(1) ABROGATION OF COMMON LAW. The common law doctrine of ademption by extinction, as it might otherwise apply to the situations governed by this section, is abolished. (2) PROCEEDS OF SALE. (a) Subject to sub. (6), if property that is the subject of a specific gift is sold by the person who executed the governing instrument within 2 years of the person’s death, the specific beneficiary has the right to the following amounts if available under the governing instrument: 1. Any balance of the purchase price unpaid at the time of death, including any security interest in the property and interest accruing before death, together with the incidents of the specific gift. 2. A general pecuniary transfer equivalent to the amount of the purchase price paid to, or for the benefit of, the person within one year of the seller’s death. (b) Acceptance of a promissory note of the purchaser or a 3rd party is not considered payment, but payment on the note is payment on the purchase price; and for purposes of this section property is considered sold as of the date when a valid contract of sale is made. Sale by an agent of the person who executed the governing instrument or by a trustee under a revocable living trust created by the person is a sale by the person for purposes of this section. (3) PROCEEDS OF INSURANCE ON PROPERTY. Subject to sub. (6), if insured property that is the subject of a specific gift is destroyed, damaged, lost, stolen or otherwise subject to any casualty compensable by insurance, the specific beneficiary has the right to the following amounts, if available under the governing instrument, reduced by any amount expended or incurred to restore or repair the property: (a) Any insurance proceeds paid with respect to the property after the decedent’s death, together with the incidents of the specific gift. (b) A general pecuniary transfer equivalent to any insurance proceeds paid to, or for the benefit of, the decedent within one year of the decedent’s death. (4) CONDEMNATION AWARD. (a) Subject to sub. (6), if property that is the subject of a specific gift is taken by condemnation prior to the death of the person who executed the governing instrument, the specific beneficiary has the right to the following amounts if available under the governing instrument: 1. Any amount of the condemnation award unpaid at the time of death. 2. A general pecuniary transfer equivalent to the amount of an award paid to, or for the benefit of, the person who executed the governing instrument within one year of that person’s death. (b) In the event of an appeal in a condemnation proceeding, the award is, for purposes of this section, limited to the amount established on the appeal. Acceptance of an agreed price or a jurisdictional offer is a sale under sub. (2). (5) PROPERTY UNDER GUARDIANSHIP, CONSERVATORSHIP, OR POWER OF ATTORNEY. (a) In this subsection, “agent” means an agent under a durable power of attorney, as defined in s. 244.02 (3). (b) Subject to pars. (c) and (d) and sub. (6), if property that is the subject of a specific gift is sold or mortgaged by a guardian, conservator, or agent of the person who executed the governing instrument, or if a condemnation award or insurance proceeds are paid to a guardian, conservator, or agent, the specific beneficiary has the right to a general pecuniary transfer equivalent to the proceeds of the sale, mortgage, condemnation award, or insurance proceeds, reduced by any amount expended or incurred to restore or repair the property or to reduce the indebtedness on the mortgage, if the funds are available under the governing instrument. (c) Paragraph (b) does not apply with respect to a guardian or conservator if, subsequent to the sale, mortgage, award, or receipt of insurance proceeds, the person who executed the governing instrument is adjudicated competent and survives such adjudication for a period of one year; but in such event the rights of the specific beneficiary shall be determined as though the proceeds were paid to the owner under sub. (2), (3), or (4). (d) Paragraph (b) does not apply with respect to an agent if the person who executed the governing instrument is competent at the time of the sale, mortgage, award, or receipt of insurance proceeds but in such event the rights of the specific beneficiary shall be determined as though the proceeds were paid to the owner under sub. (2), (3), or (4). (6) LIMITATIONS. (ag) This section is inapplicable if the person who executed the governing instrument gives property during the person’s lifetime to the specific beneficiary with the intent of satisfying the specific gift and the requirement under s. 854.09 (1) is satisfied. (ar) If the person who executed the governing instrument had an intent contrary to any provision in this section, then that provision is inapplicable to the transfer. Extrinsic evidence may be used to construe the intent. (b) If part of the property that is the subject of the specific gift is destroyed, damaged, sold or condemned, the specific gift of any remaining interest in the property is not affected by this section; but this section applies to the part affected by the destruction, damage, sale or condemnation. (c) The amount that the specific beneficiary receives under subs. (2) to (5) is reduced by any expenses of the sale, by the expenses of collection of the proceeds of insurance, sale, or condemnation award and by any amount by which the income tax of the decedent or the decedent’s estate is increased because of items covered by this section. Expenses include legal fees paid or incurred.
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