AB490: Bill Text

AB490,165,5 702.02 (6) "Power of appointment" means a power of appointment over to appoint legal or equitable interests in real or personal property. A power of appointment is a power created or reserved by a person having property subject to his or her disposition which enables the donee of the power of appointment to designate, within such limits as may be prescribed, the transferees of the property or the shares or the interests in which it shall be received ; it. A power of appointment does not include a power of sale, a power of attorney, a power of revocation, or a power exercisable by a trustee or other, a directing party, as defined in s. 701.0103 (7), another fiduciary in his or her fiduciary capacity, or a trust protector, as defined in s. 701.0103 (31).

AB490,307 Section 307. 702.01 (5) of the statutes is renumbered 702.02 (7) and amended to read:

AB490,165,14 702.02 (7) "Special power of appointment" means a power of appointment exercisable only in favor of one or more persons not including the donee, the donee's estate, the donee's creditors or the creditors of the donee's estate and, when exercisable in favor of a class, so limited in size by description of the class that in the event of nonexercise of the power a court can make distribution to persons within the class if the donor has failed to provide for this contingency that is not a general power of appointment.

AB490,308 Section 308. 702.01 (6) of the statutes is repealed.

AB490,309 Section 309. 702.02 (1) of the statutes is created to read:

AB490,165,17 702.02 (1) "Appointee" means the person to whom an interest is appointed.

AB490,310 Section 310. 702.02 (3) of the statutes is created to read:

AB490,165,20 702.02 (3) "Donee" means the person in whom the power of appointment is created or reserved.

AB490,311 Section 311. 702.03 of the statutes is amended to read:

AB490,166,5 702.03 Manifestation of intent to exercise powers a power of appointment. (1) Unless the person who executed it had a contrary intention, if a governing creating instrument, as defined in s. 854.01 (2), or an inter vivos governing instrument, as defined in s. 700.27 (1) (c), creates a power of appointment that expressly requires that the power of appointment be exercised by any type of reference to the power of appointment or its source, the donor's intention in requiring the reference is presumed to be to prevent an inadvertent exercise of the power of appointment. Extrinsic evidence, as defined in s. 854.01 (1), may be used to construe the intent.

AB490,166,19 (2) In the case of other powers, an of appointment, a creating instrument manifests an intent to exercise the power of appointment if the creating instrument purports to transfer an interest in the appointive property which the donee would have no power to transfer except by virtue of the power of appointment, even though the power of appointment is not recited or referred to in the creating instrument, or if the creating instrument either expressly or by necessary implication from its wording interpreted in light of the circumstances surrounding its drafting and execution manifests an intent to exercise the power of appointment. If there is a general power of appointment exercisable by will with no gift in default in the creating instrument, a residuary clause or other general language in the donee's will purporting to dispose of all of the donee's estate or property operates to exercise the power of appointment in favor of the donee's estate, but in all other cases such a clause or language does not in itself manifest an intent to exercise a power of appointment exercisable by will.

AB490,312 Section 312. 702.05 of the statutes is amended to read:

AB490,166,24 702.05 Exercise of powers a power of appointment. (1) Capacity to exercise a power of appointment. A power of appointment can be exercised only by a person who would have the capacity to transfer the property covered by the power of appointment.

AB490,167,8 (2) Kind of instrument and formalities of execution. A donee can exercise a power of appointment only by an instrument which meets the intent of the donor as to kind of instrument and formalities of execution. If the power of appointment is exercisable by will, this means a will executed with the formalities necessary for a valid will. A written instrument signed by the donee is sufficient if the donor fails to require any additional formalities or fails to indicate a will, but if the power of appointment is to appoint interests in land, it can be exercised only by an instrument executed with sufficient formalities for that purpose.

