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.
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.
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.
History: 1997 a. 188
; 2005 a. 216
Protection of payers and other 3rd parties. 854.23(2)(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.
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.
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.
Deposit of property with court. 854.23(4)(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.
Property transferred to the court discharges the 3rd party from all claims for the property.
Protection of financial institutions. 854.23(5)(b)
Notwithstanding sub. (2)
, in addition to the protections afforded a financial institution under ss. 701.1012
and chs. 112
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.
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:
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.
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
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)
History: 1997 a. 188
Personal liability of recipients not for value. 854.25(1)(1)
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.
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.
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.
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)
will create a hardship for the entitled person, the court may order that a different mode of satisfaction be used.
History: 1997 a. 188
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
History: 1997 a. 188
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:
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:
If the decedent is survived by issue, all issue of the decedent are also issue of the surviving spouse.
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.
If any of the circumstances described in par. (a) 1.
, 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.
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.
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.
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.
History: 2009 a. 341