Wisconsin Estate Tax: Everything Residents Need to Know

What are the inheritance laws in Wisconsin?

Inheritance in Wisconsin depends on two key factors: whether the person who died left behind a valid will, and if not, how the state's intestacy laws divide property.

If you have a will

A will allows you to decide who receives property that passes through your estate and to nominate a personal representative to administer it. If probate is required, that personal representative should submit the will to the probate court, which is the court-supervised process of validating the document, paying debts, and distributing assets.

A valid Wisconsin will should clearly state how you want your assets to be distributed after your death. Wisconsin does not impose an inheritance tax on property inherited through a will. However, some inherited assets may have federal tax implications, depending on the type of asset and how it is transferred or later sold.

If you do not have a will (intestate succession)

If someone dies without a will, Wisconsin's intestate succession laws decide who inherits. Consider the following scenarios.

• Spouse + children (from the same marriage): The surviving spouse inherits everything.
• Spouse + children (from a different relationship): The surviving spouse and the children may both inherit. Their respective shares depend on the type and ownership of the property, including whether it is marital property.
• Spouse, no children: The spouse inherits everything.
• Children, no spouse: The children generally inherit the estate, and descendants of a deceased child may receive that child's share.
• No spouse or children: Parents inherit, and if parents are not alive, siblings (or their descendants) inherit.

Intestate succession also has a few other special rules:

• Adopted children inherit from adoptive parents the same as biological children.
• Children born outside of marriage can inherit if certain conditions are met.
• Posthumous children (conceived before death but born after) are also entitled to inherit.
• Wisconsin also has a 120-hour survivorship rule, meaning an heir must survive the deceased by at least 120 hours (five days) to inherit.

Rights of next of kin in probate

The term "next of kin" refers to your closest living relatives. Being a next of kin comes with certain rights during probate.

• Notice of proceedings: Heirs and other interested persons may be entitled to notice during probate, depending on the proceeding.
• Right to inherit under intestacy: If no will exists, next of kin inherit according to the rules above.
• Ability to contest: An heir or other interested person with standing may challenge a will on recognized legal grounds, such as improper execution, lack of capacity, undue influence, or fraud.

Having a clear will helps avoid confusion and potential disputes among next of kin, ensuring your wishes—not state law—determine who inherits.

Is inheritance considered marital property in Wisconsin?

Wisconsin's marital property laws generally treat an inheritance one spouse receives from a third party as that spouse's individual property. Different rules govern whether inherited property is subject to division if the spouses later divorce.

Separate vs. marital property

Wisconsin is considered a community property state, but it distinguishes between marital property and separate property. Generally:

• Inheritance is individual property. Property inherited by one spouse from a third party is generally classified as that spouse's individual property under Wisconsin marital property law.
• Commingling can complicate matters. Mixing inherited property with marital assets may make it harder to preserve its individual status, particularly if the inherited property can no longer be traced.

Protecting inherited property

Couples can use prenuptial or postnuptial agreements to clearly define what remains separate, even if some commingling occurs.