Making a Wisconsin TOD Designation When You Co-Own Property

Before you can make your TOD designation, you must know how you own the property with your co-owner. Your co-ownership method will determine whether you should make the TOD designation with your co-owner or whether you should make one alone.

In Wisconsin, there are several common ways to co-own property. Co-owners who are not married to each other can own property as joint tenants or as tenants in common. Co-owners who are married to each other can own property as survivorship marital property or as marital property.

If You're Not Married to Your Co-Owner

If you're not married to your co-owner, then you co-own your property either as "joint tenants" or as "tenants in common."

Take a look at the deed that transferred the property to you. It might say, for example, "to Ellen Bauman and Edward M. Bauman, as joint tenants," or "to Jonathan G. Costa and Sandra L. White, as tenants in common."

Joint Tenancy

Joint tenants own the property with survivorship rights. That means that the owners cannot leave their share of the property to whomever they wish. Instead, when one co-owner dies, that co-owner's share of the property will automatically go to the surviving co-owner(s).

When you make a TOD designation together with the other joint tenant(s), you are naming someone to receive the property after all of the joint tenants have died.

Example: Claire and Kendra co-own their home as survivorship tenants. They make a TOD designation together and name Oscar as the beneficiary. When Claire dies, Claire's half of the home goes to Kendra, who becomes the sole owner of the entire home. When Kendra dies, the home goes to Oscar under the TOD designation.

Tenancy in Common

Unlike joint tenants, tenants in common own the property without survivorship rights. This means that each owner can pass that owner's share of the property to whomever the owner wishes.

If your deed doesn't state how you own the property, you and your co-owners are presumed to own it as tenants in common, unless you've agreed otherwise in writing.

If you own your property as a tenant in common, you must create a TOD designation on your own (without the other tenants in common). That TOD designation will transfer only your share of the property to the TOD beneficiary when you die.

Example: Raymond and Jack, who are brothers, own a house together as tenants in common. Raymond signs a TOD designation that leaves his half-interest to his daughter. At Raymond's death, his daughter will become a tenant in common with Jack.

Your co-owners are free to make their own TOD designations to transfer their individual shares of the property, and they may name the same beneficiary as you, or they may choose different beneficiaries.

If You're Married to Your Co-Owner

If you co-own your property with your spouse, then you co-own your property either as "survivorship marital property" or as "marital property."

Survivorship Marital Property

If you're married, you might co-own property with your spouse as survivorship marital property. For purposes of the TOD designation, survivorship marital property works as a joint tenancy: You cannot name a beneficiary for just your share of the property because when one spouse dies, the surviving spouse automatically owns the entire property. If you make a TOD designation together, it will take effect only after you both have died.

Marital Property

If you're married, you might co-own property with your spouse as marital property (without rights of survivorship). For purposes of the TOD designation, marital property works as a tenancy in common: You can use a TOD designation to name a beneficiary for your share of the property, but make the designation on your own, not with your spouse. Your spouse can make a separate TOD designation for your spouse's share of the property.

You Might Be Wrong About What (or How) You Own

Knowing how you own your property can be tricky for married people in Wisconsin because how you own your property doesn't always match what's on your deed.

For the purpose of making this TOD designation, two common circumstances could make your ownership or ownership type different than what you see on the deed.

When the Property is Your Primary Residence

In Wisconsin, if a married couple buys a house as marital property (meaning they bought the house during marriage, while living in Wisconsin, and on or after January 1, 1986) and that property serves as their primary residence, then Wisconsin considers that property "homestead property" owned as survivorship marital property (see above)—even if the word "survivorship" does not appear on the deed.

If your situation falls into this category, your spouse will own the property when you die and vice versa. So you and your spouse cannot name other beneficiaries for your individual portion of the property. If you're going to make a TOD designation, you and your spouse must do it together. The beneficiaries you name on the designation will get the property when both spouses have died.

If you want a different outcome—such as the ability to name different beneficiaries depending on who dies first—get help from an attorney.

When Only One Spouse Is On the Deed

Because Wisconsin is a community property state (called "marital property" in Wisconsin), a spouse might have rights to the property even if the deed does not list the spouse as an owner.

Under Wisconsin's marital property laws, property purchased during a marriage (and on or after January 1, 1986) belongs to both spouses equally. That is the general rule, but there are some important exceptions. For example, inherited property does not become marital property, and spouses can agree in writing to own the property in a different way.

Here are some examples that illustrate how marital property works:

EXAMPLE: Beth and Lyle, who live in Wisconsin, got married in 2001 and bought their home together in 2006. The home is considered their marital property. If the home is their primary residence (homestead), then they own the property as survivorship marital property.

EXAMPLE: Beth and Lyle, who live in Wisconsin, got married in 2001. Beth bought a rental property in her name only in 2006. This property is considered the marital property of both Beth and Lyle.

EXAMPLE: Beth bought a home in Wisconsin in 2001. She and Lyle got married in 2005. The home is not their marital property (though there are exceptions); it is Beth's individual property.

EXAMPLE: Beth and Lyle, who live in Wisconsin, got married in 2001. Beth inherited her parents' home in 2010. The home is Beth's individual property.

When making a TOD designation, if the property is marital property (purchased during marriage and on or after January 1, 1986), both spouses must sign the designation, even if only one spouse's name appears on the deed. This is because both spouses might have rights to the property.

EXAMPLE: Beth and Lyle, who live in Wisconsin, got married in 2001. Five years later, Lyle used savings from his work income to buy a vacation home with his brother. Lyle's half of the vacation property is marital property, owned equally by Beth and Lyle. If Lyle wants to make a TOD designation for his portion of the vacation home, Beth will also need to sign the deed.

Marital property law can be complex. Do not make a TOD designation now if you have any questions or concerns about your ownership rights. Instead, see a Wisconsin lawyer to get advice about your specific situation. You should also consult a lawyer in these circumstances:

• You don't live in Wisconsin (you only own property there)
• You acquired the property after you got married, but before you moved to Wisconsin
• You bought the property during your marriage but before January 1, 1986.

Should You Make Your TOD Designation With Your Co-Owner?

Below is a chart that summarizes whether to make a TOD designation alone or with your co-owner. Making that decision requires that you know how you own your property. (See above.) If you're still unsure how you own your property, get help from an attorney.