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(7) A trustee who does not know that a trust has been revoked or amended is not liable for distributions made and other actions taken on the assumption that the trust had not been amended or revoked, or for distributions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:
(a) A person designated as trustee declines the trusteeship.
(b) A person designated as trustee cannot be identified or does not exist.
(c) A trustee resigns.
(d) A trustee is disqualified or removed.
(e) A trustee dies.
(f) A guardian or conservator is appointed for an individual serving as trustee.
(2) If one or more cotrustees remain in office, a vacancy in a trusteeship does not need to be filled. A vacancy in a trusteeship shall be filled if the trust has no remaining trustee.
(3) A vacancy in a trusteeship that is required to be filled shall be filled in the following order of priority:
(a) By a person designated in the terms of the trust to act as successor trustee.
(b) By a person appointed by unanimous agreement of the qualified beneficiaries, except that, if the trust is a trust for an individual with a disability, the person appointed under this paragraph may not be the individual with a disability, his or her spouse, or a relative of the individual with a disability who is legally responsible for his or her support.
(c) By a person appointed by the court.
(4) Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee, directing party, or trust protector whenever the court considers the appointment necessary for the administration of the trust.
701.0705 of the statutes is created to read:
701.0705 Resignation of trustee. (1) A trustee may resign in any of the following manners:
(a) Upon at least 30 days' notice to the qualified beneficiaries, the settlor, if living, each cotrustee, each trust protector, and each directing party.
(b) With the approval of the court.
(2) In approving a resignation, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.
(3) Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or omissions of the trustee is not discharged or affected by the trustee's resignation.
701.0706 of the statutes is created to read:
701.0706 Removal of trustee. (1) The settlor, a cotrustee, or a qualified beneficiary may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative.
(2) The court may remove a trustee if any of the following applies:
(a) The trustee has committed a material breach of trust.
(b) A lack of cooperation among cotrustees substantially impairs the administration of the trust.
(c) The court determines that removal of the trustee best serves the interests of the beneficiaries because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively.
(d) There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.
(3) Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order such appropriate relief under s. 701.1001 (2) as may be necessary to protect the trust property or the interests of the beneficiaries.
701.0707 of the statutes is created to read:
701.0707 Delivery of property by former trustee. (1) Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.
(2) A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee, or other person entitled to it.
701.0708 of the statutes is created to read: