854.23 Protection of payers and other 3rd parties.

(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).

(2) Liability depends on notice.

(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.

(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.

(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.

(4) Deposit of property with court.

(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.

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

(5) Protection of financial institutions.

(a) In this subsection:

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

2. “Financial institution" has the meaning given in s. 705.01 (3).

(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.

(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:

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

2. Refuse to transfer the account to any person.

(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.

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

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.