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22701.0811 Enforcement and defense of claims. A trustee shall take
23reasonable steps to enforce claims of the trust known to the trustee and to defend
24claims against the trust known to the trustee.
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25Section
145. 701.0812 of the statutes is created to read:
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1701.0812 Collecting trust property; duties of successor trustees. (1) A
2trustee shall take reasonable steps to compel a former trustee or other person to
3deliver trust property to the trustee, and to redress a breach of trust known to the
4trustee to have been committed by a trustee or former trustee, or a trust protector
5or former trust protector.
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6(2) A successor trustee does not have a duty to examine the accounts of a former
7trustee.
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8Section
146. 701.0813 of the statutes is created to read:
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9701.0813 Duty to inform and report.
(1) A trustee shall keep the
10distributees or permissible distributees of trust income or principal, and other
11qualified beneficiaries who so request, reasonably informed about the
12administration of the trust. Unless unreasonable under the circumstances, a trustee
13shall promptly respond to a qualified beneficiary's request for information related to
14the administration of the trust.
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15(2) A trustee shall do all of the following:
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(a) Upon the request of a qualified beneficiary for a copy of the trust
17instrument, promptly furnish to the qualified beneficiary either a copy of the
18portions of the trust instrument relating to the interest of the qualified beneficiary
19or a copy of the trust instrument.
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(b) Within a reasonable period of time after accepting a trusteeship, notify the
21qualified beneficiaries of the acceptance and of the trustee's name, address, and
22telephone number.
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(c) Within a reasonable period of time after the date on which the trustee
24acquires knowledge of the creation of an irrevocable trust, or the date on which the
25trustee acquires knowledge that a formerly revocable trust has become irrevocable,
1whether by the death of the settlor or otherwise, notify the qualified beneficiaries of
2all of the following:
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1. The trust's existence.
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2. The identity of the settlor or settlors.
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3. The name, address, and telephone number of each directing party and trust
6protector.
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4. The right to request a copy of the documentation referred to in par. (a).
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5. The right to request information under sub. (1).
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6. The right to a trustee's report as provided in sub. (3).
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(d) Notify the distributees or permissible distributees of trust income or
11principal, and other qualified beneficiaries who so request, of any change in the
12method or rate of the trustee's compensation.
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(e) Upon receiving a petition to the court for action under ss. 701.0411 to
14701.0416 that does not identify each trust protector and each directing party of the
15trust, notify the petitioning party of the identity of each trust protector and directing
16party, including the name, address, and telephone number of each trust protector
17and directing party, who is serving at the time the petition is filed.
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18(3) (a) At least annually and upon the termination of a trust, a trustee shall
19send to the distributees or permissible distributees of trust income or principal, and
20to other qualified beneficiaries who request it, all of the following:
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1. A report of the trust property, liabilities, receipts, and disbursements,
22including the source and amount of the trustee's compensation.
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2. A listing of the trust assets and, if feasible, their respective market values.
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(b) Upon a vacancy in a trusteeship, unless a cotrustee remains in office, the
25former trustee shall send a report containing the information described under par.
1(a) 1. to the qualified beneficiaries. A personal representative or guardian may send
2the qualified beneficiaries a report containing the information described in par. (a)
31. on behalf of a deceased or incapacitated trustee.
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4(4) A qualified beneficiary may waive the right to a trustee's report or other
5information otherwise required to be furnished under this section. A qualified
6beneficiary, with respect to future reports and other information, may withdraw a
7waiver previously given.
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8(5) Subsections (2) (b) and (c) and (3) do not apply to a trustee who accepts a
9trusteeship before the effective date of this subsection .... [LRB inserts date], to an
10irrevocable trust created before the effective date of this subsection .... [LRB inserts
11date], or to a revocable trust that becomes irrevocable before the effective date of this
12subsection .... [LRB inserts date].
SB384,147
13Section
147. 701.0814 of the statutes is created to read:
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14701.0814 Discretionary powers; tax savings. (1) Notwithstanding the
15breadth of discretion granted to a trustee in the terms of the trust, including the use
16of such terms as "absolute," "sole," or "uncontrolled," the trustee shall exercise a
17discretionary power in good faith and in accordance with the terms and purposes of
18the trust and the interests of the beneficiaries. A court may not determine that a
19trustee abused its discretion merely because the court would have exercised the
20discretion in a different manner or would not have exercised the discretion.
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21(2) Subject to sub. (4), and unless the terms of the trust expressly indicate that
22a provision of this subsection does not apply, all of the following apply:
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(a) A person other than a settlor who is a beneficiary and a trustee, directing
24party, or trust protector of a trust that confers on the trustee, directing party, or trust
25protector a power to make discretionary distributions to or for the trustee's, directing
1party's, or trust protector's personal benefit may exercise the power only in
2accordance with an ascertainable standard.
