701.06 (5) (intro.) and (a) of the statutes are renumbered 701.0503 (2) (intro.) and (a) and amended to read:
701.0503 (2) Claims for public support. (intro.) Notwithstanding any provision in the creating instrument or subs. (1) and (2) s. 701.0502 and except as provided in sub. (3), if the settlor is legally obligated to pay for the public support of a beneficiary under s. 46.10, 49.345, or 301.12 or the beneficiary is legally obligated to pay for the beneficiary's public support or that for support furnished to the beneficiary's spouse or minor child under s. 46.10, 49.345, or 301.12, upon application by the appropriate state department or county official, the court may do any of the following:
(a) If such the beneficiary is entitled to receive income or principal under the trust, order the trustee to satisfy part or all of the liability out of part or all of payments of income or principal as they are due, presently or in the future;
701.06 (5) (b) of the statutes is renumbered 701.0503 (2) (b) 1. and amended to read:
701.0503 (2) (b) 1. Except as otherwise provided in par. (c), in the case of a beneficiary under a discretionary trust subd. 2., if the beneficiary may receive income or principal at the trustee's discretion under the trust, order the trustee to satisfy part or all of the liability out of part or all of future payments of income or principal which are to be made pursuant to the exercise of the trustee's discretion in favor of such the beneficiary
701.06 (5) (c) of the statutes is renumbered 701.0503 (2) (b) 2. and amended to read:
701.0503 (2) (b) 2. In the case of a beneficiary under a discretionary trust who may receive income or principal of the trust at the trustee's discretion and who is a settlor or a spouse or minor child of the settlor, order the trustee to satisfy part or all of the liability without regard to whether the trustee has then exercised or may thereafter exercise the trustee's discretion in favor of the beneficiary.
701.06 (5m) of the statutes is renumbered 701.0503 (3) and amended to read:
701.0503 (3) Trust for disabled an individual with a disability. Subsection (5) (2) does not apply to any trust that is established for the benefit of an individual who has with a disability which has continued or can be expected to continue indefinitely, substantially impairs the individual from adequately providing for his or her own care or custody, and constitutes a substantial handicap to the afflicted individual if the trust does not result in ineligibility for public assistance under ch. 49. A trustee of a trust which is exempt from claims for public support under this subsection shall notify the county department under s. 46.215 or 46.22 in the county where the disabled beneficiary resides of the existence of the trust.
701.06 (6) (b) of the statutes is renumbered 701.0505 (2) (b), and 701.0505 (2) (b) 2., as renumbered, is amended to read:
701.0505 (2) (b) 2. The beneficiary's right to withdraw part of the trust property, to the extent that the value of the property affected by the lapse, waiver, or release in any year does not exceed the greater of the amount in
a. Section The amount referenced in section 2041 (b) (2) or 2514 (e), of the Internal Revenue Code of 1986.
b. Section The amount referenced in section
2503 (b), of the
Internal Revenue Code
of 1986 for each individual other than the beneficiary who makes a transfer to the trust or who is deemed to make a transfer to the trust pursuant to an election to split gifts under section 2513 (a) of the Internal Revenue Code
701.06 (6) (c) of the statutes is renumbered 701.0505 (2) (c), and 701.0505 (2) (c) (intro.), 1. a. and b. and 4., as renumbered, are amended to read:
701.0505 (2) (c) (intro.) A beneficiary of a trust is not a settlor, has not made a voluntary or involuntary transfer of the beneficiary's interest in the trust, or and does not have the power to make a voluntary or involuntary transfer of the beneficiary's interest in the trust solely because the beneficiary holds or, exercises,
or allows in any capacity, any of the following:
1. a. Exercisable only on with the consent of another person holding an interest adverse to the beneficiary's interest.
b. Limited by an ascertainable standard, such as health, education, support, or maintenance of the beneficiary.
4. A presently exercisable right described in par. (b) 2. sub. (2) (b).
701.06 (6) (d) of the statutes is renumbered 701.0505 (2) (d).
701.06 (7) of the statutes is renumbered 701.0503 (4) and amended to read:
701.0503 (4) Subsequent modification of court's order. Any order entered by a court under sub. (4), (5) (1) or (6) (a) is subject to modification (2) may be modified upon application of an interested person.
701.06 (8) of the statutes is renumbered 701.0503 (5) and amended to read:
701.0503 (5) Exempt assets. Assets of a trust, to the extent they that are exempt from claims of creditors under other statutes, shall are not be subject to sub. (4), (5), (1) or (6) (a) (2).
Subchapter VI (title) of chapter 701 [precedes 701.0601] of the statutes is created to read:
701.0601 of the statutes is created to read:
701.0601 Capacity of settlor of revocable trust. The capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.
701.0602 of the statutes is created to read:
701.0602 Revocation or amendment of revocable trust. (1) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection does not apply to a trust created under an instrument executed before the effective date of this subsection .... [LRB inserts date].
(2) If a revocable trust is created or funded by more than one settlor, all of the following apply:
(a) To the extent the trust consists of marital or community property, the trust may be revoked by either spouse acting alone but may be amended only by joint action of both spouses.
(b) To the extent the trust consists of property other than marital or community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor's contribution.
(c) Upon the revocation or amendment of the trust by fewer than all of the settlors, the trustee shall promptly notify the other settlors of the revocation or amendment.
(3) A settlor may revoke or amend a revocable trust by any of the following means:
(a) By substantial compliance with a method provided in the terms of the trust.
(b) If the terms of the trust do not provide a method, by any of the following means:
1. A later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust.
2. Any other method manifesting clear and convincing evidence of the settlor's intent.
(4) Upon revocation of a revocable trust, the trustee shall transfer the trust property as the settlor directs. However, with respect to marital or community property, the trustee shall transfer the property to both spouses as marital or community property.
