AB490,87,4
4(2) The court may remove a trustee if any of the following applies:
AB490,87,55
(a) The trustee has committed a material breach of trust.
AB490,87,76
(b) A lack of cooperation among cotrustees substantially impairs the
7administration of the trust.
AB490,87,108
(c) The court determines that removal of the trustee best serves the interests
9of the beneficiaries because of unfitness, unwillingness, or persistent failure of the
10trustee to administer the trust effectively.
AB490,87,1511
(d) There has been a substantial change of circumstances or removal is
12requested by all of the qualified beneficiaries, the court finds that removal of the
13trustee best serves the interests of all of the beneficiaries and is not inconsistent with
14a material purpose of the trust, and a suitable cotrustee or successor trustee is
15available.
AB490,87,19
16(3) Pending a final decision on a request to remove a trustee, or in lieu of or in
17addition to removing a trustee, the court may order such appropriate relief under s.
18701.1001 (2) as may be necessary to protect the trust property or the interests of the
19beneficiaries.
AB490,128
20Section
128. 701.0707 of the statutes is created to read:
AB490,87,25
21701.0707 Delivery of property by former trustee. (1) Unless a cotrustee
22remains in office or the court otherwise orders, and until the trust property is
23delivered to a successor trustee or other person entitled to it, a trustee who has
24resigned or been removed has the duties of a trustee and the powers necessary to
25protect the trust property.
AB490,88,3
1(2) A trustee who has resigned or been removed shall proceed expeditiously to
2deliver the trust property within the trustee's possession to the cotrustee, successor
3trustee, or other person entitled to it.
AB490,129
4Section
129. 701.0708 of the statutes is created to read:
AB490,88,7
5701.0708 Compensation of trustee. (1) If the terms of a trust do not specify
6the trustee's compensation, a trustee is entitled to compensation that is reasonable
7under the circumstances.
AB490,88,11
8(2) If the terms of a trust specify the trustee's compensation or refer to another
9ascertainable source for determining that compensation, the trustee is entitled to be
10compensated as specified, but the court may allow more or less compensation if any
11of the following applies:
AB490,88,1312
(a) The duties of the trustee are substantially different from those
13contemplated when the trust was created.
AB490,88,1514
(b) The compensation specified by the terms of the trust would be unreasonably
15low or high.
AB490,88,18
16(3) If the trustee has rendered other services in connection with the
17administration of the trust, the trustee may receive reasonable compensation for the
18other services rendered, in addition to reasonable compensation as trustee.
AB490,130
19Section
130. 701.0709 of the statutes is created to read:
AB490,88,22
20701.0709 Reimbursement of expenses.
(1) A trustee is entitled to be
21reimbursed out of the trust property, with interest as appropriate, for all of the
22following:
AB490,88,2323
(a) Expenses that were properly incurred in the administration of the trust.
AB490,88,2524
(b) To the extent necessary to prevent unjust enrichment of the trust, expenses
25that were not properly incurred in the administration of the trust.
AB490,89,2
1(2) An advance by the trustee of money for the protection of the trust gives rise
2to a lien against trust property to secure reimbursement with reasonable interest.
AB490,131
3Section
131. 701.0710 of the statutes is created to read:
AB490,89,8
4701.0710 Title of trust property. A settlor or transferor may effectively
5transfer property to a trust by placing legal title of the property in the name of the
6trustee, which shall include any successor trustee regardless of whether a successor
7trustee is referenced in the transfer document. A transfer that places legal title in
8the name of the trust itself places legal title in the name of the trustee.
AB490,132
9Section
132. 701.08 of the statutes is renumbered 701.0419 and amended to
10read:
AB490,89,17
11701.0419 Transfers to living trusts. (1) Validity and effect. The order of
12execution of a
living trust instrument and a will or other instrument purporting to
13transfer or appoint property to the trust evidenced by the trust instrument shall be
14disregarded in determining the validity of the transfer or appointment. No reference
15in any will to a
living trust shall cause assets in such trust to be included in property
16administered as part of the testator's estate
; nor shall it cause the trust or any
17portion thereof to be treated as a testamentary trust.
AB490,90,9
18(2) Governing terms. Property transferred or appointed by a will or by a
19beneficiary designation under an employee benefit plan, life insurance policy
, or
20other instrument permitting designation of a beneficiary to a
living trust,
the terms
21of which the testator or designator was the sole holder of a power to modify, shall be
22administered in accordance with the terms of the trust as
they the terms of the trust 23may have been modified prior to the testator's or designator's death, even though the
24will
or, beneficiary designation
, or other instrument was not reexecuted or
25republished after exercise of the power to modify, unless the will
or, beneficiary
1designation
, or other instrument expressly provides otherwise.
Such property
2transferred or appointed to a living trust, which is subject to a power of modification
3requiring action or consent of a person other than the testator or designator, shall be
4administered in accordance with the terms of the trust instrument as they exist at
5the execution of the will or beneficiary designation, unless expressly otherwise
6provided. If the will or beneficiary designation expressly provides that the property
7shall be administered in accordance with the terms of the trust instrument as they
8may be modified thereafter, the will or beneficiary designation need not be
9reexecuted or republished after exercise of the power to modify.
AB490,90,13
10(3) Disposition when no existing living trust. If at the death of a testator a
11living trust has been completely revoked, or otherwise terminated, a provision in the
12testator's will purporting to transfer or appoint property to
such the trust shall have
13the following effect, unless the will provides otherwise:
AB490,90,1514
(a) If the testator was a necessary party to the revocation or other termination
15of
such the trust, the provision in the testator's will shall be invalid
;.
AB490,90,1916
(b) If the testator was not a necessary party to the revocation or other
17termination of such trust, the provision in the testator's will shall be deemed to
18create a
testamentary trust upon the terms of the
living trust instrument at the time
19the will was executed or as otherwise provided where sub. (2) is applicable.
AB490,133
20Section
133. Subchapter VIII (title) of chapter 701 [precedes 701.0801] of the
21statutes is created to read:
AB490,90,2222
chapter 701
AB490,91,223
subchapter VIII
24
duties and powers of trustees,
1directing parties, and
2
trust protectors
AB490,134
3Section
134. 701.0801 of the statutes is created to read:
AB490,91,6
4701.0801 Duty to administer trust. Upon acceptance of a trusteeship, the
5trustee shall administer the trust in good faith, in accordance with its terms and
6purposes and the interests of the beneficiaries, and in accordance with this chapter.
AB490,135
7Section
135. 701.0802 of the statutes is created to read:
AB490,91,9
8701.0802 Duty of loyalty. (1) A trustee shall administer the trust solely in
9the interests of the beneficiaries.
AB490,91,15
10(2) Subject to the rights of persons dealing with or assisting the trustee as
11provided in s. 701.1012, a sale, encumbrance, or other transaction that involves the
12investment or management of trust property and is entered into by the trustee for
13the trustee's own personal account or that is otherwise affected by a conflict between
14the trustee's fiduciary and personal interests is voidable by a beneficiary affected by
15the transaction unless any of the following applies:
AB490,91,1616
(a) The transaction was authorized by the terms of the trust.
AB490,91,1717
(b) The transaction was approved by the court.
AB490,91,1918
(c) The beneficiary did not commence a judicial proceeding within the time
19allowed by s. 701.1005.
AB490,91,2120
(d) The beneficiary consented to the trustee's conduct, ratified the transaction,
21or released the trustee in compliance with s. 701.1009.
AB490,91,2322
(e) The transaction involves a contract entered into or claim acquired by the
23trustee before the person became trustee.
AB490,92,2
24(3) A sale, encumbrance, or other transaction involving the investment or
25management of trust property is presumed to be affected by a conflict between
1personal and fiduciary interests if it is entered into by the trustee with any of the
2following:
AB490,92,33
(a) The trustee's spouse.
AB490,92,44
(b) The trustee's descendants, siblings, parents, or their spouses.
AB490,92,55
(c) An agent or attorney of the trustee.
AB490,92,86
(d) A corporation or other person or enterprise in which the trustee, or a person
7that owns a significant interest in the trustee, has an interest that might affect the
8trustee's best judgment.
AB490,92,11
9(4) A transaction not concerning trust property in which the trustee engages
10in the trustee's individual capacity involves a conflict between personal and fiduciary
11interests if the transaction concerns an opportunity properly belonging to the trust.
AB490,92,22
12(5) An investment by a trustee in securities of an investment company or
13investment trust to which the trustee, or its affiliate, provides services in a capacity
14other than as trustee is not presumed to be affected by a conflict between personal
15and fiduciary interests if the investment otherwise complies with the prudent
16investor rule in s. 881.01. In addition to receiving compensation for acting as trustee,
17the trustee may be compensated by the investment company or investment trust for
18providing those services out of fees charged to the trust. If the trustee receives
19compensation from the investment company or investment trust for providing
20investment advisory or investment management services, the trustee shall at least
21annually notify the persons entitled to receive a copy of the trustee's report under s.
22701.0813 (3) of the rate and method by which that compensation was determined.
AB490,93,2
23(6) In voting shares of stock or in exercising powers of control over similar
24interests in other forms of enterprise, the trustee shall act in the best interests of the
25beneficiaries. If the trust is the sole owner of a corporation or other form of
1enterprise, the trustee shall elect or appoint directors or other managers who will
2manage the corporation or enterprise in the best interests of the beneficiaries.
AB490,93,4
3(7) This section does not preclude the following transactions, if fair to the
4beneficiaries:
AB490,93,65
(a) An agreement between a trustee and a beneficiary relating to the
6appointment or compensation of the trustee.
AB490,93,77
(b) Payment of reasonable compensation to the trustee.
AB490,93,108
(c) A transaction between a trust and another trust, a decedent's estate, a
9guardianship of the estate, a conservatorship, or a custodianship of which the trustee
10is a fiduciary or in which a beneficiary has an interest.
AB490,93,1211
(d) A deposit of trust money in a regulated financial-service institution
12operated by the trustee.
AB490,93,1313
(e) An advance by the trustee of money for the protection of the trust.
AB490,93,16
14(8) The court may appoint a trustee, trust protector, or directing party to make
15a decision with respect to any proposed transaction that might violate this section
16if entered into by the trustee.
AB490,136
17Section
136. 701.0803 of the statutes is created to read:
AB490,93,21
18701.0803 Impartiality. If a trust has 2 or more beneficiaries, the trustee shall
19act impartially in investing, managing, and distributing the trust property, giving
20due regard to the beneficiaries' respective interests and the purposes and terms of
21the trust.
AB490,137
22Section
137. 701.0804 of the statutes is created to read:
AB490,94,2
23701.0804 Prudent administration. A trustee shall administer the trust as
24a prudent person would, by considering the purposes, terms, distributional
1requirements, and other circumstances of the trust. In satisfying this standard, the
2trustee shall exercise reasonable care, skill, and caution.
AB490,138
3Section
138. 701.0805 of the statutes is created to read:
AB490,94,6
4701.0805 Costs of administration. In administering a trust, the trustee may
5incur only costs that are reasonable in relation to the trust property, the purposes of
6the trust, the skills of the trustee, and the complexity of the trust administration.
AB490,139
7Section
139. 701.0806 of the statutes is created to read:
AB490,94,10
8701.0806 Trustee's skills. A trustee who has special skills or expertise, or is
9named trustee in reliance upon the trustee's representation that the trustee has
10special skills or expertise, shall use those special skills or expertise.
AB490,140
11Section
140. 701.0807 of the statutes is created to read:
AB490,94,15
12701.0807 Delegation by trustee. (1) A trustee may delegate duties and
13powers that a prudent trustee of comparable skills could properly delegate under the
14circumstances. The trustee shall exercise reasonable care, skill, and caution in each
15of the following:
AB490,94,1616
(a) Selecting an agent.
AB490,94,1817
(b) Establishing the scope and terms of the delegation, consistent with the
18purposes and terms of the trust.
AB490,94,2019
(c) Periodically reviewing the agent's actions in order to monitor the agent's
20performance and compliance with the terms of the delegation.
AB490,94,22
21(2) In performing a delegated function, an agent owes a duty to the trust to
22exercise reasonable care to comply with the terms of the delegation.
AB490,94,24
23(3) A trustee who complies with sub. (1) is not liable to the beneficiaries or to
24the trust for an action of the agent to whom the function was delegated.
AB490,95,4
1(4) By accepting a delegation of powers or duties from the trustee of a trust that
2is subject to the law of this state, an agent submits to the jurisdiction of the courts
3of this state even if the terms of the delegation provide for a different jurisdiction or
4venue.
AB490,95,7
5(5) This section does not apply to a trustee's delegation of investment and
6management functions. A trustee's delegation of investment and management
7functions is governed by s. 881.01 (10).
AB490,141
8Section
141. 701.0808 of the statutes is created to read:
AB490,95,11
9701.0808 Powers to direct; directing parties. (1) While a trust is
10revocable, the trustee may follow a direction of the settlor that is contrary to the
11terms of the trust.
AB490,95,20
12(2) A settlor in a trust instrument, a court in a trust instrument or court order,
13or interested persons in a nonjudicial settlement agreement may appoint a directing
14party to direct the trustee on investment or distribution decisions or to make
15investment or distribution decisions regarding directed trust property. If a trustee
16acts in accordance with the direction of a directing party or fails to act due to lack of
17direction from a directing party, the trustee is not liable for any loss resulting directly
18or indirectly from any action taken or omitted with respect to the direction or lack
19of direction except for acts or omissions that are a result of the trustee's willful
20misconduct.
AB490,95,21
21(3) A trustee does not have a duty to do any of the following:
AB490,95,2322
(a) Provide advice to, consult with, monitor, or evaluate a directing party's
23conduct.
AB490,95,2524
(b) Inform or warn a beneficiary, a 3rd party, or a directing party that the
25trustee disagrees with any of the directing party's actions or directions.
AB490,96,1
1(c) Prevent a directing party from giving a direction or taking any action.
AB490,96,32
(d) Compel a directing party to redress the directing party's actions or
3directions.
AB490,96,8
4(4) The administrative actions of a trustee related to matters within the scope
5of a directing party's power, including confirming that the directing party's directions
6have been carried out and recording and reporting actions taken pursuant to the
7directing party's direction, do not constitute either monitoring the directing party's
8actions or participating in the actions of the directing party.
AB490,96,12
9(5) A directing party is a fiduciary and is required to act in good faith with
10regard to the terms of the trust and the interests of the beneficiaries. A directing
11party is liable for any loss that results from a breach of any of the directing party's
12fiduciary duties.
AB490,96,21
13(6) (a) A directing party may request information about the trust from the
14trustee and, if the requested information is related to a power granted to the
15directing party, the trustee shall provide the requested information to the directing
16party. If a trustee is bound by any confidentiality restrictions with respect to
17information requested by a directing party, the trustee may require that the
18directing party agree to be bound by the confidentiality restrictions before delivering
19such information to the directing party. A trustee is not liable to any beneficiary for
20any loss or damages resulting from the trustee providing information to the directing
21party that is related to the power granted to the directing party.
AB490,96,2422
(b) Except as otherwise provided in this chapter, a trustee does not have a duty
23to provide any information to the directing party that the directing party does not
24request.
AB490,97,3
1(7) Payment or reimbursement of attorney fees and costs. A trustee shall,
2in accordance with s. 701.1004, pay or reimburse a directing party for attorney fees
3and costs to defend any claim made against the directing party.
AB490,97,5
4(8) Sections 701.0701, 701.0708, 701.0709, 701.1001 to 701.1003, and 701.1005
5to 701.1010 apply to a directing party as if the directing party was a trustee.
AB490,97,7
6(9) A person who accepts an appointment as a directing party of a trust submits
7to the jurisdiction of the courts of this state, as provided in s. 701.0202 (1).
AB490,142
8Section
142. 701.0809 of the statutes is created to read: