SB384,121,23 16(4) A provision of a trust instrument drafted or caused to be drafted by a
17trustee, directing party, or trust protector that modifies the application of this section
18in a manner favorable to the trustee, directing party, or trust protector and
19potentially detrimental to a beneficiary is invalid with respect to the trustee,
20directing party, or trust protector unless the trustee, directing party, or trust
21protector proves that the provision was fair under the circumstances existing at the
22time the trust instrument was signed and that the existence and contents of the
23provision were adequately communicated to the settlor.
SB384,165 24Section 165. 701.1005 of the statutes is created to read:
SB384,122,4
1701.1005 Limitation of action against trustee. (1) A beneficiary may not
2commence a proceeding against a trustee for breach of trust more than one year after
3the date on which the beneficiary or a representative of the beneficiary was sent a
4report that adequately disclosed the existence of a potential claim for breach of trust.
SB384,122,7 5(2) A report adequately discloses the existence of a potential claim for breach
6of trust if it provides sufficient information so that the beneficiary or representative
7knows of the potential claim or should have inquired into its existence.
SB384,122,10 8(3) If sub. (1) does not apply, a proceeding by a beneficiary against a trustee for
9breach of trust must be commenced within 5 years after the first to occur of the
10following:
SB384,122,1111 (a) The removal, resignation, or death of the trustee.
SB384,122,1212 (b) The termination of the beneficiary's interest in the trust.
SB384,122,1313 (c) The termination of the trust.
SB384,122,15 14(4) Subsections (1) and (3) do not apply to a claim for fraud. The time for
15asserting a claim for fraud is governed by applicable law.
SB384,166 16Section 166. 701.1006 of the statutes is created to read:
SB384,122,20 17701.1006 Reliance on trust instrument. A trustee who acts in reasonable
18reliance on the terms of the trust as expressed in the trust instrument is not liable
19to a beneficiary for a breach of trust to the extent the breach resulted from the
20reliance.
SB384,167 21Section 167. 701.1007 of the statutes is created to read:
SB384,123,2 22701.1007 Event affecting administration or distribution. If the
23happening of an event, including marriage, divorce, performance of educational
24requirements, or death, affects the administration or distribution of a trust, a trustee

1who has exercised reasonable care to ascertain the happening of the event is not
2liable for a loss resulting from the trustee's lack of knowledge.
SB384,168 3Section 168. 701.1008 of the statutes is created to read:
SB384,123,6 4701.1008 Exculpation of trustee. (1) A term of a trust relieving a trustee
5of liability for breach of trust is unenforceable to the extent that it does any of the
6following:
SB384,123,97 (a) Relieves the trustee of liability for breach of trust committed in bad faith
8or with reckless indifference to the purposes of the trust or the interests of a
9beneficiary.
SB384,123,1110 (b) Was inserted as the result of an abuse by the trustee of a fiduciary or
11confidential relationship with the settlor.
SB384,123,16 12(2) An exculpatory term drafted or caused to be drafted by the trustee is invalid
13as an abuse of a fiduciary or confidential relationship unless the trustee proves that
14the exculpatory term was fair under the circumstances existing at the time the trust
15instrument was signed and that the existence and contents of the exculpatory term
16were adequately communicated to the settlor.
SB384,169 17Section 169. 701.1009 of the statutes is created to read:
SB384,123,21 18701.1009 Beneficiary's consent, release, or ratification. A trustee is not
19liable to a beneficiary for breach of trust if the beneficiary consented to the conduct
20constituting the breach, released the trustee from liability for the breach, or ratified
21the transaction constituting the breach, unless any of the following applies:
SB384,123,23 22(1) The consent, release, or ratification of the beneficiary was induced by
23improper conduct of the trustee.
SB384,124,3
1(2) At the time of the consent, release, or ratification, the beneficiary did not
2have knowledge of the beneficiary's rights or of the material facts relating to the
3breach.
SB384,170 4Section 170. 701.1010 of the statutes is created to read:
SB384,124,8 5701.1010 Limitation on personal liability of trustee. (1) Except as
6otherwise provided in the contract, a trustee is not personally liable on a contract
7properly entered into in the trustee's fiduciary capacity in the course of
8administering the trust if the trustee in the contract disclosed the fiduciary capacity.
SB384,124,12 9(2) A trustee is personally liable for torts committed in the course of
10administering a trust, or for obligations arising from ownership or control of trust
11property, including liability for violation of environmental law, only if the trustee is
12personally at fault.
SB384,171 13Section 171. 701.1011 of the statutes is created to read:
SB384,124,18 14701.1011 Interest as general partner. (1) Unless personal liability is
15imposed in the contract, a trustee who holds an interest as a general partner in a
16general or limited partnership is not personally liable on a contract entered into by
17the partnership after the trust's acquisition of the interest if the fiduciary capacity
18was disclosed in the contract.
SB384,124,21 19(2) A trustee who holds an interest as a general partner is not personally liable
20for torts committed by the partnership or for obligations arising from ownership or
21control of the interest unless the trustee is personally at fault.
SB384,124,24 22(3) If the trustee of a revocable trust holds an interest as a general partner, the
23settlor is personally liable for contracts and other obligations of the partnership as
24if the settlor were a general partner.
SB384,172 25Section 172. 701.1012 of the statutes is created to read:
SB384,125,5
1701.1012 Protection of person dealing with trustee. (1) A person other
2than a beneficiary who in good faith assists a trustee, or who in good faith and for
3value deals with a trustee, without knowledge that the trustee is exceeding or
4improperly exercising the trustee's powers is protected from liability as if the trustee
5properly exercised the power.
SB384,125,8 6(2) A person other than a beneficiary who in good faith deals with a trustee is
7not required to inquire into the extent of the trustee's powers or the propriety of their
8exercise.
SB384,125,10 9(3) A person who in good faith delivers assets to a trustee does not need to
10ensure their proper application.
SB384,125,14 11(4) A person other than a beneficiary who in good faith assists a former trustee,
12or who in good faith and for value deals with a former trustee, without knowledge
13that the trusteeship has terminated is protected from liability as if the former trustee
14were still a trustee.
SB384,125,17 15(5) Comparable protective provisions of other laws relating to commercial
16transactions or transfer of securities by fiduciaries prevail over the protection
17provided by this section.
SB384,173 18Section 173. 701.1013 of the statutes is created to read:
SB384,125,21 19701.1013 Certification of trust. (1) Instead of furnishing a copy of the trust
20instrument to a person other than a beneficiary, the trustee may furnish to the
21person a certification of trust containing the following information:
SB384,125,2322 (a) That the trust exists and the date on which the trust instrument was
23executed.
SB384,125,2424 (b) The identity of the settlor.
SB384,125,2525 (c) The identity and address of the currently acting trustee.
SB384,126,1
1(d) The powers of the trustee.
SB384,126,32 (e) The revocability or irrevocability of the trust and the identity of any person
3holding a power to revoke the trust.
SB384,126,64 (f) The authority of a cotrustee to sign or otherwise authenticate and whether
5all cotrustees or less than all cotrustees are required to sign or otherwise
6authenticate in order to exercise powers of the trustee.
SB384,126,77 (g) The manner in which title to trust property may be taken.
SB384,126,9 8(2) A certification of trust may be signed or otherwise authenticated by any
9trustee.
SB384,126,12 10(3) A trustee shall include in a certification of trust that the trust has not been
11revoked, modified, or amended in any manner that would cause the representations
12contained in the certification of trust to be incorrect.
SB384,126,14 13(4) A certification of trust does not need to contain the dispositive terms of a
14trust.
SB384,126,18 15(5) A recipient of a certification of trust may require the trustee to furnish
16copies of those excerpts from the original trust instrument and later amendments
17that designate the trustee and confer upon the trustee the power to act in the pending
18transaction.
SB384,126,24 19(6) A person who acts in reliance upon a certification of trust without
20knowledge that the representations contained therein are incorrect is not liable to
21any person for so acting and may assume without inquiry the existence of the facts
22contained in the certification. Knowledge of the terms of the trust may not be
23inferred solely from the fact that a copy of all or part of the trust instrument is held
24by the person relying upon the certification.
SB384,127,3
1(7) A person who in good faith enters into a transaction in reliance upon a
2certification of trust may enforce the transaction against the trust property as if the
3representations contained in the certification were correct.
SB384,127,8 4(8) A person making a demand for copies of the trust instrument or excerpts
5from the trust instrument, other than those excerpts described in sub. (5), in addition
6to a certification of trust is liable for costs, expenses, reasonable attorney fees and
7damages if the court determines that the person did not act in good faith in
8demanding the copies.
SB384,127,10 9(9) This section does not limit the right of a person to obtain a copy of the trust
10instrument in a judicial proceeding concerning the trust.
SB384,174 11Section 174. 701.105 (title), (1), (2) and (3) of the statutes are renumbered
12701.1201 (title), (1), (2) and (3), and 701.1201 (1), (2) and (3), as renumbered, are
13amended to read:
SB384,127,1914 701.1201 (1) (a) In the administration of any trust which that is a private
15foundation, as defined in section 509 of the internal revenue code Internal Revenue
16Code
, a charitable trust, as defined described in section 4947 (a) (1) of the internal
17revenue code
Internal Revenue Code, or a split-interest trust as defined described
18in section 4947 (a) (2) of the internal revenue code Internal Revenue Code, all of the
19following acts shall be prohibited:
SB384,127,2320 1. Engaging in any act of self-dealing, as defined in section 4941 (d) of the
21internal revenue code, which Internal Revenue Code, that would give rise to any
22liability for the tax imposed by section 4941 (a) of the internal revenue code Internal
23Revenue Code
.
SB384,128,224 2. Retaining any excess business holdings, as defined in section 4943 (c) of the
25internal revenue code, which Internal Revenue Code, that would give rise to any

1liability for the tax imposed by section 4943 (a) of the internal revenue code Internal
2Revenue Code
.
SB384,128,63 3. Making any investments which that would jeopardize the carrying out of any
4of the exempt purposes of the trust, within the meaning of section 4944 of the internal
5revenue code
Internal Revenue Code, so as to give rise to any liability for the tax
6imposed by section 4944 (a) of the internal revenue code Internal Revenue Code.
SB384,128,107 4. Making any taxable expenditures, as defined in section 4945 (d) of the
8internal revenue code, which Internal Revenue Code, that would give rise to any
9liability for the tax imposed by section 4945 (a) of the internal revenue code Internal
10Revenue Code
.
SB384,128,1411 (b) This subsection shall does not apply either to those split-interest trusts or
12to amounts thereof which that are not subject to the prohibitions applicable to
13private foundations by reason of the provisions of section 4947 of the internal
14revenue code
Internal Revenue Code.
SB384,128,21 15(2) In the administration of any trust which that is a private foundation, as
16defined in section 509 of the internal revenue code Internal Revenue Code, or which
17that is a charitable trust, as defined described in section 4947 (a) (1) of the internal
18revenue code
Internal Revenue Code, there shall be distributed, for the purposes
19specified in the trust instrument, for each taxable year, amounts at least sufficient
20to avoid liability for the tax imposed by section 4942 (a) of the internal revenue code
21Internal Revenue Code.
SB384,128,25 22(3) Subsections (1) and (2) shall do not apply to any trust to the extent that a
23court of competent jurisdiction shall determine determines that such the application
24would be contrary to the terms of the instrument governing such trust and that the
25same may not properly be changed to conform to such subsections.
SB384,175
1Section 175. 701.105 (4) of the statutes is repealed.
SB384,176 2Section 176. 701.11 of the statutes is repealed.
