which the debtor transferee is entitled. If multiple revocable governing instruments transfer property to the debtor, the debt shall be equitably allocated against the various instruments.

AB1038,40,20 (b) Subject to par. (c), in contesting an offset under par. (a), the debtor shall have the benefit of any defense that would be available to the transferee in a direct proceeding for the recovery of the debt, except that the transferee may not defend on the basis that the debt was discharged in bankruptcy, unless that discharge occurred before the execution of the governing instrument, or on the basis that the relevant statute of limitations has expired. If the transferee fails to survive the decedent, the debt may not be included in computing the entitlement of alternate beneficiaries.

AB1038,40,23 (c) If the person who executed the governing instrument had an intent contrary to any provision in this subsection, then that provision is not applicable to the transfer. Extrinsic evidence may be used to construe the intent.

AB1038,41,2 (3) Property not distributed because of offset. The property not distributed to the debtor becomes part of the residue of the entity that holds the debt. If the debt is not held by an entity, then the property not distributed to the debtor becomes part of the residue of the decedent's probate estate.

AB1038, s. 119 Section 119. 854.13 (title) of the statutes is amended to read:

AB1038,41,4 854.13 (title) Disclaimer of transfers at death.

AB1038, s. 120 Section 120. 854.13 (2) (a) of the statutes is renumbered 854.13 (2) (a) 2.

AB1038, s. 121 Section 121. 854.13 (2) (a) 1. of the statutes is created to read:

AB1038,41,8 854.13 (2) (a) 1. In this paragraph, "person" includes a person who is unborn or whose identity is unascertained.

AB1038, s. 122 Section 122. 854.13 (2) (gm) of the statutes is created to read:

AB1038,41,14 854.13 (2) (gm) Disclaimer by trustee. The trustee of a trust named as a recipient of property under a 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, s. 123 Section 123. 854.13 (2) (h) of the statutes is amended to read:

AB1038,41,21 854.13 (2) (h) 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 which that would bar the right to disclaim under sub. (11) (11g).

AB1038, s. 124 Section 124. 854.13 (2) (i) of the statutes is created to read:

AB1038,41,25 854.13 (2) (i) Disclaimer of inter vivos transfers. A person who is a recipient of property under an inter vivos governing instrument, as defined in s. 700.27 (1) (c), may disclaim the property as provided in s. 700.27.

AB1038, s. 125 Section 125. 854.13 (4) (c) of the statutes is amended to read:

AB1038,42,5 854.13 (4) (c) Future right to income or profits principal. Notwithstanding pars. (a) and (b), an instrument disclaiming the future right to receive discretionary or mandatory distributions of income or profits principal from any source may be executed and delivered at any time.

AB1038, s. 126 Section 126. 854.13 (7) (title) of the statutes is amended to read:

AB1038,42,7 854.13 (7) (title) Devolution in general.

AB1038, s. 127 Section 127. 854.13 (7) (a) of the statutes is amended to read:

AB1038,42,22 854.13 (7) (a) In general. Unless the transferor of the property or donee of the power has otherwise provided Subject to pars. (bm) and (c) and subs. (8), (9), and (10), unless the governing instrument provides otherwise, either expressly or as construed from extrinsic evidence, the disclaimed property devolves as if the disclaimant had died before the decedent or before the effective date of the transfer under the governing instrument. If the disclaimed interest is a remainder contingent on surviving to the time of distribution, the disclaimed interest passes as if the disclaimant had died immediately before the time for distribution. If the disclaimant is an appointee under a power exercised by a governing instrument, the disclaimed property devolves as if the disclaimant had died before the effective date of the exercise of the power. If the disclaimant is a taker in default under a power created by a governing instrument, the disclaimed property devolves as if the disclaimant had predeceased the donee of the power. This paragraph is subject to subs. (8), (9) and (10).

AB1038, s. 128 Section 128. 854.13 (7) (b) of the statutes is repealed.

