SB384,281 6Section 281. 701.20 (28) of the statutes is renumbered 701.1133, and 701.1133
7(1), (2) (intro.) and (e) and (3), as renumbered, are amended to read:
SB384,160,118 701.1133 (1) If a trustee makes or expects to make a principal disbursement
9described in this subsection section, the trustee may transfer an appropriate amount
10from income to principal in one or more accounting periods to reimburse principal
11or to provide a reserve for future principal disbursements.
SB384,160,14 12(2) (intro.) Principal disbursements to which par. (a) sub. (1) applies include the
13following, but only to the extent that the trustee has not been and does not expect
14to be reimbursed by a 3rd party:
SB384,160,1515 (e) Disbursements described in sub. (26) (a) 7. s. 701.1131 (1) (g).
SB384,160,18 16(3) If the asset whose ownership gives rise to the disbursements becomes
17subject to a successive income interest after an income interest ends, a trustee may
18continue to transfer amounts from income to principal as provided in par. (a) sub. (1).
SB384,282 19Section 282. 701.20 (29) (title) of the statutes is renumbered 701.1134 (title).
SB384,283 20Section 283. 701.20 (29) (a) of the statutes is renumbered 701.1134 (1).
SB384,284 21Section 284. 701.20 (29) (b) of the statutes is renumbered 701.1134 (2).
SB384,285 22Section 285. 701.20 (29) (c) (intro.) of the statutes is renumbered 701.1134 (3)
23(intro.) and amended to read:
SB384,160,2524 701.1134 (3) (intro.) A tax required to be paid by a trustee on the trust's share
25of an entity's taxable income must be paid proportionately as follows:
SB384,286
1Section 286. 701.20 (29) (c) 1. of the statutes is renumbered 701.1134 (3) (a)
2and amended to read:
SB384,161,43 701.1134 (3) (a) From income to the extent that receipts from the entity are
4allocated only to income.
SB384,287 5Section 287. 701.20 (29) (c) 2. (intro.) and a. of the statutes are consolidated,
6renumbered 701.1134 (3) (b) and amended to read:
SB384,161,87 701.1134 (3) (b) From principal to the extent that : 2. a. Receipts receipts from
8the entity are allocated only to principal.
SB384,288 9Section 288. 701.20 (29) (c) 2. b. of the statutes is repealed.
SB384,289 10Section 289. 701.20 (29) (d) of the statutes is repealed.
SB384,290 11Section 290. 701.20 (30) of the statutes is renumbered 701.1135, and 701.1135
12(1) (a), as renumbered, is amended to read:
SB384,161,1413 701.1135 (1) (a) Elections and decisions, other than those described in par. (b)
14sub. (2), that the fiduciary makes from time to time regarding tax matters.
SB384,291 15Section 291. 701.20 (31) of the statutes is repealed.
SB384,292 16Section 292. 701.21 of the statutes is renumbered 701.1136, and 701.1136 (1),
17(2) and (4), as renumbered, are amended to read:
SB384,161,2218 701.1136 (1) Distribution of income. Except as otherwise determined by the
19trustee or a court under s. 701.20 (4g) 701.1106 with respect to unitrust distributions,
20if a beneficiary is entitled to receive income from a trust, but the creating trust
21instrument fails to specify how frequently it is to be paid, the trustee shall distribute
22at least annually the income to which such beneficiary is entitled.
SB384,161,24 23(2) Permitted accumulations. No provision directing or authorizing
24accumulation of trust income shall be is invalid.
SB384,162,6
1(4) Disposition of accumulated income. Income not required to be distributed
2by the creating trust instrument, in the absence of a governing provision in the
3instrument,
may, in the trustee's discretion, be held in reserve for future distribution
4as income or be added to principal subject to retransfer to income of the dollar amount
5originally transferred to principal; but at. At the termination of the income interest,
6any undistributed income shall be distributed as principal.
SB384,293 7Section 293. 701.22 (title) of the statutes is repealed.
SB384,294 8Section 294. 701.22 of the statutes is renumbered 701.0417 (4) and amended
9to read:
SB384,162,2110 701.0417 (4) In case of a division of a trust assets into 2 or more trusts or shares,
11any distribution or allocation of assets as an equivalent of a dollar amount fixed by
12formula or otherwise shall be made at current fair market values unless the
13governing trust instrument expressly provided that another value may be used. If
14the governing trust instrument requires or permits a different value to be used, all
15assets property available for distribution, including cash, shall, unless otherwise
16expressly provided,
be so distributed so that the assets property, including cash,
17distributed as such an equivalent will be is fairly representative of the net
18appreciation or depreciation in the value of the available property on the date or
19dates of distribution. A provision in the governing trust instrument that the trustee
20may fix values for purposes of distribution or allocation does not of itself constitute
21authorization to fix a value other than current fair market value.