SB384,177 3Section 177. Subchapter XI (title) of chapter 701 [precedes 701.1101] of the
4statutes is created to read:
SB384,129,55 chapter 701
SB384,129,66 subchapter xi
SB384,129,77 uniform principal and income act
SB384,178 8Section 178. 701.1101 of the statutes is created to read:
SB384,129,12 9701.1101 Short title and scope. This subchapter may be cited as the
10Wisconsin Uniform Principal and Income Act. Subject to s. 701.1206 (2), this
11subchapter applies to a trust described in s. 701.0102 and an estate that is
12administered in this state.
SB384,179 13Section 179. 701.1102 (intro.) of the statutes is created to read:
SB384,129,14 14701.1102 Definitions. (intro.) In this subchapter:
SB384,180 15Section 180. 701.1102 (1g) of the statutes is created to read:
SB384,129,1716 701.1102 (1g) "Asset" has the meaning given for property under s. 701.0103
17(20).
SB384,181 18Section 181. 701.1106 (6) of the statutes is created to read:
SB384,129,2019 701.1106 (6) Sections 701.0410 to 701.0418 do not apply to a conversion of a
20trust to a unitrust under this section.
SB384,182 21Section 182. 701.1123 (1) of the statutes is created to read:
SB384,129,2222 701.1123 (1) In this section:
SB384,130,223 (a) "Marital deduction trust" means a trust for which an election to qualify for
24a marital deduction under section 2056 (b) (7), 2056A (a) (3), or 2523 (f) of the Internal

1Revenue Code has been made or a trust that qualified for the marital deduction
2under other provisions of section 2056 or 2523 of the Internal Revenue Code.
SB384,130,43 (b) "Payment" means an amount of money or property received by a trustee that
4is any of the following:
SB384,130,85 1. Part of a series, or eligible to be part of a series, of distributions payable over
6a fixed number of years or during the life of one or more individuals because of
7services rendered or property transferred to the payer in exchange for the future
8distributions.
SB384,130,99 2. Distributed from a plan, regardless of the reason for the distribution.
SB384,130,1410 (c) "Plan" means a contractual, custodial, trust, or other arrangement that
11provides for distributions to a trust. "Plan" includes a private or commercial annuity,
12an individual retirement account, a Roth individual retirement account, a qualified
13retirement plan such as a pension, profit-sharing, stock-bonus, or stock-ownership
14plan, or any nonqualified deferred compensation plan.
SB384,130,1815 (e) "Separate account" means an account established or maintained under a
16plan under which income, gains, and losses, whether or not realized, from assets
17allocated to the account, are credited to or charged against the account without
18regard to other income, gains, or losses of the plan.
SB384,183 19Section 183. 701.1123 (4) of the statutes is created to read:
SB384,131,220 701.1123 (4) (a) Notwithstanding sub. (3), a trustee of a marital deduction trust
21shall determine plan income for an accounting period as if the plan were a trust
22subject to this subchapter. If the trustee of a marital deduction trust cannot
23determine the plan income, the plan income is 4 percent of the total present value
24of the trust's income in the plan on the first day of the accounting period, based on

1reasonable actuarial assumptions as determined by the trustee of the marital
2deduction trust.
SB384,131,93 (b) Notwithstanding subs. (2) and (3), a trustee of a marital deduction trust
4shall allocate a payment from a plan to income to the extent of the plan income and
5distribute that amount to the surviving spouse. The trustee of the marital deduction
6trust shall allocate the balance of the payment to principal. Upon the request of the
7surviving spouse, the trustee of a marital deduction trust shall allocate principal to
8income to the extent the plan income exceeds payments made from the plan to the
9trust during the accounting period.
SB384,131,1210 (c) Upon the request of the surviving spouse of the settlor, a trustee of a marital
11deduction trust shall demand that a person administering a plan distribute the plan
12income to the trust.
SB384,184 13Section 184. 701.1126 (title) of the statutes is created to read:
SB384,131,14 14701.1126 (title) Timber.
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