AB490,75,33
(a) The discretion is expressed in the form of a standard of distribution.
AB490,75,54
(b) The terms of the trust authorizing a distribution couple language of
5discretion with language of direction.
AB490,75,10
6(2) Whether or not a trust contains a spendthrift provision, a creditor or
7assignee of a beneficiary may reach a mandatory distribution of income or principal,
8including a distribution upon termination of the trust, if the trustee has not made
9the distribution to the beneficiary within a reasonable time after the designated
10distribution date.
AB490,101
11Section
101. 701.0507 of the statutes is created to read:
AB490,75,14
12701.0507 Personal obligations of trustee. Trust property is not subject to
13personal obligations of the trustee, even if the trustee becomes insolvent or
14bankrupt.
AB490,102
15Section
102. 701.06 (title), (1), (2), (3) and (6) (title) and (a) of the statutes are
16repealed.
AB490,103
17Section
103. 701.06 (4) of the statutes is renumbered 701.0503 (1), and
18701.0503 (1) (intro.) and (b), as renumbered, is amended to read:
AB490,75,2219
701.0503
(1) Claims for child support. (intro.) Notwithstanding
any provision
20in the creating instrument or subs. (1) and (2) s. 701.0502, upon application of a
21person having a valid order directing a beneficiary to make payment for support of
22the beneficiary's child, the court may
do any of the following:
AB490,76,223
(b)
In If the case of a beneficiary
under a discretionary may receive income or
24principal at the trustee's discretion under the trust, order the trustee to satisfy part
25or all of the claim out of part or all of future payments of income or principal
which
1that are
to be made pursuant to the exercise of the trustee's discretion in favor of such
2beneficiary.
AB490,104
3Section
104. 701.06 (5) (intro.) and (a) of the statutes are renumbered
4701.0503 (2) (intro.) and (a) and amended to read:
AB490,76,125
701.0503
(2) Claims for public support. (intro.) Notwithstanding
any
6provision in the creating instrument or subs. (1) and (2) s. 701.0502 and except as
7provided in sub. (3), if the settlor is legally obligated to pay for the public support of
8a beneficiary under s. 46.10, 49.345, or 301.12 or the beneficiary is legally obligated
9to pay for the beneficiary's public support or
that
for support furnished
to the
10beneficiary's spouse or minor child under s. 46.10, 49.345, or 301.12, upon
11application by the appropriate state department or county official, the court may
do
12any of the following:
AB490,76,1513
(a) If
such the beneficiary is entitled to receive income or principal under the
14trust, order the trustee to satisfy part or all of the liability out of part or all of
15payments of income or principal as they are due, presently or in the future;
AB490,105
16Section
105. 701.06 (5) (b) of the statutes is renumbered 701.0503 (2) (b) 1. and
17amended to read:
AB490,76,2318
701.0503
(2) (b) 1. Except as
otherwise provided in
par. (c), in the case of a
19beneficiary under a discretionary trust subd. 2., if the beneficiary may receive income
20or principal at the trustee's discretion under the trust, order the trustee to satisfy
21part or all of the liability out of part or all of future payments of income or principal
22which are to be made pursuant to the exercise of the trustee's discretion in favor of
23such the beneficiary
;
.
AB490,106
24Section
106. 701.06 (5) (c) of the statutes is renumbered 701.0503 (2) (b) 2. and
25amended to read:
AB490,77,5
1701.0503
(2) (b) 2. In the case of a beneficiary
under a discretionary trust who
2may receive income or principal of the trust at the trustee's discretion and who is a
3settlor or a spouse or minor child of the settlor, order the trustee to satisfy part or all
4of the liability without regard to whether the trustee has then exercised or may
5thereafter exercise the trustee's discretion in favor of the beneficiary.
AB490,107
6Section
107. 701.06 (5m) of the statutes is renumbered 701.0503 (3) and
7amended to read:
AB490,77,168
701.0503
(3) Trust for disabled an individual with a disability. Subsection
9(5) (2) does not apply to any trust
that is established for
the benefit of an individual
10who has with a disability
which has continued or can be expected to continue
11indefinitely, substantially impairs the individual from adequately providing for his
12or her own care or custody, and constitutes a substantial handicap to the afflicted
13individual if the trust does not result in ineligibility for public assistance under ch.
1449. A trustee of a trust which is exempt from claims for public support under this
15subsection shall notify the county department under s. 46.215 or 46.22 in the county
16where the disabled beneficiary resides of the existence of the trust.
AB490,108
17Section
108. 701.06 (6) (b) of the statutes is renumbered 701.0505 (2) (b), and
18701.0505 (2) (b) 2., as renumbered, is amended to read:
AB490,77,2119
701.0505
(2) (b) 2. The beneficiary's right to withdraw part of the trust
20property, to the extent that the value of the property affected by the lapse, waiver,
21or release in any year does not exceed the greater of the
amount in following:
AB490,77,2322
a.
Section The amount referenced in section 2041 (b) (2) or 2514 (e)
, of the 23Internal Revenue Code
of 1986.
AB490,78,224
b.
Section The amount referenced in section 2503 (b)
, of the Internal Revenue
25Code
of 1986 for each individual other than the beneficiary who makes a transfer to
1the trust or who is deemed to make a transfer to the trust pursuant to an election to
2split gifts under section 2513 (a) of the Internal Revenue Code.
AB490,109
3Section
109. 701.06 (6) (c) of the statutes is renumbered 701.0505 (2) (c), and
4701.0505 (2) (c) (intro.), 1. a. and b. and 4., as renumbered, are amended to read:
AB490,78,95
701.0505
(2) (c) (intro.) A beneficiary of a trust is not a settlor, has not made a
6voluntary or involuntary transfer of the beneficiary's interest in the trust,
or and 7does not have the power to make a voluntary or involuntary transfer of the
8beneficiary's interest in the trust solely because the beneficiary holds
or, exercises,
9or allows in any capacity, any of the following:
AB490,78,1110
1. a. Exercisable only
on with the consent of another person holding an interest
11adverse to the beneficiary's interest.
AB490,78,1312
b. Limited by an ascertainable standard
, such as health, education, support,
13or maintenance of the beneficiary.
AB490,78,1414
4. A presently exercisable right described in
par. (b) 2. sub. (2) (b).
AB490,110
15Section
110. 701.06 (6) (d) of the statutes is renumbered 701.0505 (2) (d).
AB490,111
16Section
111. 701.06 (7) of the statutes is renumbered 701.0503 (4) and
17amended to read:
AB490,78,2018
701.0503
(4) Subsequent modification of court's order. Any order entered by
19a court under sub.
(4), (5) (1) or
(6) (a) is subject to modification (2) may be modified 20upon application of an interested person.
AB490,112
21Section
112. 701.06 (8) of the statutes is renumbered 701.0503 (5) and
22amended to read:
AB490,78,2523
701.0503
(5) Exempt assets. Assets of a trust
, to the extent they that are
24exempt from claims of creditors under other statutes
, shall are not
be subject to sub.
25(4), (5), (1) or
(6) (a) (2).
AB490,113
1Section
113. Subchapter VI (title) of chapter 701 [precedes 701.0601] of the
2statutes is created to read:
AB490,79,44
subchapter VI
AB490,79,55
Revocable trusts
AB490,114
6Section
114. 701.0601 of the statutes is created to read:
AB490,79,9
7701.0601 Capacity of settlor of revocable trust. The capacity required to
8create, amend, revoke, or add property to a revocable trust, or to direct the actions
9of the trustee of a revocable trust, is the same as that required to make a will.
AB490,115
10Section
115. 701.0602 of the statutes is created to read:
AB490,79,15
11701.0602 Revocation or amendment of revocable trust. (1) Unless the
12terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke
13or amend the trust. This subsection does not apply to a trust created under an
14instrument executed before the effective date of this subsection .... [LRB inserts
15date].
AB490,79,17
16(2) If a revocable trust is created or funded by more than one settlor, all of the
17following apply:
AB490,79,2018
(a) To the extent the trust consists of marital or community property, the trust
19may be revoked by either spouse acting alone but may be amended only by joint
20action of both spouses.
AB490,79,2321
(b) To the extent the trust consists of property other than marital or community
22property, each settlor may revoke or amend the trust with regard to the portion of
23the trust property attributable to that settlor's contribution.
AB490,80,3
1(c) Upon the revocation or amendment of the trust by fewer than all of the
2settlors, the trustee shall promptly notify the other settlors of the revocation or
3amendment.
AB490,80,5
4(3) A settlor may revoke or amend a revocable trust by any of the following
5means:
AB490,80,66
(a) By substantial compliance with a method provided in the terms of the trust.
AB490,80,87
(b) If the terms of the trust do not provide a method, by any of the following
8means:
AB490,80,109
1. A later will or codicil that expressly refers to the trust or specifically devises
10property that would otherwise have passed according to the terms of the trust.
AB490,80,1211
2. Any other method manifesting clear and convincing evidence of the settlor's
12intent.
AB490,80,16
13(4) Upon revocation of a revocable trust, the trustee shall transfer the trust
14property as the settlor directs. However, with respect to marital or community
15property, the trustee shall transfer the property to both spouses as marital or
16community property.
AB490,80,19
17(5) A settlor's powers with respect to revocation, amendment, or distribution
18of trust property may be exercised by an agent under a power of attorney only to the
19extent expressly authorized by the terms of the power of attorney.
AB490,80,23
20(6) A guardian of the estate or a conservator of the settlor may exercise a
21settlor's powers with respect to revocation, amendment, or distribution of trust
22property only with the approval of the court supervising the guardianship or
23conservatorship.
AB490,81,2
24(7) A trustee who does not know that a trust has been revoked or amended is
25not liable for distributions made and other actions taken on the assumption that the
1trust had not been amended or revoked, or for distributions made pursuant to sub.
2(5).
AB490,116
3Section
116. 701.0603 of the statutes is created to read:
AB490,81,7
4701.0603 Settlor's powers; powers of withdrawal. (1) While a trust is
5revocable, the rights of the beneficiaries are subject to the control of, and the duties
6of the trustee, a directing party, and a trust protector are owed exclusively to, the
7settlor.
AB490,81,9
8(2) If a revocable trust has more than one settlor, the duties of the trustee, a
9directing party, and a trust protector are owed to all of the settlors.
AB490,81,12
10(3) During the period in which a power of withdrawal may be exercised, the
11holder of the power has the rights of a settlor of a revocable trust under this section
12to the extent of the property subject to the power.
AB490,117
13Section
117. 701.0604 of the statutes is created to read:
AB490,81,17
14701.0604 Limitation on action contesting validity of revocable trust;
15distribution of trust property. (1) A person must commence a judicial proceeding
16to contest the validity of a trust that was revocable immediately before the settlor's
17death within the earlier of the following:
AB490,81,1818
(a) One year after the settlor's death.
AB490,81,2319
(b) Four months after the trustee sent the person a copy of the trust instrument
20and a notice informing the person of the trust's existence, of the trustee's name and
21address, and of the time allowed for commencing a proceeding. Except as provided
22in s. 701.0813 (2), a trustee is not liable to any person for not providing the
23information described in this paragraph.
AB490,82,2
24(2) Upon the death of the settlor of a trust that was revocable immediately
25before the settlor's death, the trustee may proceed to distribute the trust property
1in accordance with the terms of the trust. The trustee is not subject to liability for
2doing so unless one of the following applies:
AB490,82,43
(a) The trustee knows of a pending judicial proceeding contesting the validity
4of the trust.
AB490,82,75
(b) A potential contestant has notified the trustee of a possible judicial
6proceeding to contest the trust and a judicial proceeding is commenced within 60
7days after the contestant sent the notification.
