854.04(2)(b)
(b) The share of each deceased person allocated a share in
par. (a) is divided among that person's issue in the same manner as under
par. (a), repeating until the property is fully allocated.
854.04(3)(a)(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).
854.04(3)(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.
854.04(4)
(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.
854.04(5)
(5) Certain individuals disregarded. For the purposes of this section, all of the following apply:
854.04(5)(a)
(a) An individual who is deceased and who left no surviving issue is disregarded.
854.04(5)(b)
(b) An individual who has a surviving ancestor who is an issue of the designated person is not entitled to a share.
854.04(6)
(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.
854.04 History
History: 1997 a. 188.
854.04 Annotation
The clause "in equal shares to the then living issue of donor's three daughter-beneficiaries in this trust, and/or the then living issue of any deceased issue of donor's three daughter-beneficiaries, by right of representation" requires distribution per capita among his grandchildren and by representation among their children. In re Bowler Trust,
56 Wis. 2d 171,
201 N.W.2d 573.
854.04 Note
NOTE: The preceding case was decided prior to the adoption of
1997 Wis. Act 188, which made extensive revisons to the Wisconsin Probate Code and does not relate directly to this section.
854.05
854.05
No exoneration of encumbered property. 854.05(1)(a)
(a) "Debt" includes accrued interest on the debt.
854.05(1)(b)
(b) "Encumbrance" includes mortgages, liens, pledges and other security agreements that are encumbrances on property.
854.05(2)(a)(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.
854.05(2)(b)
(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:
854.05(2)(b)1.
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.
854.05(2)(b)2.
2. The person or entity secures the amount described in
subd. 1. through a new encumbrance on the property.
854.05(3)
(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.
854.05(4)
(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.
854.05(5)
(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.
854.05 History
History: 1997 a. 188.
854.06
854.06
Predeceased transferee. 854.06(1)(a)
(a) "Provision in a governing instrument" includes all of the following:
854.06(1)(a)1.
1. A gift to an individual whether or not the individual is alive at the time of the execution of the instrument.
854.06(1)(a)2.
2. A share in a class gift only if a member of the class dies after the execution of the instrument.
854.06(1)(a)3.
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.
854.06(1)(b)
(b) "Revocable provision" means a provision that the decedent had the power to change or revoke immediately before death.
854.06(1)(c)
(c) "Stepchild" means a child of the decedent's surviving, deceased or former spouse, and not of the decedent.
854.06(2)
(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:
854.06(2)(a)
(a) A grandparent of the decedent, or issue of a grandparent, subject to
s. 854.21.
854.06(3)
(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).
854.06(4)(a)(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.
854.06(4)(b)
(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.
854.06 History
History: 1997 a. 188.
854.06 Annotation
A bequest to a wife "and to her heirs and assigns forever", where the wife predeceased the testator, was ambiguous where the words were in a residuary clause so that the effect would be intestacy if strictly construed, the draftsman testified that the words were not used in a technical sense and the will acknowledged testator's debt to his wife. Estate of Mangel,
51 Wis. 2d 55,
186 N.W.2d 276.
854.06 Annotation
A will containing a disinheritance clause and a residuary clause naming a residuary legatee, not related to the testatrix, with no gift over, was subject to the anti-lapse statute as the legacy lapsed when the legatee predeceased the testatrix; hence the lapsed gift passed to the heirs-at-law by intestate succession, not to the children of the deceased named beneficiary. Estate of Connolly,
65 Wis. 2d 440,
222 N.W.2d 885.
854.06 Annotation
Section 853.27 does not deny equal protection by arbitrarily creating 2 classes of beneficiaries—relatives and nonrelatives—because the classification is entirely reasonable and well founded in public policy. Estate of Connolly,
65 Wis. 2d 440,
222 N.W.2d 885.
854.06 Note
NOTE: The preceding cases were decided prior to the adoption of
1997 Wis. Act 188, which made extensive revisons to s. 853.27 and created s. 854.06.
854.06 Annotation
A will clause providing that if any beneficiary dies within 5 months of the testator, the deceased beneficiary's share is to be treated as if the beneficiary predeceased the testator, served to pass a deceased beneficiary's share to her children under the anti-lapse statute. Firehammer v. Marchant,
224 Wis. 2d 673,
591 N.W.2d 898 (Ct. App. 1999).
854.07
854.07
Failed transfer and residue. 854.07(1)
(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.
854.07(2)
(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.
854.07(3)
(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.
854.07(4)
(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.
854.07 History
History: 1997 a. 188.
854.07 Annotation
Under a will leaving "my homestead which I occupy at the time of my death" to a son, the home in which the testator lived when the will is executed should be awarded to the son even though the testator became ill and was confined to a nursing home for a year prior to his death and the home was rented. Estate of Gotthart,
56 Wis. 2d 563,
202 N.W.2d 397.
854.07 Annotation
A purported residuary clause made only specific and general bequests, making no dispositive provision for the residuum. Therefore, although contrary to the implied wish of testator, the spouse inherited the residuum. In Matter of Estate of McWilliams,
78 Wis. 2d 328,
254 N.W.2d 277.
854.07 Note
NOTE: The preceding cases were decided prior to the adoption of
1997 Wis. Act 188, which made extensive revisons to the Wisconsin Probate Code and do not relate directly to this section.
854.08
854.08
Nonademption of specific gifts in certain cases. 854.08(1)(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.
854.08(2)(a)(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:
854.08(2)(a)1.
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.
854.08(2)(a)2.
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.
854.08(2)(b)
(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.
854.08(3)
(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:
854.08(3)(a)
(a) Any insurance proceeds paid with respect to the property after the decedent's death, together with the incidents of the specific gift.
854.08(3)(b)
(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.
854.08(4)(a)(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:
854.08(4)(a)1.
1. Any amount of the condemnation award unpaid at the time of death.
854.08(4)(a)2.
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.
854.08(4)(b)
(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).
854.08(5)
(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).
854.08(6)(a)(a) This section is inapplicable if any of the following applies:
854.08(6)(a)1.
1. The governing instrument, either expressly or as construed from extrinsic evidence, shows the intent that a transfer fail under the particular circumstances.
854.08(6)(a)2.
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.
854.08(6)(b)
(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.
854.08(6)(c)
(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.
854.08 History
History: 1997 a. 188.
854.09
854.09
Advancement; satisfaction. 854.09(1)
(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:
854.09(1)(a)
(a) The governing instrument, if any, either expressly or as construed from extrinsic evidence, provides that the gift be taken into account.
854.09(1)(b)
(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.
854.09(1)(c)
(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.
854.09(2)
(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.
854.09(3)
(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.
854.09 History
History: 1997 a. 188.
854.10
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.
854.10 History
History: 1997 a. 188.
854.11
854.11
Gift of securities.