AB490,167,16 (3) Consent of 3rd persons. When the consent of the donor or of any other person is required by the donor for the exercise of a power of appointment, such consent must be expressed in the creating instrument exercising the power of appointment or in a separate written instrument, signed in either case by the persons whose consent is required. If any person whose consent is required dies or becomes legally incapable of consenting, the power of appointment may be exercised by the donee without the consent of that person unless the donor has manifested a contrary intent in the creating instrument creating the power.

AB490,167,22 (4) Power of appointment vested in 2 or more donees. Unless the donor manifests a contrary intent, when a power of appointment is vested in 2 or more persons, all must unite in its exercise, but if one or more of the donees dies, becomes incapable of exercising the power of appointment, or renounces, releases, or disclaims the power of appointment, the power of appointment may be exercised by the others.

AB490,313 Section 313. 702.05 (5) of the statutes is created to read:

AB490,168,4 702.05 (5) Presumption of nonexercise of a power of appointment. A personal representative, trustee, or other fiduciary who holds property subject to a power of appointment may administer that property as if the power of appointment was not exercised if the personal representative, trustee, or other fiduciary has no notice of the existence of any of the following within 6 months after the death of the donee of the power of appointment:

AB490,168,6 (a) A document purporting to be a will of the donee of the power of appointment if the power of appointment is exercisable by a will.

AB490,168,8 (b) Some other documentation of the donee purporting to exercise the power of appointment if the power of appointment is exercisable other than by a will.

AB490,314 Section 314. 702.07 of the statutes is amended to read:

AB490,168,15 702.07 Powers Power of appointment to be construed as exclusive. The donee of any power of appointment may appoint the whole or any part of the appointive assets to any one or more of the permissible appointees and exclude others, except to the extent that the donor specifies either a minimum share or amount to be appointed to each permissible appointee or to designated appointees, or a maximum share or amount appointable to any one or more appointees.

AB490,315 Section 315. 702.08 of the statutes is amended to read:

AB490,168,19 702.08 Disclaimer of powers a power of appointment. The donee of any power of appointment may disclaim all or part of the power of appointment as provided under s. 700.27 or 854.13.

AB490,316 Section 316. 702.09 (title), (1) and (3) (a), (b) and (c) of the statutes are amended to read:

AB490,168,25 702.09 (title) Release of powers a power of appointment. (1) Except as Unless the creating instrument expressly provides that the power of appointment cannot be released or expressly restricts the time, manner, or scope of release, the donee of any power of appointment may do any of the following:

AB490,169,1 (a) At any time completely release the donee's power; of appointment.

AB490,169,3 (b) At any time or times release the donee's power of appointment in any one or more of the following respects:

AB490,169,4 1. As to the whole or any part of the property which is subject thereto ;.

AB490,169,6 2. As to any one or more persons or objects, or classes of persons or objects, in whose favor such power of appointment is exercisable ;.

AB490,169,8 3. So as to limit in any other respect the extent to or manner in which it the power of appointment may be exercised.

AB490,169,9 (3) (a) Delivery to any person specified in the creating instrument;.

AB490,169,12 (b) Delivery to a trustee or to one of several trustees of the property to which the power of appointment relates, or filing with the court having jurisdiction over the trust;.

AB490,169,14 (c) Delivery to any person, other than the donee, who could be adversely affected by an exercise of the power; or of appointment.

AB490,317 Section 317. 702.11 of the statutes is amended to read:

AB490,169,19 702.11 Irrevocability of creation, exercise and release of powers a power of appointment. The creation, exercise or release of a power of appointment is irrevocable unless the power to revoke is reserved in the creation, exercise or release of the power of appointment.

AB490,318 Section 318. 702.13 (title), (1) (intro.), (a), (b) and (c) and (2) of the statutes are amended to read:

AB490,169,25 702.13 (title) Recording instruments relating to powers a power of appointment. (1) (intro.) Any of the following instruments relating to powers a power of appointment is entitled to be recorded as a conveyance upon compliance with s. 706.05 (1):

AB490,170,1 (a) An instrument, other than a will, exercising a power ; of appointment.

