If charges against income are of unusual amount, the trustee may by means of reserves or other reasonable means charge them over a reasonable period of time and withhold from distribution sufficient sums to regularize distributions.
The following charges shall be made against principal:
Charges not provided for in par. (a)
, including fees and expenses of attorneys, accountants, appraisers, investment counselors, custodians and agents, the cost of investing and reinvesting principal, the payments on principal of an indebtedness including a mortgage amortized by periodic payments of principal, expenses for preparation of property for rental or sale, and attorney fees and other expenses in judicial proceedings unless the court directs otherwise.
Extraordinary repairs or expenses incurred in making a capital improvement to principal, including special assessments.
Any tax levied upon profit, gain, or other receipts allocated to principal notwithstanding denomination of the tax as an income or franchise tax by the taxing authority.
If a death tax or generation skipping transfer tax is levied in respect to a trust, any amount apportioned to the trust, or any beneficial interest in the trust.
The following charges shall be made in equal portions against income and principal:
The trustee's regular compensation, whether based on a percentage of principal or income.
Special compensation of trustees, and trustee's compensation computed on principal as an acceptance, distribution, or termination fee.
Regularly recurring charges payable from income shall be apportioned to the same extent and in the same manner that income is apportioned under sub. (4)
Income payments and accumulations. 701.21(1)
Distribution of income.
Where a beneficiary is entitled to receive income from a trust, but the creating instrument fails to specify how frequently it is to be paid, the trustee shall distribute at least annually the income to which such beneficiary is entitled.
(2) Permitted accumulations.
No provision directing or authorizing accumulation of trust income shall be invalid.
(3) Charitable trust accumulations.
A trust containing a direction or authorization to accumulate income from property devoted to a charitable purpose shall be subject to the general equitable supervision of the court with respect to any such accumulation of income, including its reasonableness, amount and duration.
(4) Disposition of accumulated income.
Income not required to be distributed by the creating instrument, in the absence of a governing provision in the instrument, may in the trustee's discretion be held in reserve for future distribution as income or be added to principal subject to retransfer to income of the dollar amount originally transferred to principal; but at the termination of the income interest, any undistributed income shall be distributed as principal.
Distributions in kind by trustees; marital bequests.
In case of a division of trust assets into 2 or more trusts or shares, any distribution or allocation of assets as an equivalent of a dollar amount fixed by formula or otherwise shall be made at current fair market values unless the governing instrument expressly provided that another value may be used. If the governing instrument requires or permits a different value to be used, all assets available for distribution, including cash, shall, unless otherwise expressly provided, be so distributed that the assets, including cash, distributed as such an equivalent will be fairly representative of the net appreciation or depreciation in the value of the available property on the date or dates of distribution. A provision in the governing instrument that the trustee may fix values for purposes of distribution or allocation does not of itself constitute authorization to fix a value other than current fair market value.
The valuation of assets for distribution is the current market value at the time of distribution. Estate of Naulin, 56 W (2d) 100, 201 NW (2d) 599.
Removal of trusts. 701.23(1)(1)
Removal to foreign jurisdiction.
Unless the creating instrument contains an express prohibition or provides a method of removal, a circuit court having jurisdiction of a trust created by a will admitted to probate in such court may, upon petition of a trustee or a beneficiary with the consent of the trustee and after a hearing as to which notice has been given to the trustee and other interested persons, order removal of such trust to another state where the court finds that such removal is in accord with the express or implied intention of the settlor, would aid the efficient administration of the trust or is otherwise in the best interests of the beneficiaries. Such order may be conditioned on the appointment of a trustee in the state to which the trust is to be removed and shall be subject to such other terms and conditions as the court deems appropriate for protection of the trust property and the interests of the beneficiaries. Upon receipt of satisfactory proof of compliance with all terms and conditions of the order, the court may discharge the local trustee from further responsibility in the administration of the trust.
(2) Removal to this state.
Unless the creating instrument contains an express prohibition against removal or provides a method for removal, a court may, upon the petition of a foreign trustee or beneficiary with the consent of the trustee, appoint a local trustee to receive and administer trust property presently being administered in another state. The local trustee may be required to give bond conditioned on the faithful performance of his or her duties or to meet any other conditions required by a court in the other state before permitting removal of the trust to this state.
History: 1977 c. 449
; 1993 a. 486
Applicability of ss. 701.01 to 701.23.
Except as otherwise provided in s. 701.19 (9) (a)
, ss. 701.01
are applicable to a trust existing on July 1, 1971, as well as a trust created after such date and shall govern trustees acting under such trusts. If application of any provision of ss. 701.01
to a trust in existence on August 1, 1971, is unconstitutional, it shall not affect application of the provision to a trust created after that date.
History: 1971 c. 66
; 1977 c. 309
Disclaimer of transfers under nontestamentary instruments. 701.27(1)(a)
"Beneficiary under a nontestamentary instrument" includes any person who receives or might receive property or an interest in property under the terms or legal effect of a nontestamentary instrument.
"Nontestamentary instrument" means any instrument other than a will which effectively controls the disposition of property or an interest in property. This term includes, without limitation, an inter vivos instrument exercising a power of appointment whether created by will or by nontestamentary instrument, life insurance policies and annuity contracts, inter vivos trusts, conveyances, contracts and choses in action.
A person who is a beneficiary under a nontestamentary instrument, person succeeding to a disclaimed interest created by a nontestamentary instrument, donee of a power created by nontestamentary instrument, appointee under a power exercised by nontestamentary instrument or taker in default under a power created by nontestamentary instrument, may disclaim any property or interest in property, including contingent or future interests or the right to receive discretionary distributions, by delivering a written instrument of disclaimer under this section.
Upon the death of a joint tenant that occurs on or after June 7, 1996, a surviving joint tenant may disclaim any property or interest in property that would otherwise accrue to him or her by right of survivorship and that is the subject of the joint tenancy. A surviving joint tenant may disclaim the entire interest if he or she fulfills the requirements under section 2518
of the internal revenue code.
Any property or interest in property or portion of property or interest in property that is disclaimed under subd. 1.
shall become an asset in the decedent's probate estate.
Survivorship marital property.
Upon the death of a spouse, the surviving spouse may disclaim the decedent spouse's interest in survivorship marital property.
Property may be disclaimed in whole or in part, except that a partial disclaimer of property passing by nontestamentary instrument or by the exercise of a power may not be made if partial disclaimer is expressly prohibited by the instrument or by the instrument exercising the power.
The right to disclaim exists notwithstanding any limitation on the interest of the disclaimant in the nature of a spendthrift provision or similar restriction.
A person's right to disclaim survives the person's death and may be exercised by the person's personal representative or special administrator upon receiving approval from the court having jurisdiction of the person's estate after hearing upon notice to all interested persons if the personal representative or special administrator has not taken any action which would bar the right to disclaim under sub. (7)
Declare the disclaimer and the extent of the disclaimer;
Notwithstanding par. (a)
, any disclaimer which meets the requirements of section 2518
of the internal revenue code, or any other provisions of federal law, constitutes an effective disclaimer under this section.
Disclaiming a present interest.
An instrument disclaiming a present interest shall be executed and delivered not later than 9 months after the effective date of the nontestamentary instrument, except that, for cause shown, the period may be extended by a court of competent jurisdiction, either within or after the 9-month period, for such additional time as the court deems just. The effective date of a revocable instrument or contract is the date on which the person having the power to revoke no longer has the power to revoke it or to transfer to himself, herself or another person the equitable ownership of the property or interest which is the subject of the disclaimer.
Disclaiming a future interest.
An instrument disclaiming a future interest shall be executed and delivered not later than 9 months after the event that determines that the taker of the property or interest is finally ascertained and his or her interest indefeasibly fixed, except that, for cause shown, the period may be extended by a court of competent jurisdiction, either within or after the 9-month period, for such additional time as the court deems just.
