One of the worst words in estate planning is escheat. Escheat means property on death transfers to the state, and not to your intended beneficiaries. If you’re wondering what happens if you die without a will in Wisconsin, this is something you need to understand.
Jump ahead to these sections:
- Wisconsin’s Intestacy Laws Explained
- How Does Probate Work in Wisconsin If There Is No Will?
- Who Typically Inherits Assets in Wisconsin If There Isn’t a Will?
- Frequently Asked Questions: Dying Without a Will in Wisconsin
Most people feel they already pay more than enough to the state in the form of taxes during their lifetime. The last thing they want is to give something more to the state on death.
If you create a valid will in advance in Wisconsin, you can avoid escheat. Your assets can transfer to your intended beneficiaries under your will.
However, if you don’t have a will upon death in Wisconsin, you can be subject to escheat. It is possible for your assets to transfer to the state of Wisconsin when you die. Not only does this risk your property, but it’s a greater burden for your family. This article discusses escheat and other consequences if you die without a will in Wisconsin.
Wisconsin’s Intestacy Laws Explained
First, what do you need to know about Wisconsin’s intestacy laws? The intestacy laws in Wisconsin provide beneficiaries for your assets if you die without a will in Wisconsin. Without intestacy laws, there would be no clear determination of who should be the new owners of your assets if you die without a will.
Wisconsin’s intestacy laws designate the following persons as the beneficiaries and new owners of your assets on death:
- If you have a surviving spouse or domestic partner, but no surviving descendants, all to the surviving spouse or domestic partner
- If you have a surviving spouse or domestic partner, and surviving descendants all of whom also are descendants of the surviving spouse or domestic partner, all to the surviving spouse or domestic partner
- If you have a surviving spouse or domestic partner, and surviving descendants who are not descendants of the surviving spouse or domestic partner, all of your property is given to the surviving descendants equally
- If you have surviving descendants, but no surviving spouse or domestic partner, all to the surviving descendants
- If you have surviving parents, but no surviving spouse or domestic partner nor surviving descendants, all to the surviving parents
- If you have surviving brothers and sisters and/or descendants of any deceased brother or sister, but no surviving spouse or domestic partner, surviving descendants
Because this can be confusing, let’s look at an example. Oscar dies, survived by his two children, Melody and Fred, and his grandson, Horace. Horace is the only child of Oscar’s deceased daughter, Susan. Based on distribution rules, Oscar’s assets transfer in equal 1/3 shares to Melody, Fred, and Horace. Melody and Fred receive assets as Oscar’s surviving children, and Horace receives assets as the only child of Susan, Oscar’s deceased child.
What happens in Wisconsin if you have none of the family members described above survive you? Wisconsin’s intestacy laws provide that your “estate escheats to the state to be added to the capital of the school fund”. Thus, if you die without a will in Wisconsin, your assets possibly can transfer to the state.
How Does Probate Work in Wisconsin If There Is No Will?
Probate is the legal process that transfers assets to beneficiaries on death. If you die without a will in Wisconsin, probate transfers your assets to the applicable intestate beneficiaries.
Probate begins with the appointment of a personal representative to manage the decedent’s estate. The personal representative has various duties concerning the decedent’s estate, including:
- Identifying and collecting the decedent’s assets
- Establishing an account for the decedent’s estate to receive income and pay expenses
- Determining the decedent’s creditors and settling their claims
- Filing necessary tax returns for the decedent’s estate
- Distributing the remaining assets to the decedent’s beneficiaries
There are two principal forms of probate in Wisconsin: formal administration, supervised by a judge, and informal administration, supervised by the applicable probate county’s register in probate.
Who Typically Inherits Assets in Wisconsin If There Isn’t a Will?
If there is no will in Wisconsin, the family members described above under Wisconsin’s intestacy laws are the persons who typically inherit assets. However, if none of these family members are living, the state inherits assets under escheat. This can be really concerning for Wisconsin residents.
Apart from escheat, the following examples describe other situations when final will wishes are not realized under Wisconsin’s intestacy laws:
- Charity wishes: Wanda dies, survived by her father, Sam. Wanda wants to transfer all of her assets to a charity, but fails to execute a valid will. Under Wisconsin’s intestacy laws, Wanda’s assets transfer all to Sam, contrary to her testamentary intentions.
