State law
Wisconsin: Beneficiary Disputes and Interpleader Under Wisconsin Law
Wisconsin's revocation statute also cuts out the former spouse's relatives, and it lets a court consider extrinsic evidence that the decedent intended otherwise. Before 1999 the default ran the other way for life insurance, which is why federal courts were asked whether the change could apply to older policies.
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The former spouse’s relatives are cut out too
Wisconsin’s statute is broader than most. A divorce, annulment or similar event “[r]evokes any revocable disposition of property made by the decedent to the former spouse or a relative of the former spouse in a governing instrument.”1 A “relative of the former spouse” is someone related to the former spouse by blood, adoption or marriage who, after the divorce, is no longer related to the decedent.1 A contingent designation of a former stepchild or former in-law who was never adopted can therefore fall along with the former spouse’s own designation.
The statute applies only to instruments the decedent signed before the divorce. Revoked provisions take effect “as if the former spouse and relatives of the former spouse disclaimed the revoked provisions.”1
Five exceptions, plus intent
Under § 854.15(5)(am), the statute does not apply if:1
- the express terms of the governing instrument, a court order or a property-division contract between the spouses “provide otherwise”;
- the divorce is nullified; or
- the two remarry or enter a new domestic partnership before the death.
Under § 854.15(5)(bm), a provision does not apply where the person who signed the instrument “had an intent contrary to any provision in this section,” and “Extrinsic evidence may be used to construe the intent.”1 Unlike states that require written proof, Wisconsin allows a former spouse to try to prove from outside the paperwork that the insured meant the designation to stand. As Hanson put it, the insured “merely had to perform some small affirmative act indicating his intent.”2
A reversed default, applied to older policies
Before the 1998 probate code, a former spouse named on a life insurance policy generally kept the benefit unless the decree divested that interest. The new rule applied to deaths on or after January 1, 1999, and federal courts were asked whether applying it to older policies and divorces violated the Contract Clause. Both decisions below said no, and the official annotation cites Hanson for that point.1 The U.S. Supreme Court later reached the same conclusion about Minnesota’s similar statute in Sveen v. Melin (2018).
Decisions
Otto v. Estate of Moen (W.D. Wis. 2000)
- Facts
- A fraternal benefit society interpleaded three life insurance contracts and two annuities that named the insured's wife. The couple divorced in February 1998, and the judgment awarded each spouse his or her own policies and imposed no duty to insure the other. The insured died in June 1999 without changing the forms. The former wife argued that applying the new statute would impair her contract rights.
- Holding
- The statute "operates prospectively only and . . . impairs no existing contracts." Up to his death, the insured could have kept his former wife as beneficiary by saying so; the statute "is nothing more than a default position." The $93,495.27 went to the contingent beneficiaries.
- Why it matters
- Any contract right the beneficiary had arose only at death, after the statute already applied.
Opinion: W.D. Wis. (PDF).
Allstate Life Ins. Co. v. Hanson (E.D. Wis. 2002)
- Facts
- Spouses who married in 1989 each bought a $500,000 policy naming the other. Their 1997 marital settlement agreement awarded each spouse his or her own policy and stated that neither had to insure the other, but it did not change the designations. After the insured died, the insurer interpleaded $509,189.80 in state court between the former wife and the insured's mother, and the mother removed the case.
- Holding
- The former wife had only a "revocable expectancy," not a vested right. Any impairment of the insured's own contract was not substantial and was outweighed by the statute's purposes. The court denied her summary judgment motion. It also held that defects in the removal (a forum-state defendant and no co-defendant consent) were not jurisdictional and were waived when no one moved to remand.
- Why it matters
- The opinion explains why the old Wisconsin default favored former spouses and why the legislature reversed it. Its removal ruling shows that a § 1335-eligible case removed improperly can stay in federal court unless someone objects in time.
Opinion: 200 F. Supp. 2d 1012 (Justia).
Elsewhere on this site
- Jones v. Prudential (W.D. Wis. 2025): under an ERISA plan, a roommate was not a “domestic partner,” and the plan’s default order controlled. Plan terms, not Wisconsin law, decided that case; see federal programs.
- American General v. Ball (E.D. Wis.), a change of beneficiary processed while a divorce was pending, is discussed in divorce and beneficiary designations.
Related guides
- State law differences
- Divorce and beneficiary designations
- Change of beneficiary
- Statutory vs. Rule 22 interpleader