Compliance Column: What Wisconsin’s Transfer by Affidavit Form Means for Bankers
WBA Creates Transfer by Affidavit Guide
By Scott Birrenkott
When an individual dies and leaves property subject to administration in Wisconsin, there are several types of estate procedures which can be followed. One such method involves the use of a form known as a Transfer by Affidavit (sometimes referred to as a Small Estate Affidavit). The Transfer by Affidavit is often a popular option due to its simplicity and ease of use. Because of this, Wisconsin banks are likely to encounter individuals seeking to use this form to close out accounts.
It is important to remember that a bank should not be advising or recommending anyone use a Transfer by Affidavit Form — or any other particular method to wrap up an estate. When a customer dies, the decedent’s family, attorney, or other party acting as the executor must determine the appropriate method. Estate matters can be quite complex, and the Transfer by Affidavit is not the only method available. Oftentimes, a relative of the decedent may come to the bank asking for advice on how to administer an estate. However, it is important that bankers know to refer these individuals to an attorney.
A Transfer by Affidavit may only be used for estates having a value of $50,000 or less (but again, note that it is not the only option available for small estates).
The individual who presents a Transfer by Affidavit is known as an “affiant.” There are four categories of affiants who may use a Transfer by Affidavit, that being an heir, trustee, person who was guardian at the time of the decedent’s death, and a person named in the will to act as a personal representative. As with all aspects of the Transfer by Affidavit, the affiant must determine their capacity and represent it on the form — not a banker. By completing the Transfer by Affidavit, the affiant makes various statements — under oath — regarding the property, and by accepting the decedent’s property, the affiant assumes certain duties. Most of these duties do not concern the bank, but there are a couple matters which do.
First, if the affiant is a person named in the decedent’s will to act as personal representative, banks must wait 30 days before releasing the property. The reason for this waiting period is that if, within the 30-day period, the bank is presented with an affidavit for the same decedent from another person, then the bank is prohibited from releasing the property. Essentially, it is a waiting period in which other parties might express an interest in the property. If this happens, then the bank should not release the property until instructed to do so by court order.
Another responsibility the affiant has is to notify the state of Wisconsin if the decedent (and/or the decedent’s spouse) ever received the benefit of certain medical services. The Transfer by Affidavit Form includes a section related to these services and, if the decedent (or spouse) received such benefits, or the affiant does not know, then the affiant must send notice to the state and provide receipt of that notice to the bank before receiving property. If the affiant does not provide this receipt, the bank cannot release the property.
Oftentimes, the Wisconsin Bankers Association (WBA) is asked certain questions such as: must a bank verify the affiant’s status (e.g., as an heir)? Or, what if the affiant lies or is mistaken regarding the property or other duties? These questions, and others, can be answered by considering the statutory protections received by banks releasing property to the affiant. That is, Wisconsin law provides for release of liability of the transferor of the property. Meaning, liability protections for the bank. This protection is contingent on the above conditions, but in general, banks should consider that by signing the Affidavit Form, the affiant certifies that the contents of the Affidavit are true and correct. Unless the bank, for some reason, had actual knowledge that an affiant was lying or otherwise misrepresenting information (e.g., the affiant describes property as being under $50,000 but bank knows for a fact that the estate holds property over $50,000), then the bank is not required to verify the information beyond what the statute otherwise requires.
While the above serves as a brief overview of Wisconsin’s Transfer by Affidavit Form, there are some additional nuances worth considering which are beyond the scope and format of this article. However, WBA recently created a Transfer by Affidavit Guide which goes into greater detail regarding the form, who may use it, how it may be used, along with a discussion of the law, step-by-step instruction for reviewing the form, and a question-and-answer section. This guide may be found on WBA’s website within the compliance resources section at wisbank.com/resources/compliance.
For any questions regarding the Transfer by Affidavit Form, or other topics, contact WBA legal at firstname.lastname@example.org or 608-441-1200. Additional compliance resources, including Q&A’s, can be found by visiting wisbank.com/resources/compliance.