## Facts

- Genevieve Kobylski (also known as Genevieve Hellstern) and Geza Hellstern married on February 20, 1982; both were widowed, each had children from prior marriages, and they had no children together.
- At the time of the marriage, Genevieve owned a residence titled solely in her name; the couple lived in that home for the entire marriage, and title never changed.
- During the marriage, the spouses paid household expenses for the residence—including property taxes, utilities, and insurance—from joint checking/savings accounts.
- The spouses also paid for improvements to the residence with joint funds, and Geza performed manual labor on the property (including painting, yard work, and assisting Genevieve’s son with enlarging a one-car garage).
- Genevieve executed a will in June 1979 (before the marriage) leaving her estate to her children from her prior marriage.
- Genevieve died in June 1990. Geza, as surviving spouse, made a statutory election to take marital-property-based benefits.
- In the probate proceedings (Walworth County Circuit Court), Geza sought to have the residence treated as marital property. He presented documentation of marital funds spent on improvements.
- The probate court ruled (1) the residence had been reclassified as marital property under Wis. Stat. § 766.63 and awarded Geza one-half of its value, (2) Geza was not liable to the estate for unpaid property taxes on the residence, and (3) Geza was not liable to the estate for repayment of an alleged automobile loan.
- The estate appealed those rulings.

## Issues

1. Whether the probate court erred in reclassifying Genevieve’s separately titled residence as marital property under Wis. Stat. § 766.63 based on the use of marital funds and Geza’s labor for improvements and expenses.
2. Whether the probate court erred in determining that Geza was not liable to the estate for unpaid property taxes on the residence.
3. Whether the probate court erred in determining that Geza was not liable to the estate for repayment of an alleged loan connected to the spouses’ automobile purchase.

## Decision

- The court of appeals reversed the probate court’s ruling that the residence was reclassified as marital property and remanded for further proceedings applying the proper mixed-property analysis.
- The court of appeals reversed the ruling that Geza had no liability to the estate for unpaid property taxes and remanded for reconsideration under the correct legal framework.
- The court of appeals affirmed the ruling that Geza was not liable to the estate for repayment of the automobile loan.
- Disposition: affirmed in part; reversed in part; and remanded with directions.

## Legal Principles

- Under Wisconsin’s Marital Property Act, Wis. Stat. § 766.63 (mixed property), the fact that marital funds are used to pay expenses or make improvements to one spouse’s individually owned, separately titled real estate does not automatically convert the entire asset into marital property.
- When marital property is contributed to a spouse’s individual property, the remedy is commonly reimbursement measured by the increase in the property’s value attributable to the marital contributions, rather than wholesale reclassification of the underlying asset.
- Mixed-property analysis focuses on classification rules and tracing concepts; the court must apply the statutory scheme rather than treating marital expenditures and marital labor as, by themselves, a transfer of ownership status.
- Liability for obligations tied to the residence (such as unpaid property taxes) must be determined under the Marital Property Act and related probate rules, considering how the obligation arose and how such expenses were handled during the marriage; an incorrect legal approach requires reversal and remand.
- An asserted intra-spousal “loan” connected to a purchase made with joint funds and resulting in jointly titled property will not be enforced against the surviving spouse absent sufficient proof of a true debtor-creditor agreement; factual findings on that point are upheld unless clearly erroneous.

## Conclusion

The Wisconsin Court of Appeals held that the probate court misapplied Wis. Stat. § 766.63 by treating marital payments and Geza Hellstern’s labor on Genevieve Kobylski Hellstern’s separately titled residence as grounds to reclassify the entire home as marital property; it reversed and remanded for proper mixed-property and reimbursement analysis, also reversed and remanded the determination of Geza’s liability for unpaid property taxes, and affirmed the finding that Geza did not owe the estate repayment of the claimed automobile loan.


In re Estate of Kobylski, 178 Wis. 2d 158, 503 N.W.2d 369 (1993)