SB384,227 11Section 227. 701.20 (4c) (d) of the statutes is renumbered 701.1105 (3) and
12amended to read:
SB384,139,1513 701.1105 (3) A sui juris qualified beneficiary may object to the proposed action
14by giving a written objection to the trustee within the time specified in the notice
15under par. (b) 4. c. sub. (1) (d) 3.
SB384,228 16Section 228. 701.20 (4c) (e) of the statutes is renumbered 701.1105 (4) and
17amended to read:
SB384,139,2118 701.1105 (4) A trustee may decide not to take a proposed action after the
19trustee receives a written objection to the proposed action or at any other time for any
20other reason. In that case, the trustee shall give written notice to the sui juris
21qualified beneficiaries of the decision not to take the proposed action.
SB384,229 22Section 229. 701.20 (4c) (f) of the statutes is renumbered 701.1105 (5) and
23amended to read:
SB384,140,624 701.1105 (5) If a trustee receives a written objection to a proposed action within
25the time specified in the notice under par. (b) 4. c. sub. (1) (d) 3., either the trustee

1or the qualified beneficiary making the written objection may petition the court to
2have the proposed action approved, modified, or prohibited. In the court proceeding,
3the qualified beneficiary objecting to the proposed action has the burden of proving
4that the proposed action should be modified or prohibited. A qualified beneficiary
5who did not make the written objection may oppose the proposed action in the court
6proceeding.
SB384,230 7Section 230. 701.20 (4c) (g) of the statutes is renumbered 701.1105 (6) and
8amended to read:
SB384,140,119 701.1105 (6) For purposes of this subsection section, a proposed action under
10sub. (4) s. 701.1104 includes a course of action or a decision not to take action under
11sub. (4) s. 701.1104.
SB384,231 12Section 231. 701.20 (4g) (title) of the statutes is renumbered 701.1106 (title).
SB384,232 13Section 232. 701.20 (4g) (a) (intro.) of the statutes is renumbered 701.1106 (1)
14(intro.) and amended to read:
SB384,140,1615 701.1106 (1) (intro.) Subject to par. (d) sub. (4), a trust may be converted to a
16unitrust in any of the following ways:
SB384,233 17Section 233. 701.20 (4g) (a) 1. (intro.) of the statutes is renumbered 701.1106
18(1) (a) (intro.) and amended to read:
SB384,140,2019 701.1106 (1) (a) (intro.) By the trustee, at his or her own discretion or at the
20request of a qualified beneficiary, if all of the following apply:
SB384,234 21Section 234. 701.20 (4g) (a) 1. a. of the statutes is renumbered 701.1106 (1)
22(a) 1.
SB384,235 23Section 235. 701.20 (4g) (a) 1. b. of the statutes is renumbered 701.1106 (1)
24(a) 2. and amended to read:
SB384,141,5
1701.1106 (1) (a) 2. The trustee provides notice in the same manner as provided
2in sub. (4c) (b) s. 701.1105 (1) of the trustee's intention to convert the trust to a
3unitrust, and the notice advises how the unitrust will operate, including the fixed
4percentage under par. (c) 1. sub. (3) (a) and any other initial determinations under
5par. (c) 4. sub. (3) (d) that the trustee intends to follow.
SB384,236 6Section 236. 701.20 (4g) (a) 1. c. of the statutes is repealed.
SB384,237 7Section 237. 701.20 (4g) (a) 1. d. of the statutes is renumbered 701.1106 (1)
8(a) 3. and amended to read:
SB384,141,109 701.1106 (1) (a) 3. Every sui juris qualified beneficiary consents to the
10conversion to a unitrust in a writing delivered to the trustee.
SB384,238 11Section 238. 701.20 (4g) (a) 1. e. of the statutes is renumbered 701.1106 (1) (a)
124.
SB384,239 13Section 239. 701.20 (4g) (a) 2. (intro.) of the statutes is renumbered 701.1106
14(1) (b) (intro.) and amended to read:
SB384,141,1615 701.1106 (1) (b) (intro.) By a court on the petition of the trustee or a qualified
16beneficiary, if all of the following apply:
SB384,240 17Section 240. 701.20 (4g) (a) 2. a. of the statutes is renumbered 701.1106 (1)
18(b) 1. and amended to read:
SB384,141,2319 701.1106 (1) (b) 1. The trustee or qualified beneficiary has provided notice
20under sub. (4c) s. 701.1105 of the intention to request the court to convert the trust
21to a unitrust, and the notice advises how the unitrust will operate, including the fixed
22percentage under par. (c) 1. sub. (3) (a) and any other initial determinations under
23par. (c) 4. sub. (3) (d) that will be requested.
