Selling a House After Your Spouse Dies in Wisconsin: Title, Taxes and Timing

Most of the inherited-house calls we take come from grown children sorting out a parent's place. A smaller number come from the person who still lives there: a wife or husband who has just lost their spouse, is now alone in a house the two of them bought together, and has started to wonder whether they can keep it, whether they should, and what they would even have to do to sell it.

The answer to almost all of that depends on one thing that most couples never looked at again after the closing: exactly how the deed was written. In Wisconsin, a house held one way passes to the surviving spouse with a single form recorded at the county Register of Deeds. Held another way, it needs a probate court. And in a family with children from an earlier marriage, the wrong form of ownership and no will can mean that part of the house does not go to the spouse at all.

This guide is for surviving spouses in Appleton, Green Bay, Oshkosh and the rest of the state. It covers how to read the deed, the paperwork that puts the house in your name, the mortgage, the federal tax rules that work in a widow's or widower's favour, and how to decide whether to sell, and when. It is general information about how these processes work, not legal or tax advice about your situation. For that, talk to a Wisconsin probate attorney and a tax preparer, and take this article along if it helps.

The short version

• Find the deed first. Whether you need a court depends on the words on it, not on the will.
• If the deed says "survivorship marital property" or "joint tenants", the house is usually already yours. One recorded form, the Termination of Decedent's Interest, puts that on the public record.
• If it says plain "marital property", "tenants in common", or names only your late spouse, their share usually goes through probate or a court confirmation before anyone can sell.
• You can keep paying the mortgage. Federal law stops the lender calling the loan due just because the house passed to a surviving spouse.
• The tax rules lean your way. Wisconsin is a community property state for federal tax purposes, so a marital-property house usually gets a full new tax basis, and a sale within two years of the death can still use the married $500,000 exclusion.
• There is no Wisconsin estate tax for deaths after 2007, and no Wisconsin inheritance tax.

Start with the deed, not the will

A will only controls property that is still in the deceased person's name when they die. A great deal of a married couple's property never gets there, because the way it is titled moves it to the surviving spouse automatically. So before anybody reads the will, somebody should read the deed.

The recorded deed is at the Register of Deeds in the county where the house sits, in the county seat: Appleton for Outagamie County, Green Bay for Brown County, Oshkosh for Winnebago County. Many Wisconsin counties also let you search for and buy copies online. You are looking for the words right after the names of the buyers, sometimes called the vesting.

Why the date of the deed matters too

Wisconsin adopted its marital property system in 1986. Under the statute, the "determination date" for a couple is the latest of their marriage date, the date both spouses became Wisconsin residents, and January 1, 1986 (Wis. Stat. § 766.01(5)). For a deed made after that date, the statute gives particular meanings to the ownership words. A joint tenancy created exclusively between spouses after the determination date is treated as survivorship marital property, and a tenancy in common exclusively between spouses is treated as plain marital property (§ 766.60(4)(b)). A couple who bought a house in Kaukauna in 1978 and never refinanced the deed may hold it differently from a couple who bought in De Pere in 2004, even if the words look similar.

The common ways a married couple's house is titled

Survivorship ownership: one form at the Register of Deeds

When the house was held as survivorship marital property, Wisconsin law is blunt: on the death of a spouse, that spouse's ownership rights "vest solely in the surviving spouse by nontestamentary disposition at death", and the first spouse to die cannot leave any of it to anyone else by will (§ 766.60(5)(a)). Joint tenancy works the same way in practice. You already own the whole house. What the public record does not yet show is that your spouse's interest has ended.

Wisconsin fixes that with an application recorded at the Register of Deeds instead of a court case. The statutes are § 867.045 for joint tenancies and § 867.046 for survivorship marital property, and the form the Registers of Deeds supply is the Wisconsin Register of Deeds Association's Termination of Decedent's Interest, still widely called the HT-110. Once it is recorded, the statute says it has the same force as if a probate court had issued it.

What you bring

• The form itself, signed under oath. The signature must be notarized, or completed in front of the Register of Deeds staff.
• A copy of the deed that created the joint tenancy or survivorship ownership.
• The legal description of the property, attached or printed on the form.
• A copy of a property tax bill — the statute asks for the bill for the year before the death or the most recent one, though some counties have waived recording it. Ask yours.
• An electronic real estate transfer return receipt. The Wisconsin Department of Revenue says a transfer return must be filed with this form, and that the transfer is exempt from the transfer fee because it passes "by descent or survivorship" (Wisconsin DOR; § 77.25(11)).
• The recording fee, which was $30 at the counties we checked. Check your own county's current fee before you go.

Requirements vary a little from county to county, so call the Register of Deeds office in your county seat before you go; they cannot give legal advice, but they will tell you what their office needs.

Who signs

For a joint tenancy, any person interested in the property can sign. For survivorship marital property, the form is signed by the surviving spouse. If neither the spouse nor anyone else entitled to start the process has done it within 90 days of the death, the statute lets any interested person apply (§ 867.046(2m)). That is mostly useful for a buyer or a title company tidying up a record years later. For you, it means there is no penalty for waiting a few weeks.

When the house was not held with survivorship

If the deed says plain "marital property", "tenants in common", or carries only your late spouse's name, the picture changes. Under Wisconsin's marital property law you generally already own your own half of anything acquired during the marriage. The question is your spouse's half, which is part of their estate and cannot simply be signed over by you.

With a will that leaves it to you

If the will leaves the house, or everything, to you, the usual route is probate. Most Wisconsin estates use informal administration through the probate registrar rather than a judge, and the personal representative — often the surviving spouse — gets Domiciliary Letters that let them sign a deed. Wisconsin also has a court procedure called summary confirmation of interest in property, where the spouse petitions the probate court in the county where the decedent lived and the court issues a certificate that is then recorded (§ 867.046(1m)). Which route fits depends on what else is in the estate, so this is the point to talk to a probate attorney.

Without a will: the blended-family trap

Wisconsin's intestacy statute, § 852.01, gives the surviving spouse the entire estate if the deceased spouse had no children, or if all of their children are also the survivor's children. If the deceased spouse had a child from an earlier relationship, the rule is different: the surviving spouse takes one half of the decedent's property other than the decedent's interest in marital property, and the remainder goes to the decedent's children. In plain terms, in a second marriage with no will and no survivorship deed, your late spouse's half of the house can pass to their children.

That is a hard thing to discover after a funeral, and it is also exactly the situation that turns a house sale into a family negotiation. It is worth a consultation with a probate attorney before anyone lists, signs, or promises anything.

Asking the court to assign you the home

There is a specific protection for a surviving spouse who wants to stay. Under § 861.21, if the will (or other governing document) does not give the deceased spouse's interest in the home specifically to someone else, the survivor can petition the court to have that whole interest assigned to them. The petition has to be filed within six months of the death unless the court extends the time. The catch is that the spouse pays the estate for the value of any part of that interest that would not otherwise have come to them, and generally has a year from the death to make that payment. For a spouse who wants to keep the house, that can be the difference between keeping it and being forced to sell it.

Trusts and transfer-on-death deeds

Plenty of Fox Valley couples set up a revocable living trust or recorded a transfer-on-death designation precisely to avoid all of the above. If the house was deeded to a trust, the successor trustee — very often the surviving spouse — signs any deed under the trust's terms, and no court is involved. If a transfer-on-death beneficiary was named on the deed, that beneficiary records the same Termination of Decedent's Interest form, and the transfer is exempt from the transfer fee under § 77.25(11m).

If the trust paperwork is in a drawer somewhere and you are not sure the house was ever actually deeded into it, the recorded deed answers that question too. A trust that was signed but never funded with the house does not control it.

The mortgage: you can keep paying it

The single most common worry we hear is that the bank will call the loan the moment it learns the borrower died. For an ordinary home loan on a one-to-four-unit house, federal law says it cannot do that for this reason alone. The Garn-St Germain Act bars a lender from enforcing a due-on-sale clause on a transfer on the death of a joint tenant, a transfer to a relative resulting from the death of a borrower, or a transfer where the spouse of the borrower becomes an owner of the property (12 U.S.C. § 1701j-3(d)).

The federal mortgage-servicing rules go a step further. A spouse who becomes an owner this way is a "successor in interest" under Regulation X, and once the servicer has confirmed your identity and your ownership you become a confirmed successor in interest (12 CFR 1024.31). In practice that is what gets you statements, payoff figures and loss-mitigation options in your own name, even if you were never on the note. Send the servicer a copy of the death certificate and the recorded deed or Termination of Decedent's Interest, and ask in writing to be confirmed.

Taxes, part one: the basis reset

Capital gains tax on a house sale is figured on the difference between the sale price and your basis, which is roughly what was paid for the house plus improvements. A couple who bought in Grand Chute or Menasha decades ago can have a very low basis and a large paper gain. A spouse's death changes the basis, and Wisconsin couples get an unusually good version of that change.

The IRS lists Wisconsin among the community property states (IRS Publication 555). For community property, IRS Publication 523 says that when either spouse dies, "the total fair market value of the community property becomes the basis of the entire property, including the part belonging to the surviving spouse," provided at least half the value is includible in the deceased spouse's gross estate — whether or not the estate has to file a return (IRS Publication 523). Outside community property states, only the deceased spouse's half normally gets that reset.

Whether your particular house qualifies depends on whether it was marital property, which is a legal question as well as a tax one, so this is a conversation for a tax preparer who works with Wisconsin estates. What is worth doing now, whoever does the return, is getting a written value as of the date of death. An appraisal dated close to the death is the cleanest evidence of the new basis, and it is much harder to reconstruct three years later.

Taxes, part two: the two-year window for the $500,000 exclusion

A married couple selling their main home can generally exclude up to $500,000 of gain; a single seller, $250,000. A surviving spouse does not drop straight to the single figure. Under the rules in IRS Publication 523, you may still take the $500,000 exclusion if all of the following are true:

• you sell the home within two years of your spouse's death;
• you have not remarried at the time of the sale;
• neither you nor your late spouse took the exclusion on another home sold less than two years before this sale; and
• you meet the two-year ownership and residence requirements, counting your late spouse's time of ownership and residence if needed.

With the basis reset, many surviving spouses in this part of Wisconsin will have little or no taxable gain either way, so the two-year window is not a reason to rush. It matters most for a house bought long ago that has risen a great deal in value, and for a surviving spouse who is fairly sure they will move eventually. If that is you, it is worth knowing the date.

No Wisconsin estate or inheritance tax

The Wisconsin Department of Revenue states plainly that there is no estate tax for decedents dying after December 31, 2007 (Wisconsin DOR). Wisconsin's separate inheritance tax was repealed long before that. The federal estate tax applies only to very large estates and, for a married couple, property passing to a surviving spouse is generally covered by the federal marital deduction. A final income tax return for your spouse for the year of death is still due, and that is where a preparer earns their fee.

If you sell: the condition report and the paperwork

A surviving spouse selling a house they lived in is an ordinary seller under Wisconsin's disclosure law. The exemption from the Real Estate Condition Report for personal representatives and other court-supervised fiduciaries applies only to one who has never occupied the property, so it does not fit a spouse selling their own home. Our guide to what Wisconsin sellers have to disclose covers who must fill out the report and what goes on it. If you know about a problem with the house, say so.

At closing, the title company will want to see the record that puts the house in your name: the recorded Termination of Decedent's Interest, the court certificate, or Domiciliary Letters and a personal representative's deed if it went through probate. If it is a sale by the estate, the personal representative signs; if the house is already yours by survivorship, you sign alone. The same statute protects a buyer who relies in good faith on a recorded termination, which is why title companies are comfortable with it.

Keep, sell now, or wait

There is no right answer here, only a set of trade-offs. These are the ones surviving spouses in the Fox Valley tend to weigh.

Listing versus selling direct

If the house is in good shape and you have the energy for showings, listing with an agent will usually produce the highest price. If the house needs work your spouse always meant to get to, is full of forty years of belongings, or you simply cannot face strangers walking through your bedroom right now, a direct sale is the quieter road. Our comparison of a cash offer versus listing in Wisconsin walks through the arithmetic honestly, including where a cash buyer is the worse deal.

The first sixty days: what actually needs doing

1. Order several certified death certificates. The servicer, the insurer, the Register of Deeds and the title company may each want one.
2. Call the homeowner's insurer. If the policy is in your spouse's name, ask to have it reissued or endorsed to you. If the house will sit empty while you stay with family, ask about vacancy terms.
3. Keep paying the mortgage, taxes and insurance from an account you can access, and tell the servicer in writing that your spouse has died.
4. Get a copy of the recorded deed and read the vesting.
5. Record the Termination of Decedent's Interest if it applies, or book a consultation with a probate attorney if it does not.
6. Ask for a date-of-death valuation while it is easy to get.
7. Hold off on anything permanent — a listing, a quitclaim to a child, or a sale — until those are done.

Where we fit

We buy houses from surviving spouses across Wisconsin, and we try to be the least stressful part of a very hard year. The process is the one on our how it works page: one of us comes and walks the house, we send a written offer with the math shown, and we close at a Wisconsin title company on the date you pick. You can leave the contents you do not want, and our On-Time Guarantee stands behind that date. If you need a few weeks after closing to move, say so.

What we will not do is hurry you. If the house still needs a Termination of Decedent's Interest or a probate opening, we would rather you get that done properly and call us after. And if the honest answer is that you would do better listing, or staying, we will tell you that too.

If you are sorting this out for a house in Green Bay, De Pere, Neenah or anywhere in the Wisconsin counties we buy in, our page on selling an inherited property and the fuller guide to selling an inherited house in Wisconsin cover the estate side in more detail, and our page on downsizing covers the move itself. The Wisconsin selling FAQ answers a lot of the smaller questions.

Frequently asked questions