The deed controls the outcome, not the will. This is a fact that many Wisconsin families discover too late, after a loved one has passed away and the question of who owns the house has no clear answer. How property is titled determines what happens to it at death, often regardless of any estate plan.
Wisconsin Recognizes Three Main Forms of Joint Ownership
Before you can understand what happens after death, it’s important to understand the different types of ownership that can apply. Wisconsin law recognizes three common forms of estate planning: joint tenancy, tenancy in common, and tenancy by the entirety.
Joint Tenancy with Right of Survivorship.
Under Wis. Stat. § 700.17, joint tenants hold an equal share in the property. When one owner dies, their interest does not pass to heirs – it terminates automatically and vests in the surviving owner(s). There is no need for probate or waiting. The deed should contain language expressing this intention, such as “joint tenants,” “together,” “or survivor,” or “right of survivorship.”
Tenancy in Common
This is the default. Wis. Stat. § 700.18 presumes that two or more owners named on a deed are tenants in common unless the survivorship language appears. There is no right to survivorship with this form. Each owner’s share goes to their heirs or according to their estate plan – and it typically goes through probate.
Survivorship Marital Property
This is unique to Wisconsin as a matrimonial property state. Married couples can title assets as “marital property survivorship.” Like joint ownership, the surviving partner automatically inherits their deceased partner’s share without going through probate. However, this comes with a significant tax benefit that joint ownership does not offer.
The Tax Difference Between Joint Tenancy and Survivorship Marital Property
With survivorship marital property, the entire property receives a full step-up to fair market value at the date of death. If the surviving spouse later sells the property, capital gains taxes are calculated on that stepped-up value, not the original purchase price, which can mean tens of thousands of dollars in tax savings.
With standard joint tenancy between spouses, only the deceased spouse’s share receives the step-up. The surviving spouse’s original share retains the old basis. Married couples in Wisconsin who own real estate as joint tenants should carefully consider whether re-titling to survivorship marital property is a good idea.
What Happens to Tenancy in Common Property
When a tenant in common passes away, their share does not automatically pass to anyone. Instead, it becomes part of their estate and is distributed according to the following:
- Their will, if one exists
- Wisconsin intestate succession laws under Wis. Stat. § 852.01, in the absence of a will
- A trust, if the share had been transferred to one before death
How to Clear the Title After a Joint Tenant Dies
Survivorship doesn’t clear up the public record on its own. The surviving owner still needs to formally document the death so the title reflects the change.
Under Wis. Stat. § 867.045, the surviving joint tenant can file a form HT-110 with the Register of Deeds in the county where the property is located. The form records the fact of death, terminates the deceased joint tenant’s interest on the record, and confirms the survivor’s ownership – all without a court proceeding. Alternatively, a court-issued certificate under § 870.06 can accomplish the same result where needed.
Neither step is automatic. Skipping it creates title problems when the surviving owner later tries to sell or refinance.
Transfer-on-Death Deeds Are Another Option
Wisconsin also allows for transfer-on-death (TOD) designations for real property. A TOD deed names a beneficiary who will inherit the property upon the owner’s death without the need for probate. The current owner retains full control over the property during their lifetime and can change or revoke the beneficiary designation at any time. This is beneficial for single owners or tenants in common who wish to direct their ownership interest in the property to a specific individual without the need of a full trust.
Getting the Title Right Is the Starting Point
A will alone is not sufficient. Property transfers outside the will, when survivorship language is present, and this language may or may not reflect your actual intentions. At Collins Law Firm, we ensure that clients’ titles are reviewed as part of their estate planning process, not as an afterthought. If you have any questions about how your property is currently titled or whether your existing plan reflects your intentions, please contact us to arrange a consultation.