SB384,105,1716
(a) Paying the amount to the beneficiary's conservator or the beneficiary's
17guardian of the estate.
SB384,105,2118
(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.
SB384,105,2522
(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.
SB384,106,2
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.
SB384,106,6
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.
SB384,106,9
7(23) Resolve a dispute concerning the interpretation of the trust or its
8administration by mediation, arbitration, or other procedure for alternative dispute
9resolution.
SB384,106,13
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.
SB384,106,16
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.
SB384,106,19
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.
SB384,106,21
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:
SB384,107,4
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.
SB384,107,8
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.
SB384,107,10
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:
SB384,107,1111
(a) The release was induced by improper conduct of the trustee.
SB384,107,1312
(b) The beneficiary, at the time of the release, did not know of the beneficiary's
13rights or of the material facts relating to the breach.
SB384,151
14Section
151. 701.0818 of the statutes is created to read:
SB384,107,20
15701.0818 Trust protectors. (1) Appointment. A settlor in a trust instrument,
16a court in a trust instrument or court order, or interested persons in a nonjudicial
17settlement agreement may provide for the appointment of a trust protector, whether
18referred to as a trust protector, another title, or no title. A trust protector has only
19the powers granted to the trust protector in the trust instrument, court order, or
20nonjudicial settlement agreement.
SB384,107,25
21(2) Trust protector powers; legal capacity. (a) A settlor in a trust instrument,
22a court in a trust instrument or court order, or interested persons in a nonjudicial
23settlement agreement may specify the legal capacity in which a particular power is
24exercisable by a trust protector and whether a power granted to the trust protector
25in a capacity other than a fiduciary capacity must be exercised in good faith.
SB384,108,3
1(b) If the settlor, court, or interested persons do not specify the legal capacity
2in which a particular power is exercisable by the trust protector, all of the following
3apply:
SB384,108,54
1. The power is exercisable in a fiduciary capacity if it is a power to do any of
5the following:
SB384,108,66
a.
Interpret or enforce the terms of the trust at the request of the trustee.
SB384,108,77
b. Review and approve the trustee's reports or accounting.
SB384,108,88
c.
Resolve disputes between the trustee or a directing party and a beneficiary.
SB384,108,99
d. Consent to or veto distributions to a beneficiary.
SB384,108,1010
e. Consent to or veto investment actions.
SB384,108,1211
2.
If it is not a power described in subd. 1. a. to e., the power is exercisable in
12a nonfiduciary capacity, including a power to do any of the following:
SB384,108,1513
a. Modify or amend the trust instrument to respond to opportunities related
14to, or changes in, restraints on alienation or other state laws restricting the terms
15of a trust, the distribution of trust property, or the administration of the trust.
SB384,108,1716
b. Modify or amend the trust instrument to achieve a different tax status or to
17respond to changes in federal or state law.
SB384,108,1918
c. Change the principal place of administration, the tax situs of the trust, or the
19governing law of the trust.
SB384,108,2120
d. Eliminate or modify the interests of a beneficiary, add a new beneficiary or
21class of beneficiaries, or select a beneficiary from an indefinite class.
SB384,108,2222
e. Modify the terms of a power of appointment granted under the trust.
SB384,108,2423
f. Remove, replace, or appoint a trustee, trust protector, or directing party or
24a successor trustee, trust protector, or directing party.
SB384,108,2525
g. Terminate the trust.
SB384,109,1
1h. Appoint assets to a new trust under s. 701.0418.
SB384,109,32
i. Advise the trustee on matters concerning a beneficiary, including whether to
3provide information to a beneficiary under s. 701.0813.
SB384,109,54
j.
Correct errors or ambiguities in the terms of the trust that might otherwise
5require court construction or defeat the settlor's intent.
SB384,109,86
3.
Notwithstanding subds. 1. and 2., a trust protector who is also the settlor
7may exercise any power granted to the trust protector in the trust protector's
8personal interests.
SB384,109,119
4. Notwithstanding subd. 2., a trust protector who is also a qualified beneficiary
10may exercise any power granted to the trust protector that is exercisable in a
11nonfiduciary capacity in the trust protector's personal interests.
SB384,109,1412
(c)
Notwithstanding pars. (a) and (b) and any provision in the trust instrument
13to the contrary, a trust protector who is also serving as the trustee or a directing party
14shall exercise any power granted to the trust protector in a fiduciary capacity.
SB384,109,18
15(3) Trust protector duties. (a) If a power is exercisable in a fiduciary capacity,
16the trust protector shall act in good faith and shall exercise the power in a manner
17that is consistent with the terms and purposes of the trust instrument, court order,
18or nonjudicial settlement agreement and the interests of the beneficiaries.
SB384,109,2119
(b)
If a power is exercisable in a nonfiduciary capacity, the trust protector shall
20act in good faith unless the trust instrument, court order, or nonjudicial settlement
21agreement provides otherwise.
SB384,109,2422
(c)
A trust protector does not have a duty to exercise its powers, to monitor the
23conduct of the trustee or a directing party, or to monitor changes in the law or
24circumstances of the beneficiaries.
SB384,110,2
1(4) Liability. A trust protector is liable for any loss that results from a breach
2of the trust protector's duties, except as follows:
SB384,110,43
(a) If the trust protector is also the settlor, the trust protector is not liable for
4any loss that results from a breach of the trust protector's duties.
SB384,110,75
(b) If the trust protector is also a qualified beneficiary, the trust protector is not
6liable for any loss that results from a breach of the trust protector's duties for a power
7that is exercised in a nonfiduciary capacity.
SB384,110,10
8(5) Resignation and release of powers. A trust protector may resign or
9release a power granted to the trust protector by giving written notice to the trustee
10and to any successor trust protector.
SB384,110,12
11(6) Prohibited actions. A trust protector may not exercise a power granted to
12the trust protector to do any of the following:
SB384,110,1713
(a) Except as provided in sub. (2) (b) 3. and 4., create or expand any beneficial
14interest, power of appointment, right of withdrawal, or right to receive trust property
15as a result of the exercise of a power of appointment if the creation or expansion
16would benefit the trust protector, the trust protector's estate, the trust protector's
17creditors, or creditors of the trust protector's estate.
SB384,110,1818
(b) Modify or amend a trust to do any of the following:
SB384,110,21191. Remove a requirement pursuant to
42 USC 1396p (d) (4) to pay back a
20governmental entity for benefits provided to the permissible beneficiary at the death
21of that beneficiary.
SB384,110,2322
2. Reduce or eliminate an income interest of an income beneficiary of any of the
23following trusts:
SB384,111,224
a. A trust for which a marital deduction has been taken for federal or state
25estate tax purposes under section
2056,
2056A, or
2523 of the Internal Revenue Code
1or any comparable provision of applicable state law, during the life of the settlor's
2spouse.
SB384,111,43b. A charitable remainder trust under section
664 of the Internal Revenue
4Code, during the life of the noncharitable beneficiary.
SB384,111,65c. A trust in which the settlor has a qualified interest under section
2702 (b)
6of the Internal Revenue Code, during any period in which the settlor is a beneficiary.
SB384,111,87
d. A trust for which an election as a qualified Subchapter S Trust under section
81361(d) of the Internal Revenue Code is in place.
SB384,111,119
(c) Modify any beneficial interest in a trust that qualified for a marital
10deduction or charitable deduction from federal or state estate tax in a manner that
11would have caused the trust not to qualify for the deduction.
SB384,111,16
12(7) Settlor rights. A trust protector is not subject to the direction of the settlor
13and the settlor may not bring a cause of action against the trust protector. A trust
14protector may consider a settlor's goals, objectives, and philosophies in establishing
15the trust and the trust's structure when exercising the powers granted to the trust
16protector and may do so regardless of whether the settlor is deceased.
SB384,111,24
17(8) Duties of a trustee and a directing party. (a)
A trustee and a directing
18party shall act in accordance with a trust protector's exercise of a power granted to
19the trust protector. A trustee and a directing party are not liable for acting in
20accordance with the trust protector's exercise of a power granted to the trust
21protector unless the attempted exercise is manifestly contrary to the power granted
22to the trust protector or the trustee or the directing party knows that the attempted
23exercise would constitute a serious breach of a duty that the trust protector owes to
24the beneficiaries of the trust.
SB384,112,6
1(b) A trustee and a directing party do not have a duty to monitor the conduct
2of the trust protector, provide advice to or consult with the trust protector, or
3communicate with, warn, or apprise any beneficiary concerning instances in which
4the trustee or the directing party would or might have exercised the trustee's or the
5directing party's discretion in a manner different from the manner in which the trust
6protector exercised its discretion.
SB384,112,15
7(9) Right to information. (a) A trust protector may request information about
8the trust from the trustee and, if the requested information is related to a power
9granted to the trust protector, the trustee shall provide the requested information to
10the trust protector. If a trustee is bound by any confidentiality restrictions with
11respect to information requested by a trust protector, the trustee may require that
12the trust protector agree to be bound by the confidentiality restrictions before
13delivering such information to the trust protector. A trustee is not liable to any
14beneficiary for any loss or damages resulting from the trustee providing information
15to the trust protector that is related to the power granted to the trust protector.
SB384,112,1816
(b) Except as otherwise provided in this chapter, a trustee does not have to
17provide any information to the trust protector that the trust protector does not
18request.
SB384,112,21
19(10) Payment or reimbursement of attorney fees and costs. A trustee shall,
20in accordance with s. 701.1004, pay or reimburse a trust protector for attorney fees
21and costs to defend any claim made against the trust protector.
SB384,112,24
22(11) Application of other sections to trust protectors. Sections 701.0701,
23701.0708, 701.0709, 701.1001 to 701.1003, and 701.1005 to 701.1010 apply to a trust
24protector as if the trust protector is the trustee.
SB384,113,3
1(12) Jurisdiction. A person who accepts an appointment as a trust protector
2of a trust submits to the jurisdiction of the courts of this state, as provided in s.
3701.0202 (1).
SB384,152
4Section
152. 701.0819 of the statutes is created to read:
SB384,113,8
5701.0819 Marital deduction transfers.
(1) For purposes of this section,
6"marital deduction transfer" means a lifetime or testamentary transfer of property
7that is intended to qualify for the marital deduction as indicated by the terms of the
8trust.
SB384,113,11
9(2) In interpreting, construing, or administering a trust instrument, absent a
10clear expression of intent by the settlor to the contrary, a trustee shall apply the
11following presumptions that may only be rebutted by clear and convincing evidence:
SB384,113,1312
(a) The settlor intended to take advantage of tax deductions, exemptions,
13exclusions, and credits.
SB384,113,1614
(b) The settlor intended that any transfer made to a spouse outright and free
15of trust qualify for the gift or estate tax marital deduction and is a marital deduction
16transfer.
SB384,113,2317
(c) If the trust instrument refers to a trust as a marital trust, qualified
18terminable interest property trust, or spousal trust, or refers to qualified terminable
19interest property, section
2044,
2056,
2056A, or
2523 of the Internal Revenue Code,
20or a similar provision of applicable state law, the settlor intended that the trust and
21property passing to the trust qualify for the applicable gift or estate tax marital
22deduction and that the transfer qualifies for the marital deduction for federal and
23state gift or estate tax purposes.
SB384,114,3
1(3) If a trust receives a marital deduction transfer, the trust instrument shall
2be construed to comply with the marital deduction provisions of the Internal
3Revenue Code.
SB384,114,9
4(4) If a trust receives a marital deduction transfer, the trustee has all the
5powers, duties, and discretionary authority necessary to comply with the marital
6deduction provisions of the Internal Revenue Code. The trustee may not take any
7action or have any power that may impair the availability of the marital deduction,
8but this does not require the trustee to make the election under either section
2056 9(b) (7),
2056A (a) (3), or
2523 (f) of the Internal Revenue Code.
SB384,153
10Section
153. 701.09 (title), (1) and (2) of the statutes are renumbered 853.34
11(title), (1) and (2).
SB384,154
12Section
154. 701.09 (3), (4) and (5) of the statutes are repealed.
SB384,155
13Section
155. Subchapter IX (title) of chapter 701 [precedes 701.0901] of the
14statutes is created to read:
SB384,114,1515
chapter 701
SB384,114,1616
subchapter IX
SB384,114,1717
investment management of trusts
SB384,156
18Section
156. 701.0901 of the statutes is created to read:
SB384,114,21
19701.0901 Application of the Wisconsin Prudent Investor Act. Except as
20provided in this subchapter, the investment management of the property of a trust
21is governed by ch. 881.
SB384,157
22Section
157. 701.0902 of the statutes is created to read:
SB384,114,24
23701.0902 Directed trust property. (1) A directing party who has power over
24directed trust property shall do all of the following:
SB384,115,3
1(a) Direct the trustee on the retention, purchase, sale, exchange, tender,
2encumbrance, or any other investment transaction of the directed trust property and
3the investment and reinvestment of principal and income.
SB384,115,54
(b) Direct the trustee with respect to the management, control, and voting
5powers, including voting proxies, of the directed trust property.
SB384,115,96
(c) Select and determine reasonable compensation of one or more outside
7investment advisors, managers, consultants, or counselors, which may include the
8trustee, and delegate investment authority to them pursuant to the investment
9delegation provisions under s. 881.01 (10).
SB384,115,1210
(d) Determine the frequency of and methodology for valuing directed trust
11property and provide the value of property for which there is no readily available
12daily market value.
SB384,115,14
13(2) A trustee who has no power over directed trust property does not have a
14duty to do any of the following with respect to the directed trust property:
SB384,115,1515
(a) Prepare or review investment policy statements.