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(b) A trustee, directing party, or trust protector may not exercise a power to
4make discretionary distributions to satisfy a legal obligation of support that the
5trustee, directing party, or trust protector personally owes another person.
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6(3) A power whose exercise is limited or prohibited by sub. (2) may be exercised
7by a majority of the remaining trustees, directing parties, or trust protectors whose
8exercise of the power is not so limited or prohibited. If the power of all trustees,
9directing parties, or trust protectors is so limited or prohibited, the court may appoint
10a trustee, directing party, or trust protector with authority to exercise the power.
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11(4) Subsection (2) does not apply to any of the following:
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(a) A power held by the settlor's spouse who is the trustee, directing party, or
13trust protector of a trust for which a marital deduction, as defined in section
2056 (b)
14(5) or
2523 (e) of the Internal Revenue Code, was previously allowed.
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(b) A trust during a period when the trust may be revoked or amended by its
16settlor.
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(c) A trust if contributions to the trust qualify for the annual exclusion under
18section
2503 (c) of the Internal Revenue Code.
SB384,148
19Section
148. 701.0815 of the statutes is created to read:
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20701.0815 General powers of trustee.
(1) A trustee, without authorization
21by the court, may exercise the following powers:
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(a) Powers conferred by the terms of the trust.
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(b) Except as limited by the terms of the trust, all of the following powers:
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1. All powers over the trust property that an unmarried, competent owner has
25over individually owned property.
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12. Any other powers appropriate to achieve the proper investment,
2management, and distribution of the trust property.
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3. Any other powers conferred by this chapter.
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4(2) The exercise of a power is subject to the fiduciary duties prescribed by this
5chapter.
SB384,149
6Section
149. 701.0816 of the statutes is created to read:
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7701.0816 Specific powers of trustee. Without limiting the authority
8conferred by s. 701.0815, a trustee may do all of the following:
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9(1) Collect trust property and accept or reject additions to the trust property
10from a settlor or any other person.
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11(2) Acquire or sell property, for cash or on credit, at public or private sale.
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12(3) Exchange, partition, or otherwise change the character of trust property.
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13(4) Deposit trust money in an account in a regulated financial-service
14institution.
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15(5) Borrow money, with or without security, and mortgage or pledge trust
16property for a period within or extending beyond the duration of the trust.
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17(6) With respect to an interest in a proprietorship, partnership, limited liability
18company, business trust, corporation, or other form of business or enterprise,
19continue the business or other enterprise and take any action that may be taken by
20shareholders, members, or property owners, including merging, dissolving, or
21otherwise changing the form of business organization or contributing additional
22capital.
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23(7) With respect to a stock or other security, exercise the rights of an absolute
24owner, including the right to do any of the following:
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1(a) Vote, or give proxies to vote, with or without power of substitution, or enter
2into or continue a voting trust agreement.
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(b) Hold a stock or other security in the name of a nominee or in other form
4without disclosure of the trust so that title may pass by delivery.
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(c) Pay calls, assessments, and other sums chargeable or accruing against the
6stock or other security, and sell or exercise stock subscription or conversion rights.
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(d) Deposit the stock or other security with a depository or other regulated
8financial-service institution.
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9(8) With respect to an interest in real property, construct, or make ordinary or
10extraordinary repairs to, alterations to, or improvements in, buildings or other
11structures, demolish improvements, raze existing or erect new party walls or
12buildings, subdivide or develop land, dedicate land to public use or grant public or
13private easements, and make or vacate plats and adjust boundaries.
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14(9) Enter into a lease for any purpose as lessor or lessee, including a lease or
15other arrangement for exploration and removal of natural resources, with or without
16the option to purchase or renew, for a period within or extending beyond the duration
17of the trust.
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18(10) Grant an option involving a sale, lease, or other disposition of trust
19property or acquire an option for the acquisition of property, including an option
20exercisable beyond the duration of the trust, and exercise an option so acquired.
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21(11) Insure the property of the trust against damage or loss and insure the
22trustee, the trustee's agents, any directing party, any trust protector, and the
23beneficiaries against liability arising from the administration of the trust.
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24(12) Abandon or decline to administer property of no value or of insufficient
25value to justify its collection or continued administration.
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1(13) With respect to possible liability for violation of environmental law, do any
2of the following:
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(a) Inspect or investigate property the trustee holds or has been asked to hold,
4or property owned or operated by an organization in which the trustee holds or has
5been asked to hold an interest, for the purpose of determining the application of
6environmental law with respect to the property.