AB490,82,9
8(3) A beneficiary of a trust that is determined to have been invalid is liable to
9return any distribution received.
AB490,118
10Section
118. 701.065 (title), (1), (2), (3) and (4) of the statutes are renumbered
11701.0508 (title), (1), (2), (3) and (4), and 701.0508 (1) (a) 2., as renumbered, is
12amended to read:
AB490,82,1813
701.0508
(1) (a) 2. Except as provided in pars. (b) and (c), if the trustee satisfies
14the requirements for the publication of the notice under subd. 1., all claims, including
15claims of
the any state and any
subdivision thereof of its subdivisions, whether due
16or to become due, absolute or contingent, liquidated or unliquidated, are barred
17against the trustee, the trust property and any recipient of trust property unless filed
18with the trustee on or before the date specified in the notice under subd. 1.
AB490,120
21Section
120. 701.07 of the statutes is repealed.
AB490,121
22Section
121. Subchapter VII (title) of chapter 701 [precedes 701.0701] of the
23statutes is created to read:
AB490,82,2424
chapter 701
AB490,82,2525
subchapter VII
AB490,83,1
1office of trustee
AB490,122
2Section
122. 701.0701 of the statutes is created to read:
AB490,83,5
3701.0701 Accepting or declining trusteeship. (1) Except as provided in
4sub. (3), a person designated as trustee accepts the trusteeship by doing any of the
5following:
AB490,83,76
(a) Substantially complying with a method of acceptance provided in the terms
7of the trust.
AB490,83,118
(b) If the terms of the trust do not provide a method or the method provided in
9the terms is not expressly made exclusive, by accepting delivery of the trust property,
10exercising powers or performing duties as trustee, or otherwise indicating
11acceptance of the trusteeship.
AB490,83,15
12(2) A person designated as trustee who has not yet accepted the trusteeship
13may decline the trusteeship. A designated trustee who does not accept the
14trusteeship within a reasonable time after knowing of the designation is considered
15to have rejected the trusteeship.
AB490,83,17
16(3) A person designated as trustee, without accepting the trusteeship, may do
17any of the following:
AB490,83,2118
(a) Act to preserve the trust property if, within a reasonable time after acting,
19the person sends a declination of the trusteeship in writing to the settlor or, if the
20settlor is dead or incapacitated, to the designated cotrustee, or, if none, to the
21successor trustee, or, if none, to a distributee or a permissible distributee of the trust.
AB490,83,2322
(b) Inspect or investigate trust property to determine potential liability under
23environmental or other law or for any other purpose.
AB490,123
24Section
123. 701.0702 of the statutes is created to read:
AB490,84,4
1701.0702 Trustee's bond. (1) A trustee shall give bond to secure performance
2of the trustee's duties only if the court finds that a bond is needed to protect the
3interests of the beneficiaries or is required by the terms of the trust and the court has
4not dispensed with the requirement.
AB490,84,6
5(2) The court may specify the amount of a bond, its liabilities, and whether
6sureties are necessary. The court may modify or terminate a bond at any time.
AB490,84,10
7(3) A court may not require a bond from a trust company bank, state bank, or
8national bank that is authorized to exercise trust powers and that has complied with
9s. 220.09 or 223.02 nor shall a bond be required of a religious, charitable, or
10educational corporation or society.
AB490,124
11Section
124. 701.0703 of the statutes is created to read:
AB490,84,12
12701.0703 Cotrustees. (1) Cotrustees may act only by majority decision.
AB490,84,14
13(2) If a vacancy occurs in a cotrusteeship, as provided under s. 701.0704, a
14majority of the remaining cotrustees may act for the trust.
AB490,84,19
15(3) A cotrustee shall participate in the performance of a trustee's function
16unless the cotrustee is unavailable to perform the function because of absence,
17illness, disqualification under other law, or the cotrustee is otherwise temporarily
18incapacitated or the cotrustee has properly delegated the performance of the
19function to another trustee.