AB490: Bill Text

AB490,35 Section 35. 49.849 (4) (c) 2. b. of the statutes is created to read:

AB490,21,18 49.849 (4) (c) 2. b. The recipient's surviving spouse or child who is under age 21 or disabled transfers the property for less than fair market value, as described in sub. (5c) (d), during the spouse's or child's lifetime, the transferee sells the property during the spouse's or child's lifetime and places proceeds equal to the lesser of the department's lien or the sale proceeds due to the seller in a trust or bond, and the department is paid the secured amount upon the death of the recipient's spouse or disabled child or when the recipient's child who is not disabled reaches age 21.

AB490,36 Section 36. 49.849 (4) (c) 2. c. of the statutes is created to read:

AB490,22,2 49.849 (4) (c) 2. c. The surviving owner or transferee of the property, who is not the recipient's surviving spouse or child who is under age 21 or disabled, sells the property during the lifetime of the recipient's surviving spouse or child who is under age 21 or disabled and places proceeds equal to the lesser of the department's lien or the sale proceeds due to the seller in a trust or bond, and the department is paid the secured amount upon the death of the recipient's spouse or disabled child or when the recipient's child who is not disabled reaches age 21.

AB490,37 Section 37. 49.849 (7) of the statutes, as affected by 2013 Wisconsin Act 20, is amended to read:

AB490,22,11 49.849 (7) Rules for hardship waiver. The department shall promulgate rules establishing standards to determine whether the application of this section would work an undue hardship in individual cases. If the department determines that the application of this section would work an undue hardship in a particular case, the department shall waive the application of this section in that case. This subsection does not apply with respect to collecting from the property of a decedent if the decedent is a deceased nonrecipient surviving spouse.

AB490,38 Section 38. 59.43 (1) (w) of the statutes, as created by 2013 Wisconsin Act 20, is repealed.

AB490,39 Section 39. 223.07 (3) of the statutes is amended to read:

AB490,23,20 223.07 (3) If the depository institution at which a trust service office is to be established has exercised trust powers, the trust company bank and the depository institution shall enter into an agreement respecting those fiduciary powers to which the trust company bank shall succeed and shall file the agreement with the division. The trust company bank shall cause a notice of the filing, in a form prescribed by the division, to be published as a class 1 notice, under ch. 985, in the city, village or town where the depository institution is located. After filing and publication, the trust company bank establishing the office shall, as of the date the office first opens for business, without further authorization of any kind, succeed to and be substituted for the depository institution as to all fiduciary powers, rights, duties, privileges, and liabilities of the depository institution in its capacity as fiduciary for all estates, trusts, guardianships, and other fiduciary relationships of which the depository institution is then serving as fiduciary, except as may be otherwise specified in the agreement between the trust company bank and the depository institution. The trust company bank shall also be deemed named as fiduciary in all writings, including, but not limited to, wills, trusts, court orders, and similar documents and instruments naming the depository institution as fiduciary, signed before the date the trust office first opens for business, unless expressly negated by the writing or otherwise specified in the agreement between the trust company bank and the depository institution. On the effective date of the substitution, the depository institution shall be released and absolved from all fiduciary duties and obligations under such writings and shall discontinue its exercise of trust powers on all matters not specifically retained by the agreement. This subsection does not effect a discharge in the manner of s. 701.16 (6) if required by a court under s. 701.0201 (1) or other applicable statutes and does not absolve a depository institution exercising trust powers from liabilities arising out of any breach of fiduciary duty or obligation occurring prior to the date the trust service office first opens for business at the depository institution. This subsection does not affect the authority, duties, or obligations of a depository institution with respect to relationships which may be established without trust powers, including escrow arrangements, whether the relationships arise before or after the establishment of the trust service office.

AB490,40 Section 40. 223.105 (1) (c) of the statutes is amended to read:

AB490,23,23 223.105 (1) (c) "Trustee" has the meaning designated in s. 701.01 (8) 701.0103 (28).

AB490,41 Section 41. 445.125 (1) (a) 1. of the statutes is amended to read:

AB490,24,14 445.125 (1) (a) 1. Except as provided in sub. (3m), whenever a person, referred to in this subsection as the depositor, makes an agreement with another person selling or offering for sale funeral or burial merchandise or services, referred to in this subsection as the beneficiary, for the purchase of a casket, outer burial container not preplaced into the burial excavation of a grave, combination casket-outer burial container or other receptacle not described in sub. (4) (b) (a) 2. for the burial or other disposition of human remains or for the furnishing of funeral or burial services, either of which is intended to be provided for the final disposition of the body of a person, referred to in this subsection as the potential decedent, wherein the use of such personal property or the furnishing of such services is not immediately required, all payments made under the agreement shall be and remain trust funds, including interest and dividends if any, until occurrence of the death of the potential decedent, unless the funds are sooner released upon demand to the depositor, after written notice to the beneficiary.

AB490,42 Section 42. 445.125 (1) (a) 2. of the statutes is amended to read:

AB490,24,18 445.125 (1) (a) 2. Notwithstanding s. 701.12 (1), such Such agreements may be made irrevocable as to the first $3,000 of the funds paid under the agreement by each depositor.

AB490,43 Section 43. 445.125 (4) of the statutes is renumbered 445.125 (4) (a).

AB490,44 Section 44. 445.125 (4) (bn) of the statutes is created to read:

AB490,24,22 445.125 (4) (bn) Sections 701.0410 to 701.0418 do not apply to an agreement, interest, or dividend that is made irrevocable under sub. (1) (a) 2. to 4.

AB490,45 Section 45. 700.16 (1) (c) of the statutes is amended to read:

AB490,25,8 700.16 (1) (c) If a future interest or trust is created by exercise of a power of appointment, the permissible period is computed from the time the power of appointment is exercised if the power of appointment is a general power of appointment as defined in s. 702.01 (3) 702.02 (5) even if the general power of appointment is exercisable only by will; in. In the case of other powers of appointment the permissible period is computed from the time the power of appointment is created but facts at the time the power of appointment is exercised are considered in determining whether the power of alienation is suspended beyond a life or lives in being at the time of creation of the power of appointment plus 30 years.

AB490,46 Section 46. 700.27 (1) (d), (2) (a) 2. and (b), (4) (e), (5) (b), (7) (a) and (8) (a) of the statutes are amended to read:

AB490,25,12 700.27 (1) (d) "Power of appointment" has the meaning given in s. 702.01 (4) 702.02 (6).

AB490,25,20 (2) (a) 2. A person who is a recipient of property or beneficiary under an inter vivos governing instrument, donee of a power of appointment created by an inter vivos governing instrument, appointee under a power of appointment exercised by an inter vivos governing instrument, taker in default under a power of appointment created by an inter vivos governing instrument, or person succeeding to disclaimed property created by an inter vivos governing instrument may disclaim any property, including contingent or future interests or the right to receive discretionary distributions, by delivering a written instrument of disclaimer under this section.

AB490,26,2 (b) Partial disclaimer. Property transferred under an inter vivos governing instrument may be disclaimed in whole or in part, except that a partial disclaimer of property passing by an inter vivos governing instrument or by the exercise of a power of appointment may not be made if partial disclaimer is expressly prohibited by the inter vivos governing instrument or by the instrument exercising the power of appointment.

AB490,26,7 (4) (e) Interests arising by disclaimer. Notwithstanding pars. (a) and (b), a person whose interest in property arises by disclaimer or by default of exercise of a power of appointment created by an inter vivos governing instrument may disclaim at any time not later than 9 months after the day on which the prior instrument of disclaimer is delivered, or the date on which the donee's power of appointment lapses.

AB490,26,12 (5) (b) Delivery to trustee. If the trustee of any trust to which the interest or power of appointment relates does not receive the instrument of disclaimer under par. (a), a copy shall also be delivered to the trustee. Failure to deliver a copy of the instrument of disclaimer to the trustee within the time specified under sub. (4) does not affect the validity of any disclaimer.

AB490,26,25 (7) (a) In general. Subject to sub. (8), unless the inter vivos governing instrument provides otherwise, either expressly or as construed from extrinsic evidence, the disclaimed property devolves as if the disclaimant had died before the effective date of the transfer under the inter vivos governing instrument. If the disclaimed interest is a remainder contingent on surviving to the time of distribution, the disclaimed interest passes as if the disclaimant had died immediately before the time for distribution. If the disclaimant is an appointee under a power of appointment exercised by an inter vivos governing instrument, the disclaimed property devolves as if the disclaimant had died before the effective date of the exercise of the power of appointment. If the disclaimant is a taker in default under a power of appointment created by an inter vivos governing instrument, the disclaimed property devolves as if the disclaimant had predeceased the donee of the power of appointment.