(5) A settlor's powers with respect to revocation, amendment, or distribution of trust property may be exercised by an agent under a power of attorney only to the extent expressly authorized by the terms of the power of attorney.
(6) A guardian of the estate or a conservator of the settlor may exercise a settlor's powers with respect to revocation, amendment, or distribution of trust property only with the approval of the court supervising the guardianship or conservatorship.
(7) A trustee who does not know that a trust has been revoked or amended is not liable for distributions made and other actions taken on the assumption that the trust had not been amended or revoked, or for distributions made pursuant to sub. (5).
701.0603 of the statutes is created to read:
701.0603 Settlor's powers; powers of withdrawal. (1) While a trust is revocable, the rights of the beneficiaries are subject to the control of, and the duties of the trustee, a directing party, and a trust protector are owed exclusively to, the settlor.
(2) If a revocable trust has more than one settlor, the duties of the trustee, a directing party, and a trust protector are owed to all of the settlors.
(3) During the period in which a power of withdrawal may be exercised, the holder of the power has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power.
701.0604 of the statutes is created to read:
701.0604 Limitation on action contesting validity of revocable trust; distribution of trust property. (1) A person must commence a judicial proceeding to contest the validity of a trust that was revocable immediately before the settlor's death within the earlier of the following:
(a) One year after the settlor's death.
(b) Four months after the trustee sent the person a copy of the trust instrument and a notice informing the person of the trust's existence, of the trustee's name and address, and of the time allowed for commencing a proceeding. Except as provided in s. 701.0813 (2), a trustee is not liable to any person for not providing the information described in this paragraph.
(2) Upon the death of the settlor of a trust that was revocable immediately before the settlor's death, the trustee may proceed to distribute the trust property in accordance with the terms of the trust. The trustee is not subject to liability for doing so unless one of the following applies:
(a) The trustee knows of a pending judicial proceeding contesting the validity of the trust.
(b) A potential contestant has notified the trustee of a possible judicial proceeding to contest the trust and a judicial proceeding is commenced within 60 days after the contestant sent the notification.
(3) A beneficiary of a trust that is determined to have been invalid is liable to return any distribution received.
701.065 (title), (1), (2), (3) and (4) of the statutes are renumbered 701.0508 (title), (1), (2), (3) and (4), and 701.0508 (1) (a) 2., as renumbered, is amended to read:
701.0508 (1) (a) 2. Except as provided in pars. (b) and (c), if the trustee satisfies the requirements for the publication of the notice under subd. 1., all claims, including claims of the any state and any
subdivision thereof of its subdivisions, whether due or to become due, absolute or contingent, liquidated or unliquidated, are barred against the trustee, the trust property and any recipient of trust property unless filed with the trustee on or before the date specified in the notice under subd. 1.
701.07 of the statutes is repealed.
Subchapter VII (title) of chapter 701 [precedes 701.0701] of the statutes is created to read:
office of trustee
701.0701 of the statutes is created to read:
701.0701 Accepting or declining trusteeship. (1) Except as provided in sub. (3), a person designated as trustee accepts the trusteeship by doing any of the following:
(a) Substantially complying with a method of acceptance provided in the terms of the trust.
(b) If the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.
(2) A person designated as trustee who has not yet accepted the trusteeship may decline the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is considered to have rejected the trusteeship.
(3) A person designated as trustee, without accepting the trusteeship, may do any of the following:
(a) Act to preserve the trust property if, within a reasonable time after acting, the person sends a declination of the trusteeship in writing to the settlor or, if the settlor is dead or incapacitated, to the designated cotrustee, or, if none, to the successor trustee, or, if none, to a distributee or a permissible distributee of the trust.
(b) Inspect or investigate trust property to determine potential liability under environmental or other law or for any other purpose.
701.0702 of the statutes is created to read:
701.0702 Trustee's bond. (1) A trustee shall give bond to secure performance of the trustee's duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the requirement.
(2) The court may specify the amount of a bond, its liabilities, and whether sureties are necessary. The court may modify or terminate a bond at any time.
(3) A court may not require a bond from a trust company bank, state bank, or national bank that is authorized to exercise trust powers and that has complied with s. 220.09 or 223.02 nor shall a bond be required of a religious, charitable, or educational corporation or society.
701.0703 of the statutes is created to read:
701.0703 Cotrustees. (1) Cotrustees may act only by majority decision.
(2) If a vacancy occurs in a cotrusteeship, as provided under s. 701.0704, a majority of the remaining cotrustees may act for the trust.
(3) A cotrustee shall participate in the performance of a trustee's function unless the cotrustee is unavailable to perform the function because of absence, illness, disqualification under other law, or the cotrustee is otherwise temporarily incapacitated or the cotrustee has properly delegated the performance of the function to another trustee.
(4) If a cotrustee is unavailable to perform duties because of absence, illness, disqualification under other law, or the cotrustee is otherwise temporarily incapacitated, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.
(5) A trustee may delegate to a cotrustee a function unless the delegation is expressly prohibited by the terms of the trust. Unless a delegation is irrevocable, a trustee may revoke a delegation previously made.
(6) Except as provided in sub. (7), a trustee who does not join in an action of another trustee is not liable for the action.
(7) Each trustee shall exercise reasonable care to do all of the following:
(a) Prevent a cotrustee from committing a material breach of trust.
(b) Compel a cotrustee to redress a material breach of trust.
(8) A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified all cotrustees of the dissent at or before the time of the action is not liable for the action unless the action is a material breach of trust.
701.0704 of the statutes is created to read:
701.0704 Vacancy in trusteeship; appointment of successor. (1) A vacancy in a trusteeship exists if any of the following occurs: