Governor Walker has signed 2017 Wisconsin Act 90. Effective Dec. 1, 2017, it allows Wisconsin’s Transfer by Affidavit form to be signed by someone who is named in a will to act as a personal representative. This change expands the pool of people who could potentially sign and present those affidavits to claim funds from a deceased member’s credit union accounts.
Background
As we explain in The League’s ii Release No. 0004, the Transfer by Affidavit form allows someone to claim a deceased person’s property without having to go through a probate court case, if the person who died left a relatively small estate.
A Transfer by Affidavit form can be used to claim property or to collect money owed to a deceased person (legally, a “decedent”) – but only if the decedent had a total of $50,000 or less worth of property that would have to be included in a probate estate (if one was started). If the total value that would be in the estate is more than $50,000, then probate court proceedings are needed.
The affidavit can be used to claim funds in solely owned accounts, not joint accounts or accounts with payable-on-death (POD) beneficiaries. (When one owner of a joint account dies, the other(s), if living, automatically become(s) legally entitled to the funds. A POD beneficiary is automatically legally entitled to the funds upon the death of the account’s owner(s).)
The affidavit form is filled out in duplicate, indicating the signer’s relationship to the deceased person, a description and the value of the property to be transferred, the total value of all the decedent’s solely-owned property in Wisconsin at the date of death, and the total value of all the decedent’s interests in property at the time of death. It must be executed and sworn to under oath before a notary public.
In one section, the person signing the affidavit must indicate whether the deceased person received certain government benefits. If not, the credit union may release funds immediately. If so, however, then the signer of the affidavit must send a copy of the affidavit to the Wisconsin Department of Health and Family Services (DHFS). The credit union may pay funds to the person who signed the affidavit only if ten or more days have elapsed since the date the affidavit was delivered to DHFS, as shown on the certified mail return receipt, and DHFS has not claimed the funds in the meantime.
The person who signs the affidavit does not necessarily keep all the money, but instead has a duty to distribute the funds to creditors (according to priorities set out in the statutes) and to others (such as other heirs) who may be entitled to the funds. The affidavit form reminds the signer of this duty.
A credit union that follows the statutory procedures and releases funds to someone who presents a Transfer by Affidavit form is released from liability just as if they had released the funds to a probate-court-appointed personal representative.
People with questions about the affidavit should be referred to their own attorneys, who can help determine whether the affidavit can be used, who can sign it, and how to complete it properly. (The Register in Probate may be willing to offer guidance, as well.) Credit unions should not attempt to give anyone legal advice, since that could result in liability.
What is changing (and not changing)
Prior to this amendment, the affidavit could be signed by:
- Any heir (including a spouse, registered domestic partner, children, parents, siblings and grandparents) of the deceased person;
- The trustee of a revocable trust created by the deceased person; or
- A person who was guardian of the deceased person at the time of his/her death.
The amended statute expands this list by adding: “a person named in the will to act as personal representative.”
Most of the other provisions of the statute remain the same. For example, the person signing the affidavit still must indicate whether the deceased person received certain government benefits, and if so, must send a copy of the affidavit to the DHFS. The credit union is still protected from liability if it follows the statutory procedures and releases funds to someone who presents a Transfer by Affidavit form.
The amendment adds two new provisions:
- First, if the credit union receives an affidavit from “a person named in the will to act as personal representative,” a new, extra waiting period is imposed that would not apply if someone else had signed the affidavit in another capacity (i.e. if an heir, trustee or guardian had signed it). The credit union must not transfer any funds to the person who signed the affidavit until at least 30 days after the day on which the affidavit is received. If, during the 30-day period, the credit union gets another affidavit for the same deceased member from someone else, then the credit union “may not transfer any money due the decedent, the property of the decedent, or any evidence of interest, obligation to, or right of the decedent under this section unless ordered to do so by a court.” A credit union that fails to comply with this 30-day waiting period gets no protection from liability under the statute.
- Second, “a person named in the will to act as personal representative” cannot use the affidavit to have any interest in real estate transferred to him/her.
Unanswered questions
The amendment to the statute leaves a number of questions unanswered, and credit unions will have to grapple with them unless/until the state offers some clarification. For example:
- Is the credit union expected to examine the will to verify that the person who signed the affidavit is, indeed, named in the will to serve as the personal representative? The statute doesn’t say (although it doesn’t say whether a credit union must verify that an “heir” is actually related to the deceased member, either). If it turns out that the person providing the affidavit wasn’t really named in the will, the statute doesn’t address whether the credit union might be liable, but it’s not hard to imagine a family claiming that the credit union acted negligently in that situation. On the other hand, credit unions ordinarily have no reason to examine a will, since it’s only enforceable by a probate court. For example, simply because a will names someone as a beneficiary to receive the deceased person’s estate, that person is not entitled to anything until a probate court examines the facts and approves the distribution.
- If a credit union wants/needs to examine the will, must it review the original or can it rely on a photocopy? The statute doesn’t say. A photocopy may be of poor quality, but the original may be unavailable, for example if it was filed with a probate court, as explained next.
- Does the will have to be filed with the court before the person named as a personal representative can sign the affidavit? The statute doesn’t say. Wisconsin law says that if the deceased person left a will, it must be filed with the clerk of court’s probate office within 30 days of death – even if no probate proceeding is required. (Wis. Stats. §856.05.) It may be a good practice for the credit union to insist on getting a certified copy of the will after it is filed at the courthouse. That way, the credit union is not relying on a mere photocopy of a will (that may then disappear) and the will is publicly filed (as required by law). Also, the courthouse filing may discourage fraud.
- Could the named personal representative object to the credit union’s insistence on getting a certified copy of the will? It seems unlikely that that objection would go far. Certification is merely evidence that the document is a copy of something that has been filed with the court.
- Does the person signing the affidavit actually have to be appointed as a personal representative by a probate court? The answer seems to be no. The plain wording of the statute says that being named as personal representative in the will is enough to enable someone to sign the affidavit. It would make little sense to require court appointment as a personal representative when the purpose of the statute is to provide a way for small estates to be distributed outside the probate process. (Note, though, that a will merely “nominates” someone to serve as a personal representative. No one officially becomes the personal representative of an estate unless/until a probate court makes that person the personal representative by issuing Domiciliary Letters to him/her.)
- Does a probate court need to verify that a will is authentic and enforceable before the person named as a personal representative can sign the Transfer by Affidavit form? The statute doesn’t say, but again, the language of the statute suggests that the answer is no. Ordinarily, interested parties could try to contest a will in probate court proceedings, if they choose to. For example, potential heirs may dispute the validity of a will, claiming that it is a forgery or that the deceased person was coerced or tricked into signing it. However, it would make little sense to require that a will be authenticated by a probate court when the purpose of the statute is to provide a way for small estates to be distributed outside the probate process. However, this issue raises another question:
- Is a credit union protected if it pays funds to a personal representative named in a will that is later found to have been revoked or otherwise invalid? The statute doesn’t say, but we hope that the answer is yes. As explained earlier, the statute protects those who pay out funds in reliance on a Transfer by Affidavit form. The amended statute only says that this protection does not apply if 1) the section that requires the 30-day waiting period is not followed or 2) if the signer of the affidavit doesn’t provide proof that it was mailed to DHFS if required. The statute doesn’t describe any other situations where the protection may not apply.
- When will the “official” Transfer by Affidavit form be updated? All we can say is that it has not been updated yet. The Wisconsin Court System’s Transfer by Affidavit form is available online here. However, it does not yet reflect the change that allows it to be signed by someone who is named in a will to act as a personal representative.