SB384,295 22Section 295. 701.23 of the statutes is repealed.
SB384,296 23Section 296. 701.24 (title) of the statutes is renumbered 701.1205 (title).
SB384,297 24Section 297. 701.24 (1) of the statutes is renumbered 701.1205 (1) and
25amended to read:
SB384,163,9
1701.1205 (1) Except as otherwise provided in sub. (3) (2) and s. 701.19 (9) (a),
2ss. 701.01 to 701.19, 701.21, 701.22, and 701.23 are
ss. 701.0602, 701.0813, and
3701.0903 (4), this chapter is
applicable to a trust existing on July 1, 1971 the effective
4date of this subsection .... [LRB inserts date]
, as well as a trust created after such
5date, and shall govern trustees acting under such trusts. If application of any
6provision of ss. 701.01 to 701.19, 701.21, 701.22, and 701.23 this chapter to a trust
7in existence on August 1, 1971 the effective date of this subsection .... [LRB inserts
8date]
, is unconstitutional, it shall not affect application of the provision to a trust
9created after that date.
SB384,298 10Section 298. 701.24 (2) of the statutes is renumbered 701.1205 (2) and
11amended to read:
SB384,163,2112 701.1205 (2) Section 701.20 Subchapter XI of this chapter applies to every a
13trust or decedent's estate existing on May 17, 2005 the effective date of this
14subsection .... [LRB inserts date]
, and to every a trust or decedent's estate created or
15coming into existence after that date, except as otherwise expressly provided in s.
16701.20
subch. XI or by the decedent's will or the terms of the trust. With respect to
17a trust or decedent's estate existing on May 17, 2005, s. 701.20 (5) to (30) the effective
18date of this subsection .... [LRB inserts date], ss. 701.1110 to 701.1135
shall apply at
19the beginning of the trust's or estate's first accounting period, as defined in s. 701.20
20701.1125 (2) (a), that begins on or after May 17, 2005 the effective date of this
21subsection .... [LRB inserts date]
.
SB384,299 22Section 299. 701.24 (3) of the statutes is repealed.
SB384,300 23Section 300. 701.25 of the statutes is renumbered 701.1204.
SB384,301 24Section 301. 701.26 of the statutes is repealed.
SB384,302 25Section 302. 702.01 (intro.) of the statutes is renumbered 702.02 (intro.).
SB384,303
1Section 303. 702.01 (1) of the statutes is renumbered 702.02 (2) and amended
2to read:
SB384,164,43 702.02 (2) "Creating instrument" means the will, trust agreement, or other
4document which creates or reserves the power of appointment.
SB384,304 5Section 304. 702.01 (2) of the statutes is renumbered 702.02 (4) and amended
6to read:
SB384,164,97 702.02 (4) "Donor" means the person who creates or reserves the power;
8"donee" means the person in whom the power is created or reserved; and "appointee"
9means the person to whom an interest is appointed
of appointment.
SB384,305 10Section 305. 702.01 (3) of the statutes is renumbered 702.02 (5) and amended
11to read:
SB384,164,1812 702.02 (5) "General power of appointment" means a power exercisable in favor
13of the donee, the donee's estate, the donee's creditors, or the creditors of the donee's
14estate, whether or not it is also exercisable in favor of others. A power to appoint to
15any person or a power which of appointment that is not expressly restricted as to
16appointees may be exercised in favor of the donee or the donee's creditors if
17exercisable during lifetime, and in favor of the donee's estate or the creditors of the
18donee's estate if exercisable by will.
SB384,306 19Section 306. 702.01 (4) of the statutes is renumbered 702.02 (6) and amended
20to read:
SB384,165,521 702.02 (6) "Power of appointment" means a power of appointment over to
22appoint
legal or equitable interests in real or personal property. A power of
23appointment is a power created or reserved by a person having property subject to
24his or her disposition which enables the donee of the power of appointment to
25designate, within such limits as may be prescribed, the transferees of the property

1or the shares or the interests in which it shall be received ; it. A power of appointment
2does not include a power of sale, a power of attorney, a power of revocation, or a power
3exercisable by a trustee or other, a directing party, as defined in s. 701.0103 (7),
4another
fiduciary in his or her fiduciary capacity, or a trust protector, as defined in
5s. 701.0103 (31)
.
SB384,307 6Section 307. 702.01 (5) of the statutes is renumbered 702.02 (7) and amended
7to read:
SB384,165,148 702.02 (7) "Special power of appointment" means a power of appointment
9exercisable only in favor of one or more persons not including the donee, the donee's
10estate, the donee's creditors or the creditors of the donee's estate and, when
11exercisable in favor of a class, so limited in size by description of the class that in the
12event of nonexercise of the power a court can make distribution to persons within the
13class if the donor has failed to provide for this contingency
that is not a general power
14of appointment
.
SB384,308 15Section 308. 702.01 (6) of the statutes is repealed.
SB384,309 16Section 309. 702.02 (1) of the statutes is created to read:
SB384,165,1717 702.02 (1) "Appointee" means the person to whom an interest is appointed.
SB384,310 18Section 310. 702.02 (3) of the statutes is created to read:
SB384,165,2019 702.02 (3) "Donee" means the person in whom the power of appointment is
20created or reserved.
SB384,311 21Section 311. 702.03 of the statutes is amended to read:
SB384,166,5 22702.03 Manifestation of intent to exercise powers a power of
23appointment
. (1) Unless the person who executed it had a contrary intention, if
24a governing creating instrument, as defined in s. 854.01 (2), or an inter vivos
25governing instrument, as defined in s. 700.27 (1) (c),
creates a power of appointment

1that expressly requires that the power of appointment be exercised by any type of
2reference to the power of appointment or its source, the donor's intention in requiring
3the reference is presumed to be to prevent an inadvertent exercise of the power of
4appointment
. Extrinsic evidence, as defined in s. 854.01 (1), may be used to construe
5the intent.
SB384,166,19 6(2) In the case of other powers, an of appointment, a creating instrument
7manifests an intent to exercise the power of appointment if the creating instrument
8purports to transfer an interest in the appointive property which the donee would
9have no power to transfer except by virtue of the power of appointment, even though
10the power of appointment is not recited or referred to in the creating instrument, or
11if the creating instrument either expressly or by necessary implication from its
12wording interpreted in light of the circumstances surrounding its drafting and
13execution manifests an intent to exercise the power of appointment. If there is a
14general power of appointment exercisable by will with no gift in default in the
15creating instrument, a residuary clause or other general language in the donee's will
16purporting to dispose of all of the donee's estate or property operates to exercise the
17power of appointment in favor of the donee's estate, but in all other cases such a
18clause or language does not in itself manifest an intent to exercise a power of
19appointment
exercisable by will.
SB384,312 20Section 312. 702.05 of the statutes is amended to read:
SB384,166,24 21702.05 Exercise of powers a power of appointment. (1) Capacity to
22exercise
a power of appointment. A power of appointment can be exercised only by
23a person who would have the capacity to transfer the property covered by the power
24of appointment.
SB384,167,8
1(2) Kind of instrument and formalities of execution. A donee can exercise
2a power of appointment only by an instrument which meets the intent of the donor
3as to kind of instrument and formalities of execution. If the power of appointment
4is exercisable by will, this means a will executed with the formalities necessary for
5a valid will. A written instrument signed by the donee is sufficient if the donor fails
6to require any additional formalities or fails to indicate a will, but if the power of
7appointment
is to appoint interests in land, it can be exercised only by an instrument
8executed with sufficient formalities for that purpose.
SB384,167,16 9(3) Consent of 3rd persons. When the consent of the donor or of any other
10person is required by the donor for the exercise of a power of appointment, such
11consent must be expressed in the creating instrument exercising the power of
12appointment
or in a separate written instrument, signed in either case by the
13persons whose consent is required. If any person whose consent is required dies or
14becomes legally incapable of consenting, the power of appointment may be exercised
15by the donee without the consent of that person unless the donor has manifested a
16contrary intent in the creating instrument creating the power.
SB384,167,22 17(4) Power of appointment vested in 2 or more donees. Unless the donor
18manifests a contrary intent, when a power of appointment is vested in 2 or more
19persons, all must unite in its exercise, but if one or more of the donees dies, becomes
20incapable of exercising the power of appointment, or renounces, releases, or
21disclaims the power of appointment, the power of appointment may be exercised by
22the others.
SB384,313 23Section 313. 702.05 (5) of the statutes is created to read:
SB384,168,424 702.05 (5) Presumption of nonexercise of a power of appointment. A personal
25representative, trustee, or other fiduciary who holds property subject to a power of

1appointment may administer that property as if the power of appointment was not
2exercised if the personal representative, trustee, or other fiduciary has no notice of
3the existence of any of the following within 6 months after the death of the donee of
4the power of appointment:
SB384,168,65 (a) A document purporting to be a will of the donee of the power of appointment
6if the power of appointment is exercisable by a will.
SB384,168,87 (b) Some other documentation of the donee purporting to exercise the power of
8appointment if the power of appointment is exercisable other than by a will.
SB384,314 9Section 314. 702.07 of the statutes is amended to read:
SB384,168,15 10702.07 Powers Power of appointment to be construed as exclusive. The
11donee of any power of appointment may appoint the whole or any part of the
12appointive assets to any one or more of the permissible appointees and exclude
13others, except to the extent that the donor specifies either a minimum share or
14amount to be appointed to each permissible appointee or to designated appointees,
15or a maximum share or amount appointable to any one or more appointees.
SB384,315 16Section 315. 702.08 of the statutes is amended to read:
SB384,168,19 17702.08 Disclaimer of powers a power of appointment. The donee of any
18power of appointment may disclaim all or part of the power of appointment as
19provided under s. 700.27 or 854.13.
SB384,316 20Section 316. 702.09 (title), (1) and (3) (a), (b) and (c) of the statutes are
21amended to read:
SB384,168,25 22702.09 (title) Release of powers a power of appointment. (1) Except as
23Unless the creating instrument expressly provides that the power of appointment
24cannot be released or expressly restricts the time, manner, or scope of release, the
25donee of any power of appointment may do any of the following:
SB384,169,1
1(a) At any time completely release the donee's power; of appointment.
SB384,169,32 (b) At any time or times release the donee's power of appointment in any one
3or more of the following respects:
SB384,169,44 1. As to the whole or any part of the property which is subject thereto ;.
SB384,169,65 2. As to any one or more persons or objects, or classes of persons or objects, in
6whose favor such power of appointment is exercisable ;.
SB384,169,87 3. So as to limit in any other respect the extent to or manner in which it the
8power of appointment
may be exercised.
SB384,169,9 9(3) (a) Delivery to any person specified in the creating instrument;.
SB384,169,1210 (b) Delivery to a trustee or to one of several trustees of the property to which
11the power of appointment relates, or filing with the court having jurisdiction over the
12trust;.
SB384,169,1413 (c) Delivery to any person, other than the donee, who could be adversely
14affected by an exercise of the power; or of appointment.
SB384,317 15Section 317. 702.11 of the statutes is amended to read:
SB384,169,19 16702.11 Irrevocability of creation, exercise and release of powers a
17power of appointment
. The creation, exercise or release of a power of appointment
18is irrevocable unless the power to revoke is reserved in the creation, exercise or
19release of the power of appointment.
SB384,318 20Section 318. 702.13 (title), (1) (intro.), (a), (b) and (c) and (2) of the statutes
21are amended to read:
SB384,169,25 22702.13 (title) Recording instruments relating to powers a power of
23appointment
. (1) (intro.) Any of the following instruments relating to powers a
24power of appointment
is entitled to be recorded as a conveyance upon compliance
25with s. 706.05 (1):
SB384,170,1
1(a) An instrument, other than a will, exercising a power ; of appointment.
SB384,170,22 (b) An instrument expressing consent to exercise;.
SB384,170,33 (c) A disclaimer;.
SB384,170,5 4(2) If a power of appointment is exercised by a will, a certified copy of the will
5and of the certificate of probate thereof may be recorded.
SB384,319 6Section 319. 702.15 (intro.), (1) and (2) of the statutes are amended to read:
SB384,170,10 7702.15 Disposition when a special power of appointment is
8unexercised.
(intro.) If the donee of a special power of appointment fails to exercise
9effectively the special power of appointment, the interests which might have been
10appointed under the special power of appointment pass in one of the following ways:
SB384,170,12 11(1) If the creating instrument contains an express gift in default, then in
12accordance with the terms of such gift;.
SB384,170,18 13(2) If the creating instrument contains no express gift in default and does not
14clearly indicate that the permissible appointees are to take only if the donee exercises
15the special power of appointment, then to the permissible appointees equally, but if
16the special power of appointment is to appoint among a class such as "relatives,"
17"issue," or "heirs," then to those persons who would have taken had there been an
18express gift to the described class; or.
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