AB1038, s. 129 Section 129. 854.13 (7) (bm) and (c) of the statutes are created to read:

AB1038,43,8 854.13 (7) (bm) Devolution to issue of the disclaimants. Unless the governing instrument provides otherwise, either expressly or as construed from extrinsic evidence, if, by law or under the governing instrument, the issue of the disclaimant would share in the disclaimed interest by any method of representation had the disclaimant died before the time the disclaimed interest would have taken effect in possession or enjoyment, the disclaimed interest passes only to the issue of the disclaimant who survive when the disclaimed interest takes effect in possession or enjoyment.

AB1038,43,11 (c) Disclaimer of a devisable future interest. 1. In this paragraph, "devisable future interest" is a future interest that can be passed under the will of the person who holds the future interest.

AB1038,43,14 2. If the disclaimed interest is a devisable future interest under the law governing the transfer, then the disclaimed interest devolves as if it were a nondevisable future interest.

AB1038, s. 130 Section 130. 854.13 (8) of the statutes is amended to read:

AB1038,43,19 854.13 (8) Devolution of disclaimed interest in joint tenancy. A Unless the decedent provided otherwise in a governing instrument, either expressly or as construed from extrinsic evidence, a disclaimed interest in a joint tenancy passes to the decedent's probate estate.

AB1038, s. 131 Section 131. 854.13 (9) of the statutes is amended to read:

AB1038,43,24 854.13 (9) Devolution of disclaimed interest in survivorship marital property. A Unless the decedent provided otherwise in a governing instrument, either expressly or as construed from extrinsic evidence, a disclaimed interest in survivorship marital property passes to the decedent's probate estate.

AB1038, s. 132 Section 132. 854.13 (10) (title) of the statutes is repealed and recreated to read:

AB1038,44,4 854.13 (10) (title) Acceleration of subsequent interests when preceding interest is disclaimed.

AB1038, s. 133 Section 133. 854.13 (10) of the statutes is renumbered 854.13 (10) (a) and amended to read:

AB1038,44,17 854.13 (10) (a) Subsequent interest not held by disclaimant. Unless the governing instrument creating the future interest manifests a contrary intent provides otherwise, either expressly or as construed from extrinsic evidence, a future upon the disclaimer of a preceding interest, a subsequent interest not held by the disclaimant and limited to take effect in possession or enjoyment after the termination of the interest which that is disclaimed takes accelerates to take effect as if the disclaimant had died immediately before the effective date of the governing instrument time when the disclaimed interest would have taken effect in possession or enjoyment or, if the disclaimant is an appointee under a power exercised by a governing instrument power of appointment, as if the disclaimant had died before the effective date of the exercise of the power.

AB1038, s. 134 Section 134. 854.13 (10) (b) of the statutes is created to read:

AB1038,44,22 854.13 (10) (b) Subsequent interest held by the disclaimant. Unless the governing instrument provides otherwise, either expressly or as construed from extrinsic evidence, upon the disclaimer of a preceding interest, a subsequent interest held by the disclaimant does not accelerate.

AB1038, s. 135 Section 135. 854.13 (11) (title) of the statutes is repealed.

AB1038, s. 136 Section 136. 854.13 (11) (a) of the statutes is renumbered 854.13 (11g), and 854.13 (11g) (intro.) and (a), as renumbered, are amended to read:

AB1038,45,3 854.13 (11g) Actions that bar disclaimer Bar. (intro.) A Bars to a person's right to disclaim property is barred by include, but are not limited to, any of the following:

AB1038,45,6 (a) The person's assignment, conveyance, encumbrance, pledge, or transfer of the property or a contract therefor for the assignment, conveyance, encumbrance, pledge, or transfer of the property.

AB1038, s. 137 Section 137. 854.13 (11) (b) of the statutes is renumbered 854.13 (11p), and 854.13 (11p) (title), as renumbered, is amended to read:

AB1038,45,10 854.13 (11p) (title) Effect upon successors in interest of disclaimer or waiver.

AB1038, s. 138 Section 138. 854.13 (12) (b) of the statutes is amended to read:

AB1038,45,14 854.13 (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 or s. 700.27.

AB1038, s. 139 Section 139. 854.14 (1) of the statutes is repealed.

AB1038, s. 140 Section 140. 854.14 (3m) of the statutes is created to read:

AB1038,45,18 854.14 (3m) Additional effects if death caused by spouse. (a) Definitions. In this subsection:

AB1038,45,25 1. "Owner" means a person appearing on the records of the policy issuer as the person having the ownership interest, or means the insured if no person other than the insured appears on those records as a person having that interest. In the case of group insurance, the "owner" means the holder of each individual certificate of coverage under the group plan and does not include the person who contracted with the policy issuer on behalf of the group, regardless of whether that person is listed as the owner on the contract.

AB1038,46,1 2. "Ownership interest" means the rights of an owner under a policy.

AB1038,46,3 3. "Policy" means an insurance policy insuring the life of a spouse and providing for payment of death benefits at the spouse's death.

AB1038,46,6 4. "Proceeds" means the death benefit from a policy and all other economic benefits from it, whether they accrue or become payable as a result of the death of an insured person or upon the occurrence or nonoccurrence of another event.

AB1038,46,15 (b) Life insurance. 1. Except as provided in sub. (6), if a noninsured spouse unlawfully and intentionally kills an insured spouse, the surviving spouse's ownership interest in a policy that designates the decedent spouse as the owner and insured, or in the proceeds of such a policy, is limited to a dollar amount equal to one-half of the marital property interest in the interpolated terminal reserve and in the unused portion of the term premium of the policy on the date of death of the decedent spouse. All other rights of the surviving spouse in the ownership interest or proceeds of the policy, other than the marital property interest described in this subsection, terminate at the decedent spouse's death.

AB1038,46,21 2. Notwithstanding s. 766.61 (7) and except as provided in sub. (6), if an insured spouse unlawfully and intentionally kills a noninsured spouse, the ownership interest at death of the decedent spouse in any policy with a marital property component that designates the surviving spouse as the owner and insured is a fractional interest equal to one-half of the portion of the policy that was marital property immediately before the death of the decedent spouse.

AB1038,47,4 (c) Deferred employment benefits. Notwithstanding s. 766.62 (5) and except as provided in sub. (6), if the employee spouse unlawfully and intentionally kills the nonemployee spouse, the ownership interest at death of the decedent spouse in any deferred employment benefit, or in assets in an individual retirement account that are traceable to the rollover of a deferred employment benefit plan, that has a marital property component and that is attributable to the employment of the surviving spouse is equal to one-half of the portion of the benefit or assets that was marital property immediately before the death of the decedent spouse.

AB1038,47,11 (d) Deferred marital property. Except as provided in sub. (6), if the surviving spouse unlawfully and intentionally kills the decedent spouse, the estate of the decedent shall have the right to elect no more than 50 percent of the augmented deferred marital property estate, as determined under s. 861.02 (2), as though the decedent spouse were the survivor and the surviving spouse were the decedent. The court shall construe the provisions of ss. 861.03 to 861.11 as necessary to achieve the intent of this paragraph.

AB1038, s. 141 Section 141. 854.14 (5) (a) of the statutes is amended to read:

AB1038,47,16 854.14 (5) (a) A final judgment establishing criminal accountability for the unlawful and intentional killing of the decedent conclusively establishes the convicted individual as the decedent's killer for purposes of this section and s. 861.02 (8).

AB1038, s. 142 Section 142. 854.14 (5) (b) of the statutes is amended to read:

AB1038,47,20 854.14 (5) (b) A final adjudication of delinquency on the basis of an unlawful and intentional killing of the decedent conclusively establishes the adjudicated individual as the decedent's killer for purposes of this section and s. 861.02 (8).