SB384: Bill Text

SB384,49,17 (3) An exercise of a power of appointment in favor of a trustee.

SB384,49,18 (4) A court pursuant to its statutory or equitable powers.

SB384,49,21 (5) A guardian of the estate or conservator acting with authority of the court, a representative payee, or an agent under a power of attorney that expressly grants authority to create the trust.

SB384,49,23 (6) Any other manner authorized by statute, regulation, common law, or other provision having the effect of law.

SB384,76 Section 76. 701.0402 of the statutes is created to read:

SB384,50,2 701.0402 Requirements for creation. (1) A trust is created only if all of the following are satisfied:

SB384,50,5 (a) The settlor of the trust has capacity, as defined in sub. (4), to create the trust, unless the trust is created by court order or by an agent, guardian of the estate, conservator, or representative payee with authority to act.

SB384,50,8 (b) The settlor indicates an intention to create the trust; or a statute, regulation, common law, other provision having the effect of law, judgment, or decree creates or authorizes the creation of a trust.

SB384,50,9 (c) The trust has a definite beneficiary or is one of the following:

SB384,50,10 1. A charitable trust.

SB384,50,11 2. A trust for the care of an animal, as provided in s. 701.0408.

SB384,50,12 3. A trust for a noncharitable purpose, as provided in s. 701.0409.

SB384,50,13 (d) The trustee has duties to perform.

SB384,50,14 (e) The same person is not the sole trustee and sole beneficiary.

SB384,50,16 (2) A beneficiary is definite if the beneficiary can be ascertained at the time the trust is created or in the future.

SB384,50,20 (3) A power in a trustee or trust protector to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property subject to the power passes to the persons who would have taken the property had the power not been conferred.

SB384,50,22 (4) The capacity required to create a trust is the same as the capacity to make a will.

SB384,77 Section 77. 701.0403 of the statutes is created to read:

SB384,51,2 701.0403 Trusts created in other jurisdictions. A trust not created by will is validly created if its creation complies with the law of the jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which, at the time of creation, any of the following was satisfied:

SB384,51,3 (1) The settlor was domiciled, had a place of abode, or was a national.

SB384,51,4 (2) A trustee was domiciled or had a place of business.

SB384,51,5 (3) Any trust property was located.

SB384,78 Section 78. 701.0404 of the statutes is created to read:

SB384,51,10 701.0404 Trust purposes. A trust may be created only to the extent its purposes are lawful and possible to achieve. A trust and its terms must be for the benefit of its beneficiaries or for a noncharitable, but otherwise valid, purpose as described in s. 701.0409.

SB384,79 Section 79. 701.0405 of the statutes is created to read:

SB384,51,15 701.0405 Charitable purposes; enforcement.   (1) A charitable trust may be created for the relief of poverty, the advancement of education or religion, the promotion of health or governmental or municipal purposes, or other purposes the achievement of which is beneficial to the community.

SB384,51,20 (2) If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary, or designate persons or procedures for selecting charitable purposes or beneficiaries, the court may select one or more charitable purposes or beneficiaries. The selection must be consistent with the settlor's intention to the extent it can be ascertained.

SB384,51,25   (3) The settlor of a charitable trust or his or her designees, whether identified within or without the terms of the trust, or a charitable entity named in the trust instrument, or the attorney general, or a cotrustee, or such other person the court determines to have sufficient interest may maintain a proceeding to enforce the trust.

SB384,80 Section 80. 701.0406 of the statutes is created to read:

SB384,52,4 701.0406 Creation of trust induced by fraud, duress, or undue influence. A trust is void to the extent its creation was induced by fraud, duress, or undue influence.

SB384,81 Section 81. 701.0407 of the statutes is created to read:

SB384,52,9 701.0407 Evidence of oral trust. Except as required by a statute other than this chapter, a trust does not need to be evidenced by a trust instrument, but the creation of an oral trust and its terms may be established only by clear and convincing evidence.

SB384,82 Section 82. 701.0408 of the statutes is created to read:

SB384,52,15 701.0408 Trust for care of animal. (1) A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.

SB384,52,20 (2) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed under this subsection.

SB384,52,25 (3) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor's successors in interest.

SB384,83 Section 83. 701.0409 of the statutes is created to read:

SB384,53,4 701.0409 Noncharitable trust without ascertainable beneficiary. Except as otherwise provided in s. 701.0408 or by another statute, the following rules apply:

SB384,53,7 (1) A trust may be created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose to be selected by the trustee.