AB490,170,2 (b) An instrument expressing consent to exercise;.

AB490,170,3 (c) A disclaimer;.

AB490,170,5 (2) If a power of appointment is exercised by a will, a certified copy of the will and of the certificate of probate thereof may be recorded.

AB490,319 Section 319. 702.15 (intro.), (1) and (2) of the statutes are amended to read:

AB490,170,10 702.15 Disposition when a special power of appointment is unexercised. (intro.) If the donee of a special power of appointment fails to exercise effectively the special power of appointment, the interests which might have been appointed under the special power of appointment pass in one of the following ways:

AB490,170,12 (1) If the creating instrument contains an express gift in default, then in accordance with the terms of such gift;.

AB490,170,18 (2) If the creating instrument contains no express gift in default and does not clearly indicate that the permissible appointees are to take only if the donee exercises the special power of appointment, then to the permissible appointees equally, but if the special power of appointment is to appoint among a class such as "relatives," "issue," or "heirs," then to those persons who would have taken had there been an express gift to the described class; or.

AB490,320 Section 320. 702.15 (3) of the statutes is renumbered 702.15 (3) (a) and amended to read:

AB490,170,24 702.15 (3) (a) If Except as provided in par. (b), if the creating instrument contains no express gift in default and clearly indicates that the permissible appointees are to take only if the donee exercises the special power of appointment, then by reversion to the donor or the donor's estate. But if

AB490,171,5 (b) If the creating instrument expressly states that there is no reversion in the donor, then any language in the creating instrument indicating or stating that the permissible appointees are to take only if the donee exercises the special power of appointment is to be disregarded and the interests shall pass in accordance with sub. (2).

AB490,321 Section 321. 702.17 (1), (2) and (5) of the statutes are amended to read:

AB490,171,13 702.17 (1) General policy: general power of appointment. If the donee has either a general power or an unclassified power which is unlimited as to permissible appointees except for exclusion of the donee, the donee's estate, the donee's creditors and the creditors of the donee's estate, or a substantially similar exclusion of appointment, any interest which the donee has power to appoint or has appointed is to be treated as property of the donee for purposes of satisfying claims of the donee's creditors, as provided in this section.

AB490,171,23 (2) During lifetime of the donee. If the donee has an unexercised general power of the kinds specified in sub. (1) appointment, and can presently exercise such a the general power of appointment in favor of the donee or the donee's creditors, any creditor of the donee may by appropriate proceedings reach any interest which the donee could appoint, to the extent that the donee's individual assets are insufficient to satisfy the creditor's claim. Such an interest is to be treated as property of the donee within ch. 816. If the donee has exercised such a general power of appointment, the creditor can reach the appointed interests to the same extent that under the law relating to fraudulent conveyances the creditor could reach property which the donee has owned and transferred.

AB490,172,4 (5) Third parties in good faith protected. Any person acting without actual notice of claims of creditors under this section incurs no liability to such creditors in transferring property which is subject to a power of appointment or which has been appointed; and a purchaser without actual notice and for a valuable consideration of any interest in property, legal or equitable, takes such interest free of any rights which a creditor of the donee might have under this section.

AB490,322 Section 322. 702.17 (3) of the statutes is renumbered 702.17 (3) (a) and amended to read:

AB490,172,15 702.17 (3) (a) If Except as provided in par. (b), if the donee has at the time of his or her the donee's death a general power of the kinds specified in sub. (1) appointment, whether or not the donee exercises the general power of appointment, any creditor of the donee may reach any interest which the donee could have appointed or has appointed, to the extent that the claim of the creditor has been filed and allowed in the donee's estate or filed with and approved by the trustee of a trust that is revocable, as defined in s. 701.0103 (22), by the donee or jointly by the donee and the donee's spouse but not paid because the assets of the estate or revocable trust are insufficient.

AB490,323 Section 323. 702.17 (3) (b) of the statutes is created to read:

AB490,172,20 702.17 (3) (b) If the donee fails to exercise a general power of appointment, in whole or in part, that the donee has at the time of the donee's death and neither the donee nor the donee's spouse is the donor of the power, a creditor of the donee may not reach an interest subject to the power, to the extent the power was not exercised.

AB490,324 Section 324. 702.17 (6) of the statutes is created to read:

AB490,172,24 702.17 (6) General policy: special power of appointment. If the donee has a special power of appointment, property subject to the donee's special power of appointment is exempt from a claim of a creditor of the donee or the donee's estate.

AB490,325 Section 325. 702.21 of the statutes is amended to read:

AB490,173,3 702.21 Applicability of chapter. The provisions of this chapter are applicable to any power of appointment existing on May 16, 1965, as well as a power of appointment created after such date.

AB490,326 Section 326. 766.55 (2) (bm) of the statutes, as created by 2013 Wisconsin Act 20, is amended to read:

AB490,173,11 766.55 (2) (bm) An obligation incurred by a spouse that is recoverable under s. 46.27 (7g), 49.496, 49.682, or 49.849 may be satisfied from all property that was the property of that spouse immediately before that spouse's death and from all property that was marital property at any time within 5 years before that spouse applied for public assistance, as defined in s. 49.849 (1) (e), or while that spouse was eligible for public assistance, as defined in s. 49.849 (1) (e).

AB490,327 Section 327. 766.575 (1) (e) of the statutes is amended to read:

AB490,173,14 766.575 (1) (e) "Trustee" has the meaning given under s. 701.01 (8) 701.0103 (28).

AB490,328 Section 328. 840.01 (1) of the statutes is amended to read:

AB490,173,23 840.01 (1) Except as provided in sub. (2), "interest in real property" includes estates in, powers of appointment under ch. 702 over, present and future rights to, title to, and interests in real property, including, without limitation by enumeration, security interests and liens on land, easements, profits, rights of appointees under powers of appointment, rights under covenants running with the land, powers of termination, and homestead rights. The interest may be an interest that was formerly designated legal or equitable. The interest may be surface, subsurface, suprasurface, riparian, or littoral.

AB490,329 Section 329. 853.17 (2) of the statutes is amended to read:

AB490,174,4 853.17 (2) This section does not prevent the court from requiring the contract beneficiary to elect under s. 853.15 in order to take property under the will; nor does it apply to naming a testamentary trustee as designated by a life insurance policy under s. 701.09.

AB490,330 Section 330. 853.32 (3) of the statutes is amended to read:

AB490,174,8 853.32 (3) Transfers to living trusts. The validity and implementation of a will provision that purports to transfer or appoint property to a living trust are governed by s. 701.08 701.0419.

AB490,331 Section 331. 853.34 (3) of the statutes is created to read:

AB490,174,18 853.34 (3) Assets transferred to trusts created by will. If a trustee of a trust created by a testator's will is designated as the beneficiary of a transfer under another governing instrument, as defined in s. 854.01 (2), at the death of the testator or at the death of a 3rd party, the transfer of any assets under that other governing instrument to the trustee does not cause the transferred assets to be included in the property administered as part of the testator's estate. The transferred assets are not subject to taxes, debts, or charges enforceable against the testator's estate to any greater extent than if the proceeds were payable to a beneficiary other than the testator's estate.

AB490,332 Section 332. 853.61 (2) (a) of the statutes is amended to read:

AB490,174,21 853.61 (2) (a) In addition to any powers conferred upon trustees by law, the trustee shall have all the powers listed in s. 701.16 ss. 701.0815 and 701.0816.

AB490,333 Section 333. 854.13 (1) (c), (2) (a) 2. and (d), (4) (e), (5) (b), (7) (a) and (10) (a) of the statutes are amended to read:

AB490,174,25 854.13 (1) (c) "Power of appointment" has the meaning given in s. 702.01 (4) 702.02 (6).

AB490,175,7 (2) (a) 2. A person who is an heir, recipient of property, or beneficiary under a governing instrument, donee of a power of appointment created by a governing instrument, appointee under a power of appointment exercised by a governing instrument, taker in default under a power of appointment created by a governing instrument, or person succeeding to disclaimed property may disclaim any property, including contingent or future interests or the right to receive discretionary distributions, by delivering a written instrument of disclaimer under this section.

AB490,175,12 (d) Partial disclaimer. Property may be disclaimed in whole or in part, except that a partial disclaimer of property passing by a governing instrument or by the exercise of a power of appointment may not be made if partial disclaimer is expressly prohibited by the governing instrument or by the instrument exercising the power of appointment.

AB490,175,17 (4) (e) Interests arising by disclaimer. Notwithstanding pars. (a) and (b), a person whose interest in property arises by disclaimer or by default of exercise of a power of appointment created by a governing instrument may disclaim at any time not later than 9 months after the day on which the prior instrument of disclaimer is delivered, or the date of death of the donee of the power of appointment.

AB490,175,20 (5) (b) Delivery to trustee. If the trustee of any trust to which the interest or power of appointment relates does not receive the instrument of disclaimer under par. (a), a copy shall also be delivered to the trustee.

AB490,176,7 (7) (a) In general. Subject to pars. (bm) and (c) and subs. (8), (9), and (10), unless the governing instrument provides otherwise, either expressly or as construed from extrinsic evidence, the disclaimed property devolves as if the disclaimant had died before the decedent. If the disclaimed interest is a remainder contingent on surviving to the time of distribution, the disclaimed interest passes as if the disclaimant had died immediately before the time for distribution. If the disclaimant is an appointee under a power of appointment exercised by a governing instrument, the disclaimed property devolves as if the disclaimant had died before the effective date of the exercise of the power of appointment. If the disclaimant is a taker in default under a power of appointment created by a governing instrument, the disclaimed property devolves as if the disclaimant had predeceased the donee of the power of appointment.

AB490,176,17 (10) (a) Subsequent interest not held by disclaimant. Unless the governing instrument provides otherwise, either expressly or as construed from extrinsic evidence, upon the disclaimer of a preceding interest, a subsequent interest not held by the disclaimant and limited to take effect in possession or enjoyment after the termination of the interest that is disclaimed accelerates to take effect as if the disclaimant had died immediately before the time when the disclaimed interest would have taken effect in possession or enjoyment or, if the disclaimant is an appointee under a power of appointment and that power of appointment has been exercised by a power of appointment, as if the disclaimant had died before the effective date of the exercise of the power of appointment.

AB490,334 Section 334. 854.23 (5) (b) of the statutes is amended to read:

AB490,177,2 854.23 (5) (b) Notwithstanding sub. (2), in addition to the protections afforded a financial institution under ss. 701.19 (11) 701.1012 and 710.05 and chs. 112 and 705 a financial institution is not liable for having transferred an account to a beneficiary designated in a governing instrument who, under this chapter, is not entitled to the account, or for having taken any other action in reliance on the beneficiary's apparent entitlement under the terms of a governing instrument, regardless of whether the financial institution received written notice of a claimed lack of entitlement under this chapter.

AB490,335 Section 335. 859.18 (5) (a) of the statutes is amended to read:

AB490,177,5 859.18 (5) (a) The availability of a trust described under s. 701.07 (3) 701.0505 (1) is subject to s. 701.07 (3) 701.0505 (1).

AB490,336 Section 336. 859.18 (5) (b) of the statutes is amended to read:

AB490,177,8 859.18 (5) (b) The availability of a spendthrift trust described under s. 701.06 subch. V of ch. 701 is subject to s. 701.06 subch. V of ch. 701.