861.06 Satisfaction of deferred marital property elective share amount.

(1) Definition. In this section, “property transferred to the surviving spouse" includes outright transfers that have been disclaimed by the surviving spouse. The term does not include transfers in trust that have been disclaimed by the surviving spouse, unless the surviving spouse had a general power of appointment over the property in the trust during his or her lifetime or an interest in the trust after the disclaimer.

(2) Initial satisfaction of deferred marital property elective share amount. If the surviving spouse makes the election under s. 861.02, the following categories of property are used first to satisfy the elective share amount:

(a) All property included in the augmented deferred marital property estate under s. 861.04.

(b) All marital, individual, deferred marital, or deferred individual property, transferred to the surviving spouse, including any beneficial interest in property transferred in trust:

1. From the decedent's probate estate, other than property transferred under s. 861.33 or 861.41, and other than property transferred to the surviving spouse under s. 861.31 or 861.35 except as ordered by the court under s. 861.31 (4) or 861.35 (4).

2. By nonprobate transfer at the decedent's death.

3. By operation of any state or federal law, other than transfers under the U.S. social security system.

4. By the decedent at any time during the decedent's life, except that the following shall be excluded:

a. The first $5,000 of the value of gifts from the decedent to the surviving spouse each year. Each gift shall be valued as of the date of the gift.

b. Gifts received from the decedent that the surviving spouse can show were subsequently and gratuitously transferred in a manner that, had they been the deferred marital property of the surviving spouse, would not have been included in the augmented deferred marital property estate under s. 861.04.

(3) Unsatisfied balance. After the property under sub. (2) has been applied toward satisfaction of the deferred marital property elective share amount, the remainder of the elective share amount shall be satisfied proportionally from transfers to persons other than the surviving spouse of property included in the augmented deferred marital property estate under s. 861.03 (1), (2), (3) or (4) (b) 2.

(4) Remaining unsatisfied balance. After the property under subs. (2) and (3) has been applied toward satisfaction of the deferred marital property elective share amount, the remainder of the elective share amount shall be satisfied proportionally from transfers to persons other than the surviving spouse of property included in the augmented deferred marital property estate under s. 861.03 (4) (b) 1. or 3.

(5) Equitable adjustment of shares. If all or part of a prorated share under sub. (2), (3) or (4) is uncollectible, the court may increase the prorated liability of recipients described under the same or another of the 3 subsections if all of the following conditions are satisfied:

(a) The court finds that an equitable adjustment is necessary to avoid hardship for the surviving spouse.

(b) No recipient or donee of a recipient is liable for an amount greater than the value of the deferred marital property subject to the election that was received.

(6) Valuation. The value of property used to satisfy the deferred marital property elective share includes the value of any property transferred outright to the surviving spouse, the commuted value of any present or future interest in property transferred to the surviving spouse, and the commuted value of property payable to the surviving spouse under any trust, life insurance settlement option, annuity contract, public or private pension, disability compensation, death benefit or retirement plan, or any similar arrangement.

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