Chapter 854

854.21(1) (1) Adopted persons.

854.21(1)(a) (a) Except as provided in 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 at least one of the criteria under s. 854.20 (1) (b) 1., 2., and 3. is satisfied.

854.21(1)(b) (b) Except as provided in 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 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 treated as a child of the birth parent under s. 854.20 (2).

854.21(2) (2) Individuals born to unmarried parents.

854.21(2)(a) (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.

854.21(2)(b) (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.

854.21(3) (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.

854.21(4) (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.

854.21(5) (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.

854.21(6) (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.

854.21(7) (7) Contrary intent. If the transfer is made under a governing instrument and 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.

854.21 History History: 1997 a. 188; 2005 a. 216.

854.22 854.22 Form of distribution for transfers to family groups or classes.

854.22(1) (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.

854.22(2) (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.

854.22(3) (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.

854.22(4) (4) Contrary intent. If the transfer is made under a governing instrument and 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.

854.22 History History: 1997 a. 188; 2005 a. 216.

854.23 854.23 Protection of payers and other 3rd parties.

854.23(1) (1) Definition. In this section, “governing instrument” includes an instrument described in s. 854.01, a filed verified statement under s. 865.201, a certificate under s. 867.046 (1m), a confirmation under s. 867.046 (2), or a recorded application under s. 867.046 (5).

854.23(2) (2) Liability depends on notice.

854.23(2)(a) (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.

854.23(2)(b) (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.

854.23(3) (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.

854.23(4) (4) Deposit of property with court.

854.23(4)(a) (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.

854.23(4)(b) (b) Property transferred to the court discharges the 3rd party from all claims for the property.

854.23(5) (5) Protection of financial institutions.

854.23(5)(a) (a) In this subsection:

854.23(5)(a)1. 1. “Account” has the meaning given in s. 705.01 (1) or 710.05 (1) (a).

854.23(5)(a)2. 2. “Financial institution” has the meaning given in s. 705.01 (3).

854.23(5)(b) (b) Notwithstanding sub. (2), in addition to the protections afforded a financial institution under ss. 701.1012 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.

854.23(5)(c) (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:

854.23(5)(c)1. 1. Deposit the account with a court as provided in sub. (4).

854.23(5)(c)2. 2. Refuse to transfer the account to any person.

854.23(5)(d) (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.

854.23 History History: 1997 a. 188; 2005 a. 216; 2013 a. 92.

854.23 Annotation While s. 854.01 defines “governing instrument” generally in ch. 854 quite broadly and clearly intends a marital property agreement be considered a governing instrument, s. 854.23, the section concerning protection of payers and other third-parties, defines “governing instrument” for purposes of that section, as one of 3 specific alternatives and is limited to those alternatives. A payer need not require compliance with this section before it can legally transfer funds to a beneficiary. However, to be afforded the protections under this section, compliance with its requirements is mandatory. Maciolek v. City of Milwaukee Employees’ Retirement System Annuity and Pension Board, 2006 WI 10, 288 Wis. 2d 62, 709 N.W.2d 360, 04-1254.

854.24 854.24 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).

854.24 History History: 1997 a. 188.

854.25 854.25 Personal liability of recipients not for value.

854.25(1) (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.

854.25(2) (2) Subsequent recipients.

854.25(2)(a) (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.

854.25(2)(b) (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.

854.25(3) (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.

854.25 History History: 1997 a. 188.

854.26 854.26 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.

854.26 History History: 1997 a. 188.

854.30 854.30 Application of certain wills or trusts referring to repealed federal transfer taxes.

854.30(1) (1) A will or trust of a decedent who dies after December 31, 2009, and before January 1, 2011, that contains a formula disposing of certain of the decedent’s property that is determined by reference to exemptions, exclusions, deductions, or credits under the federal estate tax, 26 USC 2001-2801, the federal generation-skipping transfer tax, 26 USC 2601-2664, or both, shall be administered as follows:

854.30(1)(a) (a) The formula disposing a decedent’s property shall be administered as if the provisions of the federal estate tax and federal generation-skipping transfer tax were in force just as they were on December 31, 2009, except that the applicable exclusion amount under 26 USC 2010 (c) for decedents’ estates shall be considered unlimited and the federal generation-skipping transfer tax exemption under 26 USC 2631 (c) shall also be considered unlimited, if all of the following apply:

854.30(1)(a)1. 1. The decedent is survived by a spouse.

854.30(1)(a)2. 2. If the decedent is survived by issue, all issue of the decedent are also issue of the surviving spouse.

854.30(1)(a)3. 3. The surviving spouse is a current income beneficiary of each trust funded in whole or in part by such formula, or the sole beneficiary of any other property subject to disposition by such formula which does not pass in trust.

854.30(1)(b) (b) If any of the circumstances described in par. (a) 1., 2., and 3. is not present, the formula for disposing a decedent’s property shall be administered as if the provisions of the federal estate tax and federal generation-skipping transfer tax were in force just as they were on December 31, 2009.

854.30(2) (2) A personal representative of a decedent’s estate, a trustee of a decedent’s trust, a surviving spouse of a decedent or any beneficiary of a will or trust to whom this section applies may petition the circuit court to apply a formula disposing of property under a will or trust by reference to the federal estate tax, the federal generation-skipping transfer tax, or both, or the exemptions, exclusions, deductions or credits under those taxes, in a manner different than that provided under sub. (1). The court may consider the overall dispositive plan of the decedent, the tax implications of alternative dispositions, the decedent’s intentions in establishing the formula and such other matters as the court considers appropriate when determining how to respond to the petition. A proceeding under this subsection shall be commenced within one year of the decedent’s death or be barred.

854.30(3) (3) This section does not apply to wills or trusts that are executed or amended after December 31, 2009, or that manifest an intent that a contrary rule apply if the decedent dies on a date on which there is no applicable federal estate tax or federal generation-skipping transfer tax.

854.30(4) (4) In the event that the federal estate tax, the federal generation-skipping transfer tax, or both, are applicable to transfers of assets of a decedent who dies after December 31, 2009, but before January 1, 2011, due to the establishment or reinstatement of one or both of those taxes, the provisions of this section do not apply to the decedent’s will or trust and the formula shall be applied in a manner consistent with the applicable tax or taxes.

854.30 History History: 2009 a. 341.