435 N.W.2d 739 | Wis. Ct. App. | 1988
This case involves the question of whether an estate is liable for any year-of-death real estate taxes on specifically devised property. We conclude that since the will in question does not provide for paying these taxes out of the estate, the estate is not liable for them. We reverse.
The pertinent facts are few and undisputed. Esther R. Karrels died on June 30,1987, before 1987 real estate taxes were levied on her residence. Karrels’ will directed that “all [her] just debts and funeral expenses be paid out of [her] estate.” The will specifically devised Karrels’ residence to Peggy McCraw. No mention of real estate taxes is made in the specific devise.
The trial court concluded that real estate taxes on specifically devised property are to be prorated to the date of decedent’s death. Liability for year-of-death real estate taxes is then to be assessed against the estate for the period up until the date of death.
Application of the law to undisputed facts presents a question of law. National Amusement Co. v. Department of Revenue, 41 Wis. 2d 261, 266, 163 N.W.2d 625, 627-28 (1969). We resolve such questions without deference to the trial court. Id.
In Wisconsin, real estate taxes are not necessarily debts. In re Calumet Brewing Co., 243 Wis. 317, 321, 10 N.W.2d 190, 192 (1943). A landowner is not personally liable for the taxes imposed upon his land until they are delinquent. Section 74.58(3)(a)l, Stats. (1985-86), pro
McCraw relies on the common law doctrine of exoneration to place the tax burden on Karrels’ estate, but such reliance is misplaced. The common law of exoneration is set forth in Estate of Budd, 11 Wis. 2d 248, 257, 105 N.W.2d 358, 363 (1960):
It is generally the rule, except where changed by statute, that, in the absence of a testamentary intention to the contrary, any debts of the testator which are secured by liens on property included in a will are payable primarily out of the personal estate.
If a debt which testator owes personally in his lifetime is secured by a mortgage or other lien upon specific property belonging to testator, such debt, like any other personal debt is to be paid out of testator’s personal estate in the absence of provisions in the will which show a contrary intention _[Emphasis added.]
Thus, there are two preconditions for application of the exoneration doctrine. First, there must be a personal debt. Second, the debt must be owed during decedent’s lifetime. McCraw argues that these conditions are met here because although “real estate taxes are only assessed ... once per year ... the obligations ... are ongoing.” We disagree.
The preconditions for exoneration are not met here. There was no obligation to pay real estate taxes during the decedent’s lifetime because the taxes had not been
McCraw next argues that there is statutory authority for placing a portion of the real estate tax burden upon the estate. Section 74.62(2), Stats. (1969), provided for proration of real estate taxes, but that section was repealed by sec. 7, ch. 339, Laws of 1969, effective in 1971. We find nothing in the current Wisconsin statutes reinstating the repealed prorating scheme. Indeed, sec. 26, ch. 339, Laws of 1969, created sec. 863.13, Stats., which states that:
[A]ll specifically devised property shall be assigned to the beneficiary without exoneration unless the will of the decedent provides that a debt which is secured by a mortgage, lien, pledge or other security agreement which constitutes an encumbrance on property which is specifically devised should be paid out of other assets in the estate and the property assigned to the beneficiary free of the encumbrance. [Emphasis added.]
We have not found, nor been directed to, any provision in Wisconsin statutory or case law that, in the absence of a contract or will provision, transforms a portion of a later-imposed tax on land into a legal obligation of the decedent. The instant case differs from Nelson v. Gunderson, 189 Wis. 139, 207 N.W. 408 (1926). In that case, the court determined that a reassessment of real estate taxes created a lien dating
By the Court. — Order reversed.
Section 72.14, Stats., states, in relevant part:
(1) EXPENDITURES BY A PERSONAL REPRESENTATIVE, SPECIAL ADMINISTRATOR OR CERTAIN DISTRIBUTEES OUT OF CERTAIN ASSETS IN HIS POSSESSION. Deductions for the following expenditures made by the personal representative or special administrator out of the assets of the decedent in his possession or advanced or paid by a distributee of any assets in his possession are allowed:
(d) If known, real estate taxes accrued during the year of the decedent’s death, or if such taxes are not known, an amount equal to one-twelfth of the taxes assessed against the land for the preceding calendar year multiplied by the number of months in the calendar year which elapsed prior to the date of death, including the month of death if the death occurred after the 15th day. Deductions allowed under this paragraph shall be considered a lien against the subject real estate reducing its market value.