SB384: Bill Text

SB384,130,9 2. Distributed from a plan, regardless of the reason for the distribution.

SB384,130,14 (c) "Plan" means a contractual, custodial, trust, or other arrangement that provides for distributions to a trust. "Plan" includes a private or commercial annuity, an individual retirement account, a Roth individual retirement account, a qualified retirement plan such as a pension, profit-sharing, stock-bonus, or stock-ownership plan, or any nonqualified deferred compensation plan.

SB384,130,18 (e) "Separate account" means an account established or maintained under a plan under which income, gains, and losses, whether or not realized, from assets allocated to the account, are credited to or charged against the account without regard to other income, gains, or losses of the plan.

SB384,183 Section 183. 701.1123 (4) of the statutes is created to read:

SB384,131,2 701.1123 (4) (a) Notwithstanding sub. (3), a trustee of a marital deduction trust shall determine plan income for an accounting period as if the plan were a trust subject to this subchapter. If the trustee of a marital deduction trust cannot determine the plan income, the plan income is 4 percent of the total present value of the trust's income in the plan on the first day of the accounting period, based on reasonable actuarial assumptions as determined by the trustee of the marital deduction trust.

SB384,131,9 (b) Notwithstanding subs. (2) and (3), a trustee of a marital deduction trust shall allocate a payment from a plan to income to the extent of the plan income and distribute that amount to the surviving spouse. The trustee of the marital deduction trust shall allocate the balance of the payment to principal. Upon the request of the surviving spouse, the trustee of a marital deduction trust shall allocate principal to income to the extent the plan income exceeds payments made from the plan to the trust during the accounting period.

SB384,131,12 (c) Upon the request of the surviving spouse of the settlor, a trustee of a marital deduction trust shall demand that a person administering a plan distribute the plan income to the trust.

SB384,184 Section 184. 701.1126 (title) of the statutes is created to read:

SB384,131,14 701.1126 (title) Timber.

SB384,185 Section 185. 701.1134 (3) (c) and (d) and (4) of the statutes are created to read:

SB384,131,17 701.1134 (3) (c) Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal.

SB384,131,19 (d) From principal to the extent that the tax exceeds the total receipts from the entity.

SB384,131,22 (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.

SB384,186 Section 186. 701.115 of the statutes is repealed.

SB384,187 Section 187. 701.12 of the statutes is repealed.

SB384,188 Section 188. Subchapter XII (title) of chapter 701 [precedes 701.1201] of the statutes is created to read:

SB384,132,3 chapter 701

SB384,132,4 subchapter Xii

SB384,132,5 Miscellaneous Provisions

SB384,189 Section 189. 701.1202 of the statutes is created to read:

SB384,132,13 701.1202 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.

SB384,190 Section 190. 701.1203 of the statutes is created to read:

SB384,132,17 701.1203 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.

SB384,191 Section 191. 701.1205 (3) of the statutes is created to read:

SB384,132,21 701.1205 (3) (a) Except as provided in par. (b), this chapter applies to a judicial proceeding concerning a trust commenced before, on, or after the effective date of this paragraph .... [LRB inserts date].

SB384,133,4 (b) If a court finds that application of a particular provision of this chapter to a judicial proceeding commenced before the effective date of this paragraph .... [LRB inserts date], 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.

SB384,192 Section 192. 701.13 of the statutes is repealed.

SB384,193 Section 193. 701.14 (title) and (1) of the statutes are repealed.

SB384,194 Section 194. 701.14 (2) of the statutes is renumbered 701.0205 and amended to read:

SB384,133,23 701.0205 Notice. If notice of a judicial proceeding involving a trust proceeding to a an interested person interested in the trust, to the person's representative or guardian ad litem as provided in s. 701.15, or to other persons, is required by law or deemed necessary by the court, the court shall order such notice to be given as prescribed in s. 879.05 except that service by publication shall may not be required unless ordered by the court. The court may order both personal service and service by publication on designated persons. Proof of service shall be made as provided in s. 879.07. Persons interested in the trust Interested persons, on behalf of themselves, or their representatives or guardians ad litem as provided in s. 701.15, on behalf of themselves the representative or guardian ad litem and those whom they represent the interested person the representative or guardian ad litem represents, may in writing waive service of notice and consent to the hearing of any matter without notice. Waiver of notice or an appearance by any interested person interested in the trust or the interested person's representative or guardian ad litem as provided in s. 701.15 is equivalent to timely service of notice.

SB384,195 Section 195. 701.14 (3) of the statutes is renumbered 701.0206 and amended to read:

SB384,134,10 701.0206 Attorney for person in military service. At the time of filing a petition for a trust judicial proceeding, involving a trust, the petitioner shall file an affidavit shall be filed setting forth the name of any interested person interested in the proceeding who is actively engaged in the military service of the United States. Whenever it appears by the affidavit or otherwise that any person in the active military service of the United States is an interested in any trust proceeding person and is not represented by an attorney, or by an attorney-in-fact who is duly authorized to act on the interested person's behalf in the matter, the court shall appoint an attorney to represent the interested person and protect the person's interest.

SB384,196 Section 196. 701.14 (4) of the statutes is repealed.

SB384,197 Section 197. 701.15 of the statutes is repealed.

SB384,198 Section 198. 701.16 (title), (1), (2), (3), (4) (title) and (a) to (c), (5) and (6) of the statutes are repealed.

SB384,199 Section 199. 701.16 (4) (d) of the statutes is renumbered 879.47 (2) and amended to read:

SB384,134,20 879.47 (2) Notwithstanding s. 879.47, trustees Trustees and cotrustees may submit to courts accounts in the format that they normally use for accounts submitted to beneficiaries under this subsection, if all of the information required by the court is included.

SB384,200 Section 200. 701.17 of the statutes is repealed.

SB384,201 Section 201. 701.18 of the statutes is repealed.

SB384,202 Section 202. 701.19 of the statutes is repealed.

SB384,203 Section 203. 701.20 (title) of the statutes is repealed.

SB384,204 Section 204. 701.20 (2) (intro.) of the statutes is repealed.

SB384,205 Section 205. 701.20 (2) (a) of the statutes is renumbered 701.1102 (1).

SB384,206 Section 206. 701.20 (2) (b) of the statutes is renumbered 701.1102 (1m) and amended to read:

SB384,135,7 701.1102 (1m) "Beneficiary" Notwithstanding s. 701.0103 (3), "beneficiary" means a person who has a beneficial interest in a trust or an estate and includes, in the case of a decedent's estate, an heir, a legatee, and a devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary.

SB384,207 Section 207. 701.20 (2) (c) of the statutes is renumbered 701.1102 (2).

SB384,208 Section 208. 701.20 (2) (d) of the statutes is renumbered 701.1102 (3) and amended to read:

SB384,135,14 701.1102 (3) "Income" means money or property that a fiduciary receives as current return from a principal asset. "Income" includes a portion of receipts from a sale, exchange, or liquidation of a principal asset, to the extent provided in subs. (10) ss. 701.1115 to (24) 701.1129.

SB384,209 Section 209. 701.20 (2) (e) of the statutes is renumbered 701.1102 (4).

SB384,210 Section 210. 701.20 (2) (f) of the statutes is renumbered 701.1102 (5).

SB384,211 Section 211. 701.20 (2) (g) of the statutes is renumbered 701.1102 (6).

SB384,212 Section 212. 701.20 (2) (h) of the statutes is renumbered 701.1102 (7) and amended to read:

SB384,135,23 701.1102 (7) "Net income" means the total receipts allocated to income during an accounting period, minus the disbursements made from income during the period, plus or minus transfers under this section subchapter to or from income during the period.

SB384,213 Section 213. 701.20 (2) (i) of the statutes is repealed.

SB384,214 Section 214. 701.20 (2) (j) of the statutes is renumbered 701.1102 (8).

SB384,215 Section 215. 701.20 (2) (k) of the statutes is renumbered 701.1102 (9) and amended to read:

SB384,136,5 701.1102 (9) "Remainder beneficiary" means a person entitled to receive principal when an income interest ends who is a beneficiary under s. 701.0103 (21) (b).

SB384,216 Section 216. 701.20 (2) (L), (m) and (n) of the statutes are repealed.

SB384,217 Section 217. 701.20 (3) of the statutes is renumbered 701.1103, and 701.1103 (1) and (2), as renumbered, are amended to read:

SB384,136,11 701.1103 (1) In allocating receipts and disbursements to income or principal or between income and principal, and with respect to any matter within the scope of subs. (5) ss. 701.1110 to (9) 701.1114, a fiduciary:

SB384,136,13 (a) Shall first administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in this section subchapter.

SB384,136,17 (b) May administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by this section subchapter.

SB384,136,20 (c) Shall administer a trust or estate in accordance with this section subchapter if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration.

SB384,136,23 (d) Shall add a receipt or charge a disbursement to principal to the extent that the terms of the trust and this section subchapter do not provide a rule for allocating the receipt or disbursement to principal or income or between principal and income.

SB384,137,6 (2) In exercising the power to adjust under sub. (4) (a) s. 701.1104 (1) or a discretionary power of administration regarding a matter within the scope of this section subchapter, whether granted by the terms of a trust, a will, or this section subchapter, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the beneficiaries, except to the extent that the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with this section subchapter is presumed to be fair and reasonable to all of the beneficiaries.

SB384,218 Section 218. 701.20 (4) of the statutes is renumbered 701.1104, and 701.1104 (1), (2) (intro.), (3) (h) and (i), (4), (5) and (6) as renumbered, are amended to read:

SB384,137,14 701.1104 (1) A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or must be distributed to a beneficiary by referring to the trust's income, and the trustee determines, after applying the rules in sub. (3) (a) s. 701.1103 (1), that the trustee is unable to comply with sub. (3) (b) s. 701.1103 (2).

SB384,137,17 (2) (intro.) In deciding whether and to what extent to exercise the power conferred by par. (a) sub. (1), a trustee shall consider all factors relevant to the trust and its beneficiaries, including the following factors to the extent they are relevant:

SB384,137,18 (3) (h) If the trust has been converted under sub. (4g) s. 701.1106 to a unitrust.

SB384,137,19 (i) If the trust is an express unitrust, as defined in sub. (4j) (a) s. 701.1107 (1).

SB384,137,23 (4) If par. (c) 5., 6. sub. (3) (e), (f), or 7. (g) applies to a trustee and there is more than one trustee, a cotrustee to whom the provision does not apply may make the adjustment unless the terms of the trust do not permit the exercise of the power by that cotrustee.

SB384,138,6 (5) A trustee may release the entire power conferred by par. (a) sub. (1) or may release only the power to adjust from income to principal or the power to adjust from principal to income if the trustee is uncertain about whether possessing or exercising the power will cause a result described in par. (c) 1. sub. (3) (a) to 6. (f) or if the trustee determines that possessing or exercising the power will or may deprive the trust of a tax benefit or impose a tax burden not described in par. (c) sub. (3). The release may be permanent or for a specified period, including a period measured by the life of an individual.

SB384,138,10 (6) Terms of a trust that limit the power of a trustee to make an adjustment between principal and income do not affect the application of this subsection unless it is clear from the terms of the trust that the terms are intended to deny the trustee the power of adjustment conferred by par. (a) sub. (1).

SB384,219 Section 219. 701.20 (4c) (title) of the statutes is renumbered 701.1105 (title).

SB384,220 Section 220. 701.20 (4c) (b) (intro.) of the statutes is renumbered 701.1105 (1) (intro.) and amended to read:

SB384,138,16 701.1105 (1) (intro.) A trustee may, but is not required to, obtain approval of a proposed action under sub. (4) (a) s. 701.1104 (1) by providing a written notice that complies with all of the following:

SB384,221 Section 221. 701.20 (4c) (b) 1. of the statutes is renumbered 701.1105 (1) (a).

SB384,222 Section 222. 701.20 (4c) (b) 2. of the statutes is renumbered 701.1105 (1) (b).

SB384,223 Section 223. 701.20 (4c) (b) 3. (intro.) of the statutes is renumbered 701.1105 (1) (c) and amended to read:

SB384,138,22 701.1105 (1) (c) Is given to all sui juris qualified beneficiaries who are any of the following:.

SB384,224 Section 224. 701.20 (4c) (b) 3. a., b. and c. of the statutes are repealed.

SB384,225 Section 225. 701.20 (4c) (b) 4. of the statutes is renumbered 701.1105 (1) (d), and 701.1105 (1) (d) (intro.) and 4., as renumbered, are amended to read:

SB384,139,2 701.1105 (1) (d) (intro.) States that it is given in accordance with this subsection section and discloses the following information:

SB384,139,4 4. The effective date of the proposed action if no objection is received from any beneficiary within the time specified in subd. 4. c. 3.

SB384,226 Section 226. 701.20 (4c) (c) of the statutes is renumbered 701.1105 (2) and amended to read:

SB384,139,10 701.1105 (2) If a trustee gives notice of a proposed action under this subsection section, the trustee is not required to give notice to a sui juris qualified beneficiary who consents to the proposed action in writing at any time before or after the proposed action is taken.

SB384,227 Section 227. 701.20 (4c) (d) of the statutes is renumbered 701.1105 (3) and amended to read:

SB384,139,15 701.1105 (3) A sui juris qualified beneficiary may object to the proposed action by giving a written objection to the trustee within the time specified in the notice under par. (b) 4. c. sub. (1) (d) 3.

SB384,228 Section 228. 701.20 (4c) (e) of the statutes is renumbered 701.1105 (4) and amended to read: