Dying Without a Last Will and Testament in Wisconsin
Laws of Intestacy Succession
Intestate succession is the process by which your property passes to your heirs—and who among them will even receive a share—if you fail to leave a last will and testament or other estate plan. The intestate succession laws in the Wisconsin statutes dictate who inherits from you in this case.
Wisconsin is a community property state with regard to marital property, and this adds another layer of law.
What Is Intestate Succession?
Intestate succession is a default distribution. It occurs for lack of any other provisions made by you, and it must happen because a decedent can't own property. Ownership of your assets must pass to a living individual when you die.
Various types of estate plans, such as living trusts and direct beneficiary designations, can avoid intestate distribution of your assets even if you don't leave a will.
Each state has its own intestacy statutes, but most begin with surviving spouses receiving the lion's share of a decedent's estate. Direct descendants would normally divide anything left over. Siblings and parents can be left out entirely.
Wisconsin Intestate Succession Laws
Wisconsin law is very clear about what will happen if a deceased person is survived by a spouse and/or descendants. Descendants include children, grandchildren, great-grandchildren, or subsequent generations.
The surviving spouse would inherit the entire probate estate if the decedent is survived by a spouse and descendants of that spouse. The surviving spouse would inherit half of the deceased's separate property if the decedent is survived by a spouse and descendants of which at least one of whom is not also the descendant of the spouse.
This rule accommodates the possibility of children born to previous relationships.
The deceased person's descendants would inherit 100% of the probate estate "per stirpes" if the deceased is survived by descendants and no spouse. The spouse would inherit the entire probate estate if the deceased is survived by a spouse but no descendants.
The Latin term "per stirpes" translates to "by the plant" or "by the root." It means that assets pass to a beneficiary's heirs if the beneficiary is no longer alive to receive the bequest.
Wisconsin Community Property Law
Community property law dictates that both spouses equally own all assets acquired during their marriage, with the exception of inheritances or gifts made to only one of them during the marriage. These are viewed as a spouse's separate property, as is premarital property owned before the marriage in most cases.
This is the mechanism by which the surviving spouse would receive the entirety of the community property or marital estate. Premarital or separate property would be distributed according to the other rules for intestate succession.
When There Are No Spouse or Descendants
The deceased's parents would inherit equal shares of the probate estate if both are living. Otherwise, the surviving parent would inherit 100%.
The deceased person's siblings and descendants of deceased siblings—nieces and nephews—would inherit the entire probate estate per stirpes if the deceased were survived by siblings or descendants of those siblings but no parents.
Will You Inherit From a Wisconsin Intestate Estate?
You might not inherit anything even if you determine that you're entitled to an intestate share of your relative's estate according to Wisconsin law, depending on how they held ownership of their property.
Your relative might have left all non-probate property. These are assets that don't require the probate process to pass to living beneficiaries, such as property held by joint tenants with rights of survivorship or retirement assets with named beneficiaries. They don't contribute to the probate estate.
Another possibility is that the debts the decedent owed at the time of death exceed the value of their probate estate. This would make the estate "insolvent." It doesn't have sufficient assets to pay all the decedent's debts, so heirs wouldn't receive anything.
Assets with a beneficiary designation pass directly to that individual without necessity for probate, so they're not subject to intestacy law. These can include life insurance policies, retirement accounts, payable on death accounts, and real estate held by joint tenants with rights of survivorship.
What Taxes You Will Owe?
Wisconsin is among the majority of U.S. states that don't collect an estate tax or an inheritance tax. The federal government doesn't impose an inheritance tax, but your inheritance might be subject to an estate tax at the federal level. You won't have to come out of pocket to pay it, however.
An estate tax is valued on the overall value of the estate, and the estate is responsible for paying it. The expense might subtract from your individual inheritance, but you would not have to write a check payable to the IRS. And, as a practical matter, only estates valued at more than $11.58 million are subject to the federal estate tax on the balance of their value over this threshold as of 2020.
You might owe state and/or federal income taxes if any assets you inherit produce interest or dividend income after the decedent's date of death and when they've been transferred to you.
The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.