SB384,241 24Section 241. 701.20 (4g) (a) 2. b. of the statutes is renumbered 701.1106 (1)
25(b) 2.
SB384,242
1Section 242. 701.20 (4g) (b), (c), (d) and (e) of the statutes are renumbered
2701.1106 (2), (3), (4) and (5), and 701.1106 (2), (3) (a), (b), (c), (d) 7., (f) (intro.) and 2.,
3(g) (intro.), 1. and 3. and (h), (4) (a) (intro.) and 1. and (b) and (5), as renumbered, are
4amended to read:
SB384,142,85 701.1106 (2) In deciding whether to convert the trust to a unitrust under par.
6(a) 1.
sub. (1) (a) and in determining the fixed percentage under sub. (3) (b) 1., the
7trustee shall consider all relevant factors under sub. (4) (b) 1. to 9. s. 701.1104 (2) (a)
8to (i).
SB384,142,17 9(3) (a) If a trust is converted to a unitrust under this subsection section by the
10trustee or a court, notwithstanding sub. (3) (a) 1. s. 701.1103 (1) (a) and 4. (d) and
11s. 701.21 701.1136 (4) the trustee shall make distributions in accordance with the
12creating trust instrument, except that any reference in the creating trust instrument
13to "income" means a fixed percentage of the net fair market value of the unitrust's
14assets, whether such assets otherwise would be considered income or principal under
15this section subchapter, averaged over a preceding period determined by the trustee,
16which is at least 3 years but not more than 5 years, or the period since the original
17trust was created, whichever is less.
SB384,142,2218 (b) 1. Subject to subd. 2. b., if the trust is converted to a unitrust under par. (a)
191.
sub. (1) (a), the trustee shall determine the fixed percentage to be applied under
20subd. 1. par. (a), and the notice under par. (a) 1. b. sub. (1) (a) 2. must state the fixed
21percentage. If the trust is converted to a unitrust under par. (a) 2. sub. (1) (b), the
22court shall determine the fixed percentage to be applied under subd. 1. par. (a).
SB384,142,2423 2. Any fixed percentage under subd. 1. par. (a) that is determined by a trustee
24may not be less than 3 percent nor more than 5 percent.
SB384,143,3
1(c) After a trust is converted to a unitrust, the trustee may, subject to the notice
2requirement under sub. (4c) s. 701.1105 and with the consent of every sui juris
3qualified beneficiary, do any of the following:
SB384,143,54 1. Convert the unitrust back to the original trust under the creating trust
5instrument.
SB384,143,76 2. Change the fixed percentage under subd. 1. par. (a), subject to subd. 2. b. par.
7(b) 2.
SB384,143,98 (d) 7. The averaging under subd. 1. par. (a) to a different preceding period,
9which is at least 3 years but not more than 5 years.
SB384,143,1210 (f) (intro.) Unless otherwise provided by the creating trust instrument, the
11unitrust distribution is considered to have been paid from the following sources in
12the order of priority:
SB384,143,1413 2. Ordinary income for federal income tax purposes that is not net income
14under subd. 6. a. 1.
SB384,143,1615 (g) (intro.) A court may, on the petition of the trustee or a qualified beneficiary,
16do any of the following:
SB384,143,1817 1. Change the fixed percentage that was determined under subd. 2. par. (b) by
18the trustee or by a prior court order.
SB384,143,2019 3. Average the valuation of the unitrust's assets over a period other than that
20specified in subd. 1. par. (a).
SB384,143,2421 (h) Conversion to a unitrust under this subsection section does not affect a
22provision in the creating trust instrument that directs or authorizes the trustee to
23distribute principal or that authorizes a beneficiary to withdraw a portion or all of
24the principal.
SB384,144,2
1(4) (a) (intro.) A trust may not be converted under this subsection section to a
2unitrust if any of the following applies:
SB384,144,33 1. The creating trust instrument specifically prohibits the conversion.
SB384,144,94 (b) Notwithstanding subd. 1. par. (a), if a trust may not be converted to a
5unitrust solely because subd. 1. g. par. (a) 7. applies to a trustee, a cotrustee, if any,
6to whom subd. 1. g. par. (a) 7. does not apply may convert the trust to a unitrust under
7par. (a) 1. sub. (1) (a), unless prohibited by the creating instrument, or a court may
8convert the trust to a unitrust under par. (a) 2. sub. (1) (b) on the petition of a trustee
9or qualified beneficiary.