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(b) Take action to prevent, abate, or otherwise remedy any actual or potential
8violation of any environmental law affecting property held directly or indirectly by
9the trustee, whether taken before or after the assertion of a claim or the initiation
10of governmental enforcement.
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(c) Decline to accept property into trust or disclaim any power with respect to
12property that is or may be burdened with liability for violation of environmental law.
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(d) Compromise claims against the trust that may be asserted for an alleged
14violation of environmental law.
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(e) Pay the expense of any inspection, review, abatement, or remedial action to
16comply with environmental law.
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17(14) Pay or contest any claim, settle a claim by or against the trust, and release,
18in whole or in part, a claim belonging to the trust.
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19(15) Pay taxes; assessments; compensation of the trustee, a directing party, a
20trust protector, and employees and agents of the trust; and other expenses incurred
21in the administration of the trust.
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22(16) Exercise elections with respect to federal, state, and local taxes.
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23(17) Select a mode of payment under any employee benefit or retirement plan,
24annuity, or life insurance payable to the trustee, exercise rights thereunder,
1including exercise of the right to indemnification for expenses and against liabilities,
2and take appropriate action to collect the proceeds.
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3(18) Make loans out of trust property, including loans to a beneficiary on terms
4and conditions the trustee considers to be fair and reasonable under the
5circumstances. The trustee has a lien on future distributions for repayment of loans
6under this subsection.
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7(19) Pledge trust property to guarantee loans made by others to the beneficiary.
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8(20) Appoint a trustee to act in another jurisdiction with respect to trust
9property located in the other jurisdiction, confer upon the appointed trustee all of the
10powers and duties of the appointing trustee, require that the appointed trustee
11furnish security, and remove any trustee so appointed.
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12(21) Pay an amount distributable to a beneficiary who is under a legal
13disability or who the trustee reasonably believes is incapacitated, by paying it
14directly to the beneficiary, applying it for the beneficiary's benefit, or by doing any
15of the following:
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(a) Paying the amount to the beneficiary's conservator or the beneficiary's
17guardian of the estate.
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(b) Paying the amount to the beneficiary's custodian under the Uniform
19Transfers to Minors Act under ss. 54.854 to 54.898 or the Uniform Custodial Trust
20Act under ss. 54.950 to 54.988, and, for that purpose, creating a custodianship or
21custodial trust.
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(c) If the trustee does not know of a conservator, guardian of the estate,
23custodian, or custodial trustee, paying the amount to an adult relative or other
24person having legal or physical care or custody of the beneficiary or to the guardian
25of the person of the beneficiary, to be expended on the beneficiary's behalf.
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1(d) Managing the amount as a separate fund on the beneficiary's behalf, subject
2to the beneficiary's continuing right to withdraw the distribution.
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3(22) On distribution of trust property or the division or termination of a trust,
4make distributions in divided or undivided interests, allocate particular assets in
5proportionate or disproportionate shares, value the trust property for those
6purposes, and adjust for resulting differences in valuation.
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7(23) Resolve a dispute concerning the interpretation of the trust or its
8administration by mediation, arbitration, or other procedure for alternative dispute
9resolution.
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10(24) Prosecute or defend an action, claim, or judicial proceeding in any
11jurisdiction to protect trust property or the trustee, a directing party, or a trust
12protector in the performance of the trustee's, directing party's or trust protector's
13duties.
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14(25) Sign and deliver contracts and other instruments that are useful to
15achieve or facilitate the exercise of the trustee's, directing party's or trust protector's
16powers.
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17(26) On termination of the trust, exercise the powers appropriate to wind up
18the administration of the trust and distribute the trust property to the persons
19entitled to it.
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20(27) Create or fund a plan under section
529 of the Internal Revenue Code, or
21other college savings vehicle, for a beneficiary's benefit.
SB384,150
22Section
150. 701.0817 of the statutes is created to read:
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23701.0817 Distribution upon termination.
(1) Upon termination or partial
24termination of a trust, the trustee may send a proposal for distribution to the
25beneficiaries of the trust. The right of any beneficiary to whom the proposal is sent
1to object to the proposed distribution terminates if the beneficiary does not notify the
2trustee of an objection within 30 days after the proposal was sent but only if the
3proposal informed the beneficiary of the right to object and of the time allowed for
4objection.
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5(2) Upon the occurrence of an event terminating or partially terminating a
6trust, the trustee shall proceed within a reasonable time to distribute the trust
7property to the persons entitled to it, subject to the right of the trustee to retain a
8reasonable reserve for the payment of debts, expenses, and taxes.
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9(3) A release by a beneficiary of a trustee from liability for breach of trust is
10invalid to the extent any of the following applies:
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(a) The release was induced by improper conduct of the trustee.