701.1134(1)(1) A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.
701.1134(2)
(2) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income tax by the taxing authority.
701.1134(3)
(3) A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid as follows:
701.1134(3)(a)
(a) From income to the extent that receipts from the entity are allocated only to income.
701.1134(3)(b)
(b) From principal to the extent that receipts from the entity are allocated only to principal.
701.1134(3)(c)
(c) Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal.
701.1134(3)(d)
(d) From principal to the extent that the tax exceeds the total receipts from the entity.
701.1134(4)
(4) After applying
subs. (1) to
(3), the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.
701.1134 History
History: 2013 a. 92 ss.
185,
282 to
287.
701.1135
701.1135
Adjustments between principal and income because of taxes. 701.1135(1)(1) A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from:
701.1135(1)(a)
(a) Elections and decisions, other than those described in
sub. (2), that the fiduciary makes from time to time regarding tax matters.
701.1135(1)(b)
(b) An income tax or any other tax that is imposed upon the fiduciary or a beneficiary as a result of a transaction involving or a distribution from the estate or trust.
701.1135(1)(c)
(c) The ownership by an estate or trust of an interest in an entity whose taxable income, whether or not distributed, is includable in the taxable income of the estate or trust or of a beneficiary.
701.1135(2)
(2) If the amount of an estate tax marital deduction or charitable contribution deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes, and as a result estate taxes paid from principal are increased and income taxes paid by an estate, trust, or beneficiary are decreased, each estate, trust, or beneficiary that benefits from the decrease in income tax shall reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax to the extent that the principal used to pay the increase would have qualified for a marital deduction or charitable contribution deduction but for the payment. The proportionate share of the reimbursement for each estate, trust, or beneficiary whose income taxes are reduced must be the same as its proportionate share of the total decrease in income tax. An estate or trust shall reimburse principal from income.
701.1135 History
History: 2013 a. 92 s.
290.
701.1136
701.1136
Income payments and accumulations. 701.1136(1)(1)
Distribution of income. Except as otherwise determined by the trustee or a court under
s. 701.1106 with respect to unitrust distributions, if a beneficiary is entitled to receive income from a trust, but the trust instrument fails to specify how frequently it is to be paid, the trustee shall distribute at least annually the income to which such beneficiary is entitled.
701.1136(2)
(2) Permitted accumulations. No provision directing or authorizing accumulation of income is invalid.
701.1136(3)
(3) Charitable trust accumulations. A trust containing a direction or authorization to accumulate income from property devoted to a charitable purpose shall be subject to the general equitable supervision of the court with respect to any such accumulation of income, including its reasonableness, amount and duration.
701.1136(4)
(4) Disposition of accumulated income. Income not required to be distributed by the trust instrument may, in the trustee's discretion, be held in reserve for future distribution as income or be added to principal subject to retransfer to income of the dollar amount originally transferred to principal. At the termination of the income interest, any undistributed income shall be distributed as principal.
701.1136 History
History: 2005 a. 10;
2013 a. 92 s.
292; Stats. 2013 s. 701.1136.
MISCELLANEOUS PROVISIONS
701.1201(1)(a)(a) In the administration of any trust that is a private foundation, as defined in section
509 of the Internal Revenue Code, a charitable trust, as described in section
4947 (a) (1) of the Internal Revenue Code, or a split-interest trust as described in section
4947 (a) (2) of the Internal Revenue Code, all of the following acts shall be prohibited:
701.1201(1)(a)1.
1. Engaging in any act of self-dealing, as defined in section
4941 (d) of the Internal Revenue Code, that would give rise to any liability for the tax imposed by section
4941 (a) of the Internal Revenue Code.
701.1201(1)(a)2.
2. Retaining any excess business holdings, as defined in section
4943 (c) of the Internal Revenue Code, that would give rise to any liability for the tax imposed by section
4943 (a) of the Internal Revenue Code.
701.1201(1)(a)3.
