TL;DR:
- In a recent Wisconsin Probate case, the Wisconsin Court of Appeals ruled that an 88-year-old man’s intent to forgive mortgage loans was invalid because it did not meet proper legal requirements under estate law Wisconsin.
- Although drafts of a will and communication with an attorney showed intent, the absence of a signed will meant the estate followed Wisconsin probate and intestate succession laws, bringing the unpaid loans back into estate administration.
- The court clarified that a valid gift in contemplation of death must meet strict criteria, including intent, specific anticipation of death, and proper delivery, which was missing in this probate process case.
- Arguments citing attorney instructions failed because they did not constitute legal delivery, reinforcing how executor duties, fiduciary duties, and compliance with probate court Wisconsin standards are critical in handling estate debts and creditor claims.
- This case highlights why proactive estate planning, including clear documentation of tax liabilities, government claims, and asset transfers, is essential to avoid disputes and ensure proper estate management and debt settlement.
A Wisconsin appeals court has ruled a dying man’s intention to forgive debts to several of his relatives in anticipation of his death were not valid due to a lack of proper delivery. 88-year-old Roger Hansen died before signing the last draft of a will in which he forgave mortgage loans made to his brother’s children and grandson totaling approximately $278,000. Because he died before his will was signed, his estate was distributed according to Wisconsin’s intestate succession laws, and the mortgage loans were included in Hansen’s estate.
The relatives who obtained loans from Hansen argued early drafts of his will along with a letter to his attorney provided sufficient proof Hansen intended to forgive the loans. A Dane County Circuit Court Judge agreed and allowed the mortgage loans to be removed from Hansen’s estate. Another relative who did not have a mortgage loan from Hansen, but who was to receive an inheritance as part of Hansen’s intestate succession appealed the circuit court’s ruling.
The District IV Wisconsin Court of Appeals recognized Hansen’s intention to forgive the mortgage loans but reversed the lower court’s ruling because the requirements for a gift in contemplation of death were not satisfied. According to the court, a gift in contemplation of death provides an exception to the statutory requirements of a will in Wisconsin. For such a gift to be valid, the gift grantor must intend for the gift to become complete at his or her death, must be contemplating death from a specific ailment which later takes the gift grantor’s life, and the gift must be delivered.
Although the relatives with mortgage loans argued delivery of the gift occurred when Hansen sent instructions to his attorney, the appellate court disagreed. According to the Court of Appeals, since Hansen failed to instruct his attorney to deliver the information to the would-be gift receivers, the gift was never delivered. The court stated the purpose of Hansen’s instructions was merely to provide guidance regarding his will and did not evidence his intent for delivery to the debtors.
Proper estate planning is essential to ensure your assets, including gifts, are transferred in accordance with your wishes at your death. It is even more crucial if you have minor children or your own family business. Common estate planning tools include wills, trusts, insurance, limited liability companies, powers of attorney, health care documents, and more. If you have questions regarding completing a unified estate plan to protect your family, request a consultation with one of our experienced estate planning attorneys today.
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Additional Resources: Meegan v. Netzer, 2012 WI App 20, (Jan. 26, 2012).