SB384: Bill Text

SB384,82,9 (3) A beneficiary of a trust that is determined to have been invalid is liable to return any distribution received.

SB384,118 Section 118. 701.065 (title), (1), (2), (3) and (4) of the statutes are renumbered 701.0508 (title), (1), (2), (3) and (4), and 701.0508 (1) (a) 2., as renumbered, is amended to read:

SB384,82,18 701.0508 (1) (a) 2. Except as provided in pars. (b) and (c), if the trustee satisfies the requirements for the publication of the notice under subd. 1., all claims, including claims of the any state and any subdivision thereof of its subdivisions, whether due or to become due, absolute or contingent, liquidated or unliquidated, are barred against the trustee, the trust property and any recipient of trust property unless filed with the trustee on or before the date specified in the notice under subd. 1.

SB384,119 Section 119. 701.065 (5) of the statutes, as created by 2013 Wisconsin Act 20, is repealed.

SB384,120 Section 120. 701.07 of the statutes is repealed.

SB384,121 Section 121. Subchapter VII (title) of chapter 701 [precedes 701.0701] of the statutes is created to read:

SB384,82,24 chapter 701

SB384,82,25 subchapter VII

SB384,83,1 office of trustee

SB384,122 Section 122. 701.0701 of the statutes is created to read:

SB384,83,5 701.0701 Accepting or declining trusteeship. (1) Except as provided in sub. (3), a person designated as trustee accepts the trusteeship by doing any of the following:

SB384,83,7 (a) Substantially complying with a method of acceptance provided in the terms of the trust.

SB384,83,11 (b) If the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.

SB384,83,15 (2) A person designated as trustee who has not yet accepted the trusteeship may decline the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is considered to have rejected the trusteeship.

SB384,83,17 (3) A person designated as trustee, without accepting the trusteeship, may do any of the following:

SB384,83,21 (a) Act to preserve the trust property if, within a reasonable time after acting, the person sends a declination of the trusteeship in writing to the settlor or, if the settlor is dead or incapacitated, to the designated cotrustee, or, if none, to the successor trustee, or, if none, to a distributee or a permissible distributee of the trust.

SB384,83,23 (b) Inspect or investigate trust property to determine potential liability under environmental or other law or for any other purpose.

SB384,123 Section 123. 701.0702 of the statutes is created to read:

SB384,84,4 701.0702 Trustee's bond. (1) A trustee shall give bond to secure performance of the trustee's duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the requirement.

SB384,84,6 (2) The court may specify the amount of a bond, its liabilities, and whether sureties are necessary. The court may modify or terminate a bond at any time.

SB384,84,10 (3) A court may not require a bond from a trust company bank, state bank, or national bank that is authorized to exercise trust powers and that has complied with s. 220.09 or 223.02 nor shall a bond be required of a religious, charitable, or educational corporation or society.

SB384,124 Section 124. 701.0703 of the statutes is created to read:

SB384,84,12 701.0703 Cotrustees. (1) Cotrustees may act only by majority decision.

SB384,84,14 (2) If a vacancy occurs in a cotrusteeship, as provided under s. 701.0704, a majority of the remaining cotrustees may act for the trust.

SB384,84,19 (3) A cotrustee shall participate in the performance of a trustee's function unless the cotrustee is unavailable to perform the function because of absence, illness, disqualification under other law, or the cotrustee is otherwise temporarily incapacitated or the cotrustee has properly delegated the performance of the function to another trustee.

SB384,84,24 (4) If a cotrustee is unavailable to perform duties because of absence, illness, disqualification under other law, or the cotrustee is otherwise temporarily incapacitated, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.

SB384,85,3 (5) A trustee may delegate to a cotrustee a function unless the delegation is expressly prohibited by the terms of the trust. Unless a delegation is irrevocable, a trustee may revoke a delegation previously made.

SB384,85,5 (6) Except as provided in sub. (7), a trustee who does not join in an action of another trustee is not liable for the action.

SB384,85,6 (7) Each trustee shall exercise reasonable care to do all of the following:

SB384,85,7 (a) Prevent a cotrustee from committing a material breach of trust.

SB384,85,8 (b) Compel a cotrustee to redress a material breach of trust.

SB384,85,11 (8) A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified all cotrustees of the dissent at or before the time of the action is not liable for the action unless the action is a material breach of trust.

SB384,125 Section 125. 701.0704 of the statutes is created to read:

SB384,85,14 701.0704 Vacancy in trusteeship; appointment of successor. (1) A vacancy in a trusteeship exists if any of the following occurs:

SB384,85,15 (a) A person designated as trustee declines the trusteeship.

SB384,85,16 (b) A person designated as trustee cannot be identified or does not exist.

SB384,85,17 (c) A trustee resigns.

SB384,85,18 (d) A trustee is disqualified or removed.

SB384,85,19 (e) A trustee dies.

SB384,85,20 (f) A guardian or conservator is appointed for an individual serving as trustee.

SB384,85,23 (2) If one or more cotrustees remain in office, a vacancy in a trusteeship does not need to be filled. A vacancy in a trusteeship shall be filled if the trust has no remaining trustee.

SB384,85,25 (3) A vacancy in a trusteeship that is required to be filled shall be filled in the following order of priority:

SB384,86,1 (a) By a person designated in the terms of the trust to act as successor trustee.

SB384,86,6 (b) By a person appointed by unanimous agreement of the qualified beneficiaries, except that, if the trust is a trust for an individual with a disability, the person appointed under this paragraph may not be the individual with a disability, his or her spouse, or a relative of the individual with a disability who is legally responsible for his or her support.

SB384,86,7 (c) By a person appointed by the court.

SB384,86,11 (4) Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee, directing party, or trust protector whenever the court considers the appointment necessary for the administration of the trust.

SB384,126 Section 126. 701.0705 of the statutes is created to read:

SB384,86,14 701.0705 Resignation of trustee. (1) A trustee may resign in any of the following manners:

SB384,86,16 (a) Upon at least 30 days' notice to the qualified beneficiaries, the settlor, if living, each cotrustee, each trust protector, and each directing party.

SB384,86,17 (b) With the approval of the court.

SB384,86,19 (2) In approving a resignation, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.

SB384,86,22 (3) Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or omissions of the trustee is not discharged or affected by the trustee's resignation.

SB384,127 Section 127. 701.0706 of the statutes is created to read:

SB384,87,3 701.0706 Removal of trustee. (1) The settlor, a cotrustee, or a qualified beneficiary may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative.

SB384,87,4 (2) The court may remove a trustee if any of the following applies:

SB384,87,5 (a) The trustee has committed a material breach of trust.

SB384,87,7 (b) A lack of cooperation among cotrustees substantially impairs the administration of the trust.

SB384,87,10 (c) The court determines that removal of the trustee best serves the interests of the beneficiaries because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively.

SB384,87,15 (d) There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.

SB384,87,19 (3) Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order such appropriate relief under s. 701.1001 (2) as may be necessary to protect the trust property or the interests of the beneficiaries.

SB384,128 Section 128. 701.0707 of the statutes is created to read:

SB384,87,25 701.0707 Delivery of property by former trustee. (1) Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.

SB384,88,3 (2) A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee, or other person entitled to it.

SB384,129 Section 129. 701.0708 of the statutes is created to read:

SB384,88,7 701.0708 Compensation of trustee. (1) If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to compensation that is reasonable under the circumstances.

SB384,88,11 (2) If the terms of a trust specify the trustee's compensation or refer to another ascertainable source for determining that compensation, the trustee is entitled to be compensated as specified, but the court may allow more or less compensation if any of the following applies:

SB384,88,13 (a) The duties of the trustee are substantially different from those contemplated when the trust was created.

SB384,88,15 (b) The compensation specified by the terms of the trust would be unreasonably low or high.

SB384,88,18 (3) If the trustee has rendered other services in connection with the administration of the trust, the trustee may receive reasonable compensation for the other services rendered, in addition to reasonable compensation as trustee.

SB384,130 Section 130. 701.0709 of the statutes is created to read:

SB384,88,22 701.0709 Reimbursement of expenses. (1) A trustee is entitled to be reimbursed out of the trust property, with interest as appropriate, for all of the following:

SB384,88,23 (a) Expenses that were properly incurred in the administration of the trust.

SB384,88,25 (b) To the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly incurred in the administration of the trust.

SB384,89,2 (2) An advance by the trustee of money for the protection of the trust gives rise to a lien against trust property to secure reimbursement with reasonable interest.

SB384,131 Section 131. 701.0710 of the statutes is created to read:

SB384,89,8 701.0710 Title of trust property. A settlor or transferor may effectively transfer property to a trust by placing legal title of the property in the name of the trustee, which shall include any successor trustee regardless of whether a successor trustee is referenced in the transfer document. A transfer that places legal title in the name of the trust itself places legal title in the name of the trustee.

SB384,132 Section 132. 701.08 of the statutes is renumbered 701.0419 and amended to read:

SB384,89,17 701.0419 Transfers to living trusts. (1) Validity and effect. The order of execution of a living trust instrument and a will or other instrument purporting to transfer or appoint property to the trust evidenced by the trust instrument shall be disregarded in determining the validity of the transfer or appointment. No reference in any will to a living trust shall cause assets in such trust to be included in property administered as part of the testator's estate; nor shall it cause the trust or any portion thereof to be treated as a testamentary trust.

SB384,90,9 (2) Governing terms. Property transferred or appointed by a will or by a beneficiary designation under an employee benefit plan, life insurance policy, or other instrument permitting designation of a beneficiary to a living trust, the terms of which the testator or designator was the sole holder of a power to modify, shall be administered in accordance with the terms of the trust as they the terms of the trust may have been modified prior to the testator's or designator's death, even though the will or, beneficiary designation, or other instrument was not reexecuted or republished after exercise of the power to modify, unless the will or, beneficiary designation, or other instrument expressly provides otherwise. Such property transferred or appointed to a living trust, which is subject to a power of modification requiring action or consent of a person other than the testator or designator, shall be administered in accordance with the terms of the trust instrument as they exist at the execution of the will or beneficiary designation, unless expressly otherwise provided. If the will or beneficiary designation expressly provides that the property shall be administered in accordance with the terms of the trust instrument as they may be modified thereafter, the will or beneficiary designation need not be reexecuted or republished after exercise of the power to modify.

SB384,90,13 (3) Disposition when no existing living trust. If at the death of a testator a living trust has been completely revoked, or otherwise terminated, a provision in the testator's will purporting to transfer or appoint property to such the trust shall have the following effect, unless the will provides otherwise:

SB384,90,15 (a) If the testator was a necessary party to the revocation or other termination of such the trust, the provision in the testator's will shall be invalid;.

SB384,90,19 (b) If the testator was not a necessary party to the revocation or other termination of such trust, the provision in the testator's will shall be deemed to create a testamentary trust upon the terms of the living trust instrument at the time the will was executed or as otherwise provided where sub. (2) is applicable.

SB384,133 Section 133. Subchapter VIII (title) of chapter 701 [precedes 701.0801] of the statutes is created to read:

SB384,90,22 chapter 701

SB384,91,2 subchapter VIII duties and powers of trustees, directing parties, and trust protectors

SB384,134 Section 134. 701.0801 of the statutes is created to read:

SB384,91,6 701.0801 Duty to administer trust. Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with this chapter.

SB384,135 Section 135. 701.0802 of the statutes is created to read:

SB384,91,9 701.0802 Duty of loyalty. (1) A trustee shall administer the trust solely in the interests of the beneficiaries.