- Specific gifts: Mike dies, survived by his wife, Denise, and two children, Brett and Greg. Brett and Greg also are Denise’s children. Mike wants to transfer his assets 50% to Denise, 25% to Brett, and 25% to Greg, but fails to execute a valid will. Under Wisconsin’s intestacy laws, Mike’s assets transfer all to Denise, contrary to Mike’s testamentary intentions.
- Real estate: Jennifer dies, survived by her two children, Eric and Valerie. Jennifer wants to transfer her $250,000 real estate in Green Bay all to Eric and her $250,000 stock account all to Valerie, but fails to execute a valid will. Under Wisconsin’s intestacy laws, Jennifer’s Green Bay real estate and stock account each transfer 50% to Eric and 50% to Valerie, contrary to Jennifer’s testamentary intentions.
- Trust: Ronald dies, survived by his three children, Molly, Trent, and Clarissa. Ronald wants to transfer his assets equally to three separate trusts for Molly, Trent, and Clarissa, with Ronald’s sister, Debbie, as trustee. Ronald wants each trust to have its own distinct provisions concerning distributions to its beneficiary. Ronald fails to execute a valid will. Under Wisconsin’s intestacy laws, Ronald’s assets transfer equally to Molly, Trent, and Clarissa “outright”, and not in trust, contrary to Ronald’s testamentary intentions.
Had Wanda, Mike, Jennifer, and Ronald created a valid will, their final wishes could have been met. By failing to do so, they let Wisconsin’s intestacy laws determine their beneficiaries and their specific beneficial interests, leaving their wishes unmet.
Frequently Asked Questions: Dying Without a Will in Wisconsin
Here are some of the frequently asked questions about dying without a will in Wisconsin.
What happens when your parent dies without a will?
If your parent has a surviving spouse or domestic partner, and surviving descendants all of whom also are descendants of the surviving spouse or domestic partner, you are not a beneficiary of your parent’s assets.
If your parent has a surviving spouse or domestic partner, and surviving descendants one or more of whom are not descendants of the surviving spouse or domestic partner, you and any other surviving descendants of your parent generally are beneficiaries.
If your parent has no surviving spouse or domestic partner, you and any other surviving descendants of your parent are beneficiaries of all of your parent’s assets. As between you and any other surviving descendants of your parent, your parent’s assets are allocated equally.
What are a surviving spouse’s rights if there’s no will?
If there are no surviving descendants, the surviving spouse is the sole beneficiary of the decedent’s assets. If there are surviving descendants all of whom also are descendants of the surviving spouse, the surviving spouse also is the sole beneficiary of the decedent’s assets.
For purposes of the rights described above, a surviving domestic partner generally is treated the same as a surviving spouse.
Are there any probate exemptions if you die without a will in Wisconsin?
There are several probate exemptions if you die without a will in Wisconsin, including:
- A “small estate affidavit” (also known as a “transfer affidavit”) can transfer up to $50,000 of assets exempt from probate
- Assets with a specific beneficiary designation (such as a life insurance policy or a retirement account) can transfer to the specific beneficiary exempt from probate
- Assets owned as joint tenants with rights of survivorship can transfer to the surviving joint tenant exempt from probate
- Assets owned in a trust (such as a “Living Trust”) can transfer to the trust beneficiaries exempt from probate
Who is considered next of kin in Wisconsin?
Wisconsin law generally uses the term “next of kin” to refer to the beneficiaries of a deceased person under Wisconsin’s intestacy laws. Thus, the intestate beneficiaries described above are considered next of kin in Wisconsin.
To Avoid Escheat, You Need a Valid Will in Wisconsin
You may think that the risk of escheat does not apply to you because you have a surviving family member who would be a beneficiary under Wisconsin’s intestacy laws.
Even if so, it does not avoid the need to have a valid will in Wisconsin.
The examples of Wanda, Mike, Jennifer, and Ronald described above (and other examples could be cited) show that intestacy can have unintended adverse consequences for you, whether or not your assets would escheat to the state. In Wisconsin, if you want your assets to transfer to your intended beneficiaries and in the manner that you intend, you need to create a legal will.
Source:
1. Wisconsin State Legislature: Chapter 852: Intestate Succession. Wisconsin Legislature. Wisconsin.gov.