854.06(4)(a)2.2. 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.

854.06(4)(bm)(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 the intent.

854.06 AnnotationA 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), 98-0586.

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 transferor’s probate estate.

854.07(4)(4) 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 the intent.

854.07 AnnotationUnder 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 (1972).

854.07 AnnotationThe testator’s spouse inherited the residue when a purported residuary clause made only specific and general bequests and did not make a dispositive provision for distribution of the residue. To read into a will a gift by implication, it is necessary to first find a positive, disposing intent based on a contingency that did not occur. Then it is possible, if the facts warrant it, to imply the same intent concerning the contingency which did occur but which was not accounted for in the will. In Matter of Estate of McWilliams, 78 Wis. 2d 328, 254 N.W.2d 277 (1977).

854.07 NoteNOTE: The preceding cases were decided prior to the adoption of 1997 Wis. Act 188, which made extensive revisions to the Wisconsin Probate Code.

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)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.