Future right to income or profits.
Notwithstanding pars. (a)
, an instrument disclaiming the future right to receive mandatory distributions of income or profits from any source may be executed and delivered at any time.
Persons under 21.
Notwithstanding pars. (a)
, a person under 21 years of age may disclaim at any time not later than 9 months after the date on which the person attains 21 years of age.
Interests arising by disclaimer.
Notwithstanding pars. (a)
, a person whose interest in property arises by disclaimer or by default of exercise of a power created by nontestamentary instrument may disclaim at any time not later than 9 months after the day on which the prior instrument of disclaimer is delivered, or the date of death of the donee of the power, as the case may be.
(5) Delivery and filing of disclaimer. 701.27(5)(a)(a)
In addition to any requirements imposed by the creating instrument, the instrument of disclaimer is effective only if, within the time specified under sub. (4)
, it is delivered to and received by:
The transferor of the property or interest disclaimed, if living;
The personal representative or special administrator of the deceased transferor of the property; or
Delivery to trustee.
If the trustee of any trust to which the interest or power relates does not receive the instrument of disclaimer under par. (a)
, a copy shall also be delivered to the trustee.
When delivery is made to the personal representative or special administrator of a deceased transferor, a copy of the instrument of disclaimer shall be filed in the probate court having jurisdiction.
Failure to deliver or file.
Failure to deliver a copy of the instrument of disclaimer to the trustee under par. (b)
or to file a copy in the probate court under par. (c)
, within the time specified under sub. (4)
, does not affect the validity of any disclaimer.
If real property or an interest in real property is disclaimed, a copy of the instrument of disclaimer may be recorded in the office of the register of deeds of the county in which the real estate is situated.
Property not vested.
The property or interest disclaimed under this section shall be deemed not to have been vested in, created in or transferred to the disclaimant.
Unless the transferor of the property or donee of the power has otherwise provided, the property or interest disclaimed devolves as if the disclaimant had died before the effective date of the nontestamentary instrument; or if the disclaimant is an appointee under a power exercised by nontestamentary instrument, as if the disclaimant had died before the effective date of the exercise of the power; or if the disclaimant is a taker in default under a power created by nontestamentary instrument, as if the disclaimant had predeceased the donee of the power. A disclaimer relates back for all purposes to the effective date of the nontestamentary instrument; or if the disclaimant is an appointee under a power exercised by nontestamentary instrument, to the effective date of the exercise of the power; or if the disclaimant is a taker in default under a power created by nontestamentary instrument, to the last possible date for exercise of the power. A disclaimer of the future right to receive mandatory distributions of income or profits relates to the period stated in the disclaimer.
Unless the instrument creating the future interest manifests a contrary intent, a future interest limited to take effect in possession or enjoyment after the termination of the interest which is disclaimed takes effect as if the disclaimant had died before the effective date of the nontestamentary instrument or, if the disclaimant is an appointee under a power exercised by nontestamentary instrument, as if the disclaimant had died before the effective date of the exercise of the power.
This subsection does not apply to a disclaimer under sub. (2) (b)
, the effect of which is provided in sub. (2) (b) 2.
A person's right to disclaim property or an interest in property is barred by the person's:
Assignment, conveyance, encumbrance, pledge or transfer of the property or interest or a contract therefor;
Acceptance of the property or interest or benefit of the property.
Effect upon successors in interest.
The disclaimer or the written waiver of the right to disclaim is binding upon the disclaimant or person waiving and all persons claiming through or under him or her.
(8) Nonexclusiveness of remedy.
This section does not abridge the right of a person to waive, release, disclaim or renounce property or an interest in property under any other statute, the common law, or as provided in the creating instrument.
This section applies to property or an interest in property existing or created on or after May 13, 1978 if the time for delivery of a disclaimer under this section has not expired.
NOTE: 1991 Wis. Act 301
, which affected this section, contains extensive legislative council notes.