SB384,144,16 10(5) A trustee may release the power conferred by par. (a) 1. sub. (1) (a) if the
11trustee is uncertain about whether possessing or exercising the power will cause a
12result described in par. (d) 1. b. sub. (4) (a) 2. to f. 6. or if the trustee determines that
13possessing or exercising the power will or may deprive the trust of a tax benefit or
14impose a tax burden not described in par. (d) 1. sub. (4) (a). The release may be
15permanent or for a specified period, including a period measured by the life of an
16individual.
SB384,243 17Section 243. 701.20 (4j) of the statutes is renumbered 701.1107, and 701.1107
18(1) and (2) (a), (e), (f) 2., (g) and (h), as renumbered, are amended to read:
SB384,144,2419 701.1107 (1) In this subsection section, "express unitrust" means any trust that
20by its governing trust instrument requires the distribution at least annually of a
21unitrust amount equal to a fixed percentage of the net fair market value of the trust's
22assets, valued at least annually, other than a trust solely for charitable purposes or
23a charitable split-interest trust under section 664 (d) or 170 (f) (2) (B) of the Internal
24Revenue Code.
SB384,145,5
1(2) (a) To the extent not otherwise provided for in the governing trust
2instrument, the unitrust amount of not less than 3 percent nor more than 5 percent
3may be determined by reference to the net fair market value of the trust's assets
4averaged over a preceding period determined by the trustee, which is at least 3 years
5but not more than 5 years.
SB384,145,96 (e) The governing trust instrument may grant discretion to the trustee to adopt
7a consistent practice of treating capital gains as part of the unitrust distribution, to
8the extent that the unitrust distribution exceeds the income determined as if the
9trust were not a unitrust, or it may specify the ordering of such classes of income.
SB384,145,1110 (f) 2. Ordinary income for federal income tax purposes that is not net income
11under subd. 6. a. 1.
SB384,145,1512 (g) The trust document instrument may provide that assets used by the trust
13beneficiary, such as a residence or tangible personal property, may be excluded from
14the net fair market value for computing the unitrust amount. Such use may be
15considered equivalent to the income or unitrust amount.
SB384,145,1816 (h) In the absence of contrary provisions in the governing document trust
17instrument
of an express unitrust, the provisions of sub. (4g) (c) 1., 4. s. 701.1106 (3)
18(a), (d)
, and 5. (e) apply.
SB384,244 19Section 244. 701.20 (4k) of the statutes is renumbered 701.1108 and amended
20to read:
SB384,146,2 21701.1108 Power to treat capital gains as part of a distribution. Unless
22prohibited by the governing instrument will or trust instrument, a trustee fiduciary
23may cause gains from the sale or exchange of estate or trust assets property, as
24determined for federal income tax purposes, to be taxed for federal income tax
25purposes as part of a distribution of income that has been increased by an adjustment

1from principal to income under sub. (4) s. 701.1104, of a unitrust distribution, of a
2fixed annuity distribution, or of a principal distribution to a beneficiary.
SB384,245 3Section 245. 701.20 (4m) (title) of the statutes is renumbered 701.1109 (title).
SB384,246 4Section 246. 701.20 (4m) (a) of the statutes is renumbered 701.1109 (1) and
5amended to read:
SB384,146,116 701.1109 (1) Nothing in this section subchapter creates a duty to make an
7adjustment under sub. (4) s. 701.1104 or to convert a trust to a unitrust under sub.
8(4g)
s. 701.1106. Unless it determines that the decision to make an adjustment or
9to convert to a unitrust was an abuse of the fiduciary's discretion, a court may not
10grant relief from any decision a fiduciary makes regarding the exercise of a
11discretionary power conferred by sub. (4) s. 701.1104 or (4g) 701.1106.
SB384,247 12Section 247. 701.20 (4m) (am) of the statutes is renumbered 701.1109 (2) and
13amended to read:
SB384,146,1814 701.1109 (2) An action taken under sub. (4) s. 701.1104 or (4g) 701.1106 is not
15an abuse of a fiduciary's discretion if the fiduciary gave written notice of the proposed
16action under sub. (4c) s. 701.1105 and did not receive a timely written objection to
17the notice. It is not an abuse of discretion not to exercise the power to adjust under
18sub. (4) s. 701.1104 or to convert under sub. (4g) s. 701.1106.
SB384,248 19Section 248. 701.20 (4m) (b) of the statutes is renumbered 701.1109 (3).
SB384,249 20Section 249. 701.20 (4m) (c) of the statutes is renumbered 701.1109 (4), and
21701.1109 (4) (c), as renumbered, is amended to read:
SB384,147,222 701.1109 (4) (c) To the extent that the court is unable, after applying subds. 1.
23pars. (a) and 2. (b), to place the beneficiaries, the trust, or both in the positions that
24they would have occupied had the discretion not been abused, the court may order

1the fiduciary to pay an appropriate amount from its own funds to one or more of the
2beneficiaries, the trust, or both.
SB384,250 3Section 250. 701.20 (4m) (d) of the statutes is renumbered 701.1109 (5).
SB384,251 4Section 251. 701.20 (5) of the statutes is renumbered 701.1110, and 701.1110
5(1), (2) (intro.), (3), (4) and (5), as renumbered, are amended to read:
SB384,147,116 701.1110 (1) A fiduciary of an estate or of a terminating income interest shall
7determine the amount of net income and net principal receipts received from
8property specifically given to a beneficiary under the rules in subs. (7) ss. 701.1112
9to (30) 701.1135 that apply to trustees and the rules in par. (e) sub. (5). The fiduciary
10shall distribute the net income and net principal receipts to the beneficiary who is
11to receive the specific property.
SB384,147,14 12(2) (intro.) A fiduciary shall determine the remaining net income of a decedent's
13estate or a terminating income interest under the rules in subs. (7) ss. 701.1112 to
14(30) 701.1135 that apply to trustees and by:
SB384,147,24 15(3) A fiduciary shall distribute to a beneficiary, including a trustee, who
16receives a pecuniary amount not determined by a pecuniary formula related to a
17transfer tax
interest at the legal rate set forth in s. 138.04 on any unpaid portion of
18the pecuniary amount for the period commencing one year after the decedent's death
19or after the income interest in the trust ends. The interest under this paragraph
20subsection shall be distributed from net income determined under par. (b) sub. (2) or
21from principal to the extent that net income is insufficient. For purposes of this
22paragraph subsection, the deferred marital property elective share amount elected
23by a surviving spouse under s. 861.02 (1) is a bequest of a specific pecuniary amount
24of money not determined by a pecuniary formula related to a transfer tax.
SB384,148,4
1(4) A fiduciary shall distribute the net income remaining after distributions
2required by par. (c) under subs. (1) to (3) in the manner described in sub. (6) s.
3701.1111
to all other beneficiaries, including a beneficiary who receives a pecuniary
4amount determined by a pecuniary formula related to a transfer tax.
SB384,148,16 5(5) A fiduciary may not reduce principal or income receipts from property
6described in par. (a) sub. (1) because of a payment described in sub. (25) s. 701.1130
7or (26) 701.1131 to the extent that the will, the terms of the trust, or applicable law
8requires the fiduciary to make the payment from assets other than the property or
9to the extent that the fiduciary recovers or expects to recover the payment from a 3rd
10party. The net income and principal receipts from the property are determined by
11including all of the amounts the fiduciary receives or pays with respect to the
12property, whether those amounts accrued or became due before, on, or after the date
13of a decedent's death or an income interest's terminating event, and by making a
14reasonable provision for amounts that the fiduciary believes the estate or
15terminating income interest may become obligated to pay after the property is
16distributed.
SB384,252 17Section 252. 701.20 (6) of the statutes is renumbered 701.1111, and 701.1111
18(1), (2) (d) and (4), as renumbered, are amended to read:
SB384,149,219 701.1111 (1) Each beneficiary described in sub. (5) (d) s. 701.1110 (4) is entitled
20to receive a portion of the net income equal to the beneficiary's fractional interest in
21undistributed principal assets, using values as of the distribution date. If a fiduciary
22makes more than one distribution of assets to beneficiaries to whom this subsection
23section applies, each beneficiary, including one who does not receive part of the
24distribution, is entitled, as of each distribution date, to the net income the fiduciary

1has received after the date of death or terminating event or earlier distribution date
2but has not distributed as of the current distribution date.
SB384,149,5 3(2) (d) The distribution date for purposes of this subsection section may be the
4date as of which the fiduciary calculates the value of the assets if that date is
5reasonably near the date on which assets are actually distributed.
SB384,149,9 6(4) A trustee may apply the rules in this subsection section, to the extent that
7the trustee considers it appropriate, to net gain or loss realized after the date of death
8or terminating event or earlier distribution date from the disposition of a principal
9asset if this subsection section applies to the income from the asset.
SB384,253 10Section 253. 701.20 (7) of the statutes is renumbered 701.1112, and 701.1112
11(3), as renumbered, is amended to read:
SB384,149,1512 701.1112 (3) An asset becomes subject to a successive income interest on the
13day after the preceding income interest ends, as determined under par. (d) sub. (4),
14even if there is an intervening period of administration to wind up the preceding
15income interest.
SB384,254 16Section 254. 701.20 (8) of the statutes is renumbered 701.1113, and 701.1113
17(1) and (3), as renumbered, are amended to read:
SB384,149,2118 701.1113 (1) A trustee shall allocate to principal an income receipt or
19disbursement other than one to which sub. (5) (a) s. 701.1110 (1) applies if its due date
20occurs before a decedent dies in the case of an estate or before an income interest
21begins in the case of a trust or successive income interest.
SB384,150,4 22(3) An item of income or an obligation is due on the date the payer is required
23to make a payment. If a payment date is not stated, there is no due date for the
24purposes of this section. Distributions to shareholders or other owners from an
25entity, as defined in sub. (10) s. 701.1115, are due on the date fixed by the entity for

1determining who is entitled to receive the distribution or, if no date is fixed, on the
2declaration date for the distribution. A due date is periodic for receipts or
3disbursements that must be paid at regular intervals under a lease or an obligation
4to pay interest or if an entity customarily makes distributions at regular intervals.
SB384,255 5Section 255. 701.20 (9) (a) of the statutes is renumbered 701.1114, and
6701.1114 (1), as renumbered, is amended to read:
SB384,150,11 7701.1114 (1) In this subsection section, "undistributed income" means net
8income received before the date on which an income interest ends. "Undistributed
9income" does not include an item of income or expense that is due or accrued or net
10income that has been added or is required to be added to principal under the terms
11of the trust.
SB384,256 12Section 256. 701.20 (10) of the statutes is renumbered 701.1115, and 701.1115
13(1), (2) and (5), as renumbered, is amended to read:
SB384,150,1914 701.1115 (1) In this subsection section, "entity" means a corporation,
15partnership, limited liability company, regulated investment company, real estate
16investment trust, common trust fund, or any other organization in which a trustee
17has an interest other than a trust or estate to which sub. (11) s. 701.1116 applies, a
18business or activity to which sub. (12) s. 701.1117 applies, or an asset-backed
19security to which sub. (24) s. 701.1129 applies.
SB384,150,21 20(2) Except as otherwise provided in this subsection section, a trustee shall
21allocate to income money received from an entity.
SB384,150,25 22(5) Money is not received in partial liquidation, nor may it be taken into account
23under par. (d) 2. sub. (4) (b), to the extent that it does not exceed the amount of income
24tax that a trustee or beneficiary must pay on taxable income of the entity that
25distributes the money.
SB384,257
1Section 257. 701.20 (11) of the statutes is renumbered 701.1116 and amended
2to read:
SB384,151,9 3701.1116 Distribution from trust or estate. A trustee shall allocate to
4income an amount received as a distribution of income from a trust or an estate in
5which the trust has an interest other than a purchased interest, and shall allocate
6to principal an amount received as a distribution of principal from such a trust or
7estate. If a trustee purchases an interest in a trust that is an investment entity, or
8a decedent or donor transfers an interest in such a trust to a trustee, sub. (10) s.
9701.1115
or (24) 701.1129 applies to a receipt from the trust.
SB384,258 10Section 258. 701.20 (12) of the statutes is renumbered 701.1117 and 701.1117
11(3) (g), as renumbered, is amended to read:
SB384,151,1212 701.1117 (3) (g) Activities to which sub. (23) s. 701.1128 applies.
SB384,259 13Section 259. 701.20 (13) of the statutes is renumbered 701.1118, and 701.1118
14(1), (2), (3) and (6), as renumbered, are amended to read:
SB384,151,1815 701.1118 (1) To the extent not allocated to income under this section
16subchapter, assets received from a transferor during the transferor's lifetime, a
17decedent's estate, a trust with a terminating income interest, or a payer under a
18contract naming the trust or its trustee as beneficiary.
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