SB384,53,12 (2) A trust may be created for maintaining, keeping in repair, and preserving any grave, tomb, monument, gravestone, or any cemetery. Any cemetery authority under s. 157.061 (2) may receive property in trust for any of the purposes specified in this subsection and apply the income from the trust to the purpose stated in the trust instrument.

SB384,53,16 (3) A trust authorized by this section may be enforced by a trust protector with the power to enforce the trust. If there is not a trust protector with the power to enforce the trust, a court may appoint a trust protector with the power to enforce the trust under s. 701.0818.

SB384,53,21 (4) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor's successors in interest.

SB384,84 Section 84. 701.0410 of the statutes is created to read:

SB384,54,2 701.0410 Modification or termination of trust; proceedings for approval or disapproval. (1) In addition to the methods of termination prescribed by ss. 701.0411 to 701.0414, a trust terminates to the extent the trust is revoked or expires pursuant to its terms, no purpose of the trust remains to be achieved, or the purposes of the trust have become unlawful or impossible to achieve.

SB384,54,10 (2) A proceeding to approve or disapprove a proposed modification or termination under ss. 701.0411 to 701.0416, or a proposed trust combination or division under s. 701.0417, may be commenced by a trustee or beneficiary, and a proceeding to approve or disapprove a proposed modification or termination under s. 701.0411 may be commenced by the settlor. The settlor of a charitable trust may maintain a proceeding to modify the trust under s. 701.0413. A trustee does not have standing to oppose a proposed modification or termination commenced under s. 701.0411 (1).

SB384,54,19 (3) A trustee may not be compelled by a modification or termination under this section or under ss. 701.0411 to 701.0416 to make distributions to or for any beneficiary of a trust for an individual with a disability or to terminate the trust, during the lifetime of the individual with a disability. A court may modify the terms of a trust for an individual with a disability with retroactive effect or reform the terms of such trust to achieve the settlor's objective or, if because of circumstances not anticipated by the settlor, to otherwise further the purposes of the trust so that it does not result in trust property being countable as resources or income of the individual with a disability for purposes of public assistance.

SB384,85 Section 85. 701.0411 of the statutes is created to read:

SB384,55,4 701.0411 Modification or termination of noncharitable irrevocable trust by consent. (1) A noncharitable irrevocable trust may be modified or terminated, with or without court approval, upon consent of the settlor and all beneficiaries, even if the modification or termination is inconsistent with a material purpose of the trust. A settlor's power to consent to a trust's modification or termination may be exercised by a representative under s. 701.0303 only if the representative is specifically authorized to consent to a trust's modification or termination under a power of attorney, the terms of the trust, or by a court under a guardianship or conservatorship.

SB384,55,7 (2) (a) A noncharitable irrevocable trust may be terminated upon consent of all of the beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust.

SB384,55,10 (b) A noncharitable irrevocable trust may be modified upon consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.

SB384,55,12 (3) A spendthrift provision in the terms of the trust is not presumed to constitute a material purpose of the trust.

SB384,55,14 (4) A court may not compel a beneficiary to consent to a modification or termination to satisfy a creditor of the beneficiary.

SB384,55,16 (5) Upon termination of a trust under sub. (1) or (2), the trustee shall distribute the trust property as agreed by the beneficiaries.

SB384,55,19 (6) If not all of the beneficiaries consent to a proposed modification or termination of the trust under sub. (1) or (2), the modification or termination may be approved by the court if the court is satisfied that all of the following apply:

SB384,55,21 (a) If all of the beneficiaries had consented, the trust could have been modified or terminated under this section.

SB384,55,23 (b) The interests of a beneficiary who does not consent will be adequately protected.

SB384,56,2 (7) A party proposing to modify or terminate a trust under sub. (1) or (2) shall give notice of the proposed modification or termination to the settlor, if living, the trustee, each trust protector, each directing party, and each beneficiary at least 30 days before the proposed effective date of the modification or termination.

SB384,86 Section 86. 701.0412 of the statutes is created to read:

SB384,56,9 701.0412 Modification or termination because of unanticipated circumstances or inability to administer trust effectively. (1) The court may modify the administrative or dispositive terms of a trust or terminate the trust if, because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust. To the extent practicable, the court shall make the modification in accordance with the settlor's probable intention.

SB384,56,12 (2) The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or wasteful or impair the trust's administration.

SB384,56,14 (3) Upon termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.

SB384,56,17 (4) A party petitioning the court for action under this section shall give notice of the proceeding to the settlor, if living, the trustee, each trust protector, each directing party, and the qualified beneficiaries.

SB384,87 Section 87. 701.0413 of the statutes is created to read:

SB384,56,21 701.0413 Cy pres. (1) The purpose of this section is to broaden the power of the courts to make charitable gifts more effective. The court shall liberally apply the cy pres doctrine.

SB384,56,23 (2) Except as provided in sub. (3), if a particular charitable purpose becomes unlawful, impracticable, impossible to achieve, or wasteful, all of the following apply:

SB384,56,24 (a) The trust does not fail, in whole or in part.

SB384,57,2 (b) The trust property does not revert to the settlor or the settlor's successors in interest.

SB384,57,12 (c) The court may apply the cy pres doctrine to modify or terminate the trust by directing that the trust property be applied or distributed, in whole or in part, in a manner consistent with the settlor's charitable purposes. In determining the alternative plan for disposition of the property under this paragraph, the court shall take into account current and future community needs in the general field of charity within which the original charitable purpose falls, other charitable interests of the settlor, the amount of principal and income available under the trust, and other relevant factors. A person with standing to enforce the terms of a charitable trust under s. 701.0405 (3) has standing to commence a proceeding under this paragraph. The attorney general is a necessary party in all proceedings under this paragraph.

SB384,57,17 (3) A provision in the terms of a charitable trust that would result in distribution of the trust property to a noncharitable beneficiary prevails over the power of the court under sub. (2) to apply the cy pres doctrine to modify or terminate the trust only if, when the provision takes effect, the trust property is to revert to the settlor and the settlor is still living.

SB384,57,21 (4) A party petitioning the court for action under this section shall give notice to the settlor, if living, the trustee, each trust protector, each directing party, the qualified beneficiaries, and any person with standing to enforce the terms of a charitable trust under s. 701.0405 (3).

SB384,88 Section 88. 701.0414 of the statutes is created to read:

SB384,57,24 701.0414 Modification or termination of uneconomic trust. (1) In this section:

SB384,58,4 (a) "Adjustment reference number" means the consumer price index for all urban consumers, as published by the United States bureau of labor statistics, in effect on January 1 of the year in which an adjustment is to be made in accordance with sub. (3).

SB384,58,7 (b) "Base reference number" means the consumer price index for all urban consumers, as published by the United States bureau of labor statistics, in effect on January 1 of the base year.

SB384,58,9 (c) "Base year" means the year in which this paragraph takes effect .... [LRB inserts date].

SB384,58,14 (2) After notice to the settlor, if living, each trust protector, each directing party, and the qualified beneficiaries, the trustee of a trust consisting of trust property having a total value less than $100,000 or a revised applicable figure, as determined under sub. (3), may terminate the trust if the trustee concludes that the value of the trust property is insufficient to justify the cost of administration.

SB384,58,18 (3) The dollar amount specified in sub. (2) shall be adjusted to a revised applicable figure on the 5th anniversary of the effective date of this subsection .... [LRB inserts date], and every 5 years thereafter. The revised applicable figure shall be determined as follows:

SB384,58,21 (a) Calculate the percentage change between the base reference number and the adjustment reference number for the year in which the adjustment is being made.

SB384,58,23 (b) 1. If the percentage change determined in par. (a) is a positive number, determine the revised applicable figure as follows:

SB384,58,25 a. Multiply $100,000 by the percentage change determined in par. (a), expressed as a decimal.

SB384,59,1 b. Round the product under subd. 1. a. to the nearest $1,000.

SB384,59,2 c. Add the value determined under subd. 1. b. to $100,000.

SB384,59,4 2. If the percentage change determined in par. (a) is a negative number, determine the revised applicable figure as follows:

SB384,59,6 a. Multiply $100,000 by the absolute value of the percentage change determined in par. (a), expressed as a decimal.

SB384,59,7 b. Round the product under subd. 2. a. to the nearest $1,000.

SB384,59,8 c. Subtract the value determined under subd. 2. b. from $100,000.

SB384,59,12 (4) The court may modify or terminate a trust or remove the trustee and appoint a different trustee if it determines that the value of the trust property is insufficient to justify the cost of administration even if the trust property has a total value in excess of the amount described in sub. (2).

SB384,59,14 (5) Upon termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.

SB384,59,15 (6) This section does not apply to an easement for conservation or preservation.