3. Making any investments that would jeopardize the carrying out of any of the exempt purposes of the trust, within the meaning of section
4944 of the Internal Revenue Code, so as to give rise to any liability for the tax imposed by section
4944 (a) of the Internal Revenue Code.
701.1201(1)(a)4.
4. Making any taxable expenditures, as defined in section
4945 (d) of the Internal Revenue Code, that would give rise to any liability for the tax imposed by section
4945 (a) of the Internal Revenue Code.
701.1201(1)(b)
(b) This subsection does not apply either to those split-interest trusts or to amounts thereof that are not subject to the prohibitions applicable to private foundations by reason of the provisions of section
4947 of the Internal Revenue Code.
701.1201(2)
(2) In the administration of any trust that is a private foundation, as defined in section
509 of the Internal Revenue Code, or that is a charitable trust, as described in section
4947 (a) (1) of the Internal Revenue Code, there shall be distributed, for the purposes specified in the trust instrument, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by section
4942 (a) of the Internal Revenue Code.
701.1201(3)
(3) Subsections (1) and
(2) do not apply to any trust to the extent that a court of competent jurisdiction determines that the application would be contrary to the terms of the trust and that the same may not properly be changed to conform to such subsections.
701.1201 History
History: 1971 c. 66;
1991 a. 39;
2013 a. 92 ss.
174,
175; Stats. 2013 s. 701.1201.
701.1202
701.1202
Electronic records and signatures. The provisions of this chapter governing the legal effect, validity, or enforceability of electronic records or signatures, and of contracts formed or performed with the use of such records or signatures conform to the requirements of section 102 of the federal Electronic Signatures in Global and National Commerce Act,
15 USC 7002, and supersede, modify, and limit the federal Electronic Signatures in Global and National Commerce Act,
15 USC 7001 to
7031.
701.1202 History
History: 2013 a. 92.
701.1203
701.1203
Uniformity of application and construction. This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.
701.1203 History
History: 2013 a. 92.
701.1204
701.1204
Applicability of general transfers at death provisions. Chapter 854 applies to transfers at death under trust instruments.
701.1204 History
History: 1997 a. 188;
2013 a. 92 s.
300; Stats. 2013 s. 701.1204.
701.1204 Annotation
Wisconsin's New Probate Code. Erlanger. Wis. Law. Oct. 1998.
701.1205(1)(1) Except as otherwise provided in
sub. (2) and
ss. 701.0602,
701.0813, and
701.0903 (4), this chapter is applicable to a trust existing on July 1, 2014, as well as a trust created after such date, and shall govern trustees acting under such trusts. If application of any provision of this chapter to a trust in existence on July 1, 2014, is unconstitutional, it shall not affect application of the provision to a trust created after that date.
701.1205(2)
(2) Subchapter XI of this chapter applies to a trust or decedent's estate existing on July 1, 2014, and to a trust or decedent's estate created or coming into existence after that date, except as otherwise expressly provided in
subch. XI or by the decedent's will or the terms of the trust. With respect to a trust or decedent's estate existing on July 1, 2014,
ss. 701.1110 to
701.1135 shall apply at the beginning of the trust's or estate's first accounting period, as defined in
s. 701.1102 (1), that begins on or after July 1, 2014.
701.1205(3)(a)(a) Except as provided in
par. (b), this chapter applies to a judicial proceeding concerning a trust commenced before, on, or after July 1, 2014.
701.1205(3)(b)
(b) If a court finds that application of a particular provision of this chapter to a judicial proceeding commenced before July 1, 2014, will substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, the particular provision of this chapter does not apply to that judicial proceeding and the court shall apply ch.
701, 2011 stats., as the court finds to be necessary to prevent interference with the effective conduct of the judicial proceeding and to avoid prejudicing the rights of the parties.
701.1205 History
History: 1971 c. 66;
1977 c. 309;
2005 a. 10,
216;
2013 a. 92 ss.
191,
296 to
298; Stats. 2013 s. 701.1205;
2013 a. 151.