AB490,27,10 (8) (a) Subsequent interest not held by disclaimant. Unless the inter vivos governing instrument provides otherwise, either expressly or as construed from extrinsic evidence, upon the disclaimer of a preceding interest, a subsequent interest not held by the disclaimant and limited to take effect in possession or enjoyment after the termination of the interest that is disclaimed accelerates to take effect as if the disclaimant had died immediately before the time when the disclaimed interest would have taken effect in possession or enjoyment or, if the disclaimant is an appointee under a power of appointment and that power of appointment has been exercised by a power of appointment, as if the disclaimant had died before the effective date of the exercise of the power of appointment.

AB490,47 Section 47. 701.01 of the statutes is repealed.

AB490,48 Section 48. Subchapter I (title) of chapter 701 [precedes 701.0101] of the statutes is created to read:

AB490,27,14 chapter 701

AB490,27,15 subchapter i

AB490,27,17 GENERAL PROVISIONS AND DEFINITIONS

AB490,49 Section 49. 701.0101 of the statutes is created to read:

AB490,27,19 701.0101 Short title. This chapter may be cited as the Wisconsin Trust Code.

AB490,50 Section 50. 701.0102 of the statutes is created to read:

AB490,27,24 701.0102 Scope. This chapter applies to express, charitable or noncharitable, and testamentary or living trusts, and any trust created pursuant to a statute, judgment, or decree that requires the trust to be administered in the manner of an express trust. This chapter does not apply to any of the following:

AB490,27,25 (1) A constructive or resulting trust.

AB490,28,1 (2) A guardianship.

AB490,28,2 (3) A conservatorship.

AB490,28,5 (4) A custodial arrangement made pursuant to the Uniform Transfers to Minors Act under ss. 54.854 to 54.898 or the Uniform Custodial Trust Act under ss. 54.950 to 54.988.

AB490,28,6 (5) A common trust or a collective investment fund.

AB490,28,7 (6) A trust created by a depository agreement with a financial institution.

AB490,28,11 (7) A trust made in connection with a business transaction, including a trust created under a bond indenture or collateral trust agreement or in connection with a structured finance transaction, a common law trust under s. 226.14, or a business trust.

AB490,28,12 (8) A voting trust.

AB490,28,14 (9)   A fund maintained pursuant to court order in conjunction with a bankruptcy proceeding, business liquidation, or class action lawsuit.

AB490,28,16 (10)   A trust that is part of an employee benefit arrangement or an individual retirement account.

AB490,28,18 (11)   A trust established under a qualified tuition savings program or education savings account.

AB490,28,21 (12)   A trust account maintained on behalf of a client or customer by a licensed service professional, including a trust account maintained by an attorney or by a real estate broker.

AB490,28,23 (13) Any other arrangement under which a person is a nominee or escrowee for another.

AB490,51 Section 51. 701.0103 of the statutes is created to read:

AB490,28,25 701.0103 Definitions. In this chapter:

AB490,29,2 (1) "Action," with respect to an act of a trustee, directing party, or trust protector, includes a failure to act.

AB490,29,5 (2) "Ascertainable standard" means a standard relating to an individual's health, education, support, or maintenance within the meaning of section 2041 (b) (1) (A) or 2514 (c) (1) of the Internal Revenue Code.

AB490,29,6 (3) "Beneficiary" means a person that satisfies any of the following:

AB490,29,7 (a) Has a present or future beneficial interest in a trust, vested or contingent.

AB490,29,9 (b) In a capacity other than that of trustee, trust protector, or a directing party, holds a power of appointment over trust property.

AB490,29,12 (4) "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose described in s. 701.0405 (1). This subsection does not apply in s. 701.1201.

AB490,29,13 (5) "Conservator" means a person appointed by a court pursuant to s. 54.76.

AB490,29,17 (6) "Directed trust property" means all or any portion of the property of a trust that is invested or managed by a directing party or is invested or managed at the direction of a directing party and for which the trustee has no investment or management responsibility.

AB490,29,24 (7) "Directing party" means a person who, in a trust instrument or court order, is granted a power to direct a trustee's investment or distribution decisions or a power to make investment or distribution decisions regarding trust property and the power is granted to the person in a capacity other than as a trustee or a trust protector. For purposes of this subsection, a power of appointment is not a power to direct a trustee's investment or distribution decisions or a power to make investment or distribution decisions regarding trust property.

AB490,30,2 (8) "Environmental law" means a federal, state, or local law, rule, regulation, or ordinance relating to protection or remediation of the environment.

AB490,30,3 (9) "General power of appointment" has the meaning given in s. 702.02 (5).

AB490,30,5 (10) "Guardian of the estate" means a person appointed by a court under s. 54.10 as a guardian of the estate of a minor or adult individual.

AB490,30,7 (11) "Guardian of the person" means a person appointed by a court under s. 54.10 as a guardian of the person of a minor or adult individual.

AB490,30,10 (12) "Incapacitated" means unable to receive and evaluate information effectively or to communicate decisions to such an extent that the individual lacks the capacity to manage his or her decisions.

AB490,30,12 (13) "Individual with a disability" means an individual who meets one of the following tests:

AB490,30,15 (a) The individual receives social security, supplemental security income, or medical assistance benefits on the basis of being an individual who is disabled, as defined by the applicable program.

AB490,30,23 (b) The individual has a mental or physical impairment of a type and severity that would cause the individual to be considered an individual who is disabled for purposes of participating in the social security, supplemental security income, or medical assistance program, if the individual applied to be eligible for one of those programs based on disability, and if the individual's education, work record, and engagement in substantial gainful activity were disregarded. The fact that the individual is age 65 or older does not bar the individual from being considered an individual with a disability.

AB490,30,25 (14) "Interests of the beneficiaries" means the beneficial interests provided in the terms of a trust.

AB490,31,3 (15) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended, or such subsequent federal revenue law as may be in effect from time to time.

AB490,31,5 (16) "Jurisdiction," with respect to a geographic area, includes a state or country.

AB490,31,9 (17) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity.

AB490,31,10 (18) "Power of appointment" has the meaning given in s. 702.02 (6).

AB490,31,12   (19) "Power of withdrawal" means a presently exercisable general power of appointment but does not include any of the following:

AB490,31,13 (a) A power exercisable by a trustee and limited by an ascertainable standard.

AB490,31,15 (b) A power exercisable by another person only upon consent of a trustee or of a person holding an adverse interest.

AB490,31,17 (20) "Property" means anything that may be the subject of ownership, whether real or personal or legal or equitable, or any interest therein.

AB490,31,19 (21) "Qualified beneficiary" means a beneficiary who, on the date on which the beneficiary's qualification is determined, satisfies any of the following:

AB490,31,20 (a) Is a distributee or permissible distributee of trust income or principal.

AB490,31,23 (b) Without considering the existence or exercise of a power of appointment, other than a power of appointment that has been irrevocably exercised and notice of the exercise has been given to the trustee, would be any of the following:

AB490,32,3 1. A distributee or permissible distributee of trust income or principal if the interests of the distributees described in par. (a) terminated on that date without causing the trust to terminate.

AB490,32,5 2. A distributee or permissible distributee of trust income or principal if the trust terminated on that date.

AB490,32,8 (22) "Revocable," as applied to a trust, means that the trust can be revoked by the settlor without the consent of the trustee or a person holding an adverse interest, regardless of whether the settlor is incapacitated.

AB490,32,13   (23) "Settlor" means a person, including a testator, who creates or contributes property to a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke the trust or withdraw that portion.

AB490,32,14 (24) "Special power of appointment " has the meaning given in s. 702.02 (7).

AB490,32,16 (25) "Spendthrift provision" means a term of a trust that restrains either or both of a voluntary or involuntary transfer of a beneficiary's interest.

AB490,32,20   (26) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, any territory or insular possession subject to the jurisdiction of the United States, and an Indian tribe, band, or nation recognized by federal law or formally acknowledged by a state.

AB490,32,23 (27) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding.