SB384: Bill Text

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.

SB384,91,15 (2) Subject to the rights of persons dealing with or assisting the trustee as provided in s. 701.1012, a sale, encumbrance, or other transaction that involves the investment or management of trust property and is entered into by the trustee for the trustee's own personal account or that is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless any of the following applies:

SB384,91,16 (a) The transaction was authorized by the terms of the trust.

SB384,91,17 (b) The transaction was approved by the court.

SB384,91,19 (c) The beneficiary did not commence a judicial proceeding within the time allowed by s. 701.1005.

SB384,91,21 (d) The beneficiary consented to the trustee's conduct, ratified the transaction, or released the trustee in compliance with s. 701.1009.

SB384,91,23 (e) The transaction involves a contract entered into or claim acquired by the trustee before the person became trustee.

SB384,92,2 (3) A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with any of the following:

SB384,92,3 (a) The trustee's spouse.

SB384,92,4 (b) The trustee's descendants, siblings, parents, or their spouses.

SB384,92,5 (c) An agent or attorney of the trustee.

SB384,92,8 (d) A corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment.

SB384,92,11 (4) A transaction not concerning trust property in which the trustee engages in the trustee's individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.

SB384,92,22 (5) An investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee is not presumed to be affected by a conflict between personal and fiduciary interests if the investment otherwise complies with the prudent investor rule in s. 881.01. In addition to receiving compensation for acting as trustee, the trustee may be compensated by the investment company or investment trust for providing those services out of fees charged to the trust. If the trustee receives compensation from the investment company or investment trust for providing investment advisory or investment management services, the trustee shall at least annually notify the persons entitled to receive a copy of the trustee's report under s. 701.0813 (3) of the rate and method by which that compensation was determined.

SB384,93,2 (6) In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.

SB384,93,4 (7) This section does not preclude the following transactions, if fair to the beneficiaries:

SB384,93,6 (a) An agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee.

SB384,93,7 (b) Payment of reasonable compensation to the trustee.

SB384,93,10 (c) A transaction between a trust and another trust, a decedent's estate, a guardianship of the estate, a conservatorship, or a custodianship of which the trustee is a fiduciary or in which a beneficiary has an interest.

SB384,93,12 (d) A deposit of trust money in a regulated financial-service institution operated by the trustee.

SB384,93,13 (e) An advance by the trustee of money for the protection of the trust.

SB384,93,16 (8) The court may appoint a trustee, trust protector, or directing party to make a decision with respect to any proposed transaction that might violate this section if entered into by the trustee.

SB384,136 Section 136. 701.0803 of the statutes is created to read:

SB384,93,21 701.0803 Impartiality. If a trust has 2 or more beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property, giving due regard to the beneficiaries' respective interests and the purposes and terms of the trust.

SB384,137 Section 137. 701.0804 of the statutes is created to read:

SB384,94,2 701.0804 Prudent administration. A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.

SB384,138 Section 138. 701.0805 of the statutes is created to read:

SB384,94,6 701.0805 Costs of administration. In administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust, the skills of the trustee, and the complexity of the trust administration.

SB384,139 Section 139. 701.0806 of the statutes is created to read:

SB384,94,10 701.0806 Trustee's skills. A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, shall use those special skills or expertise.

SB384,140 Section 140. 701.0807 of the statutes is created to read:

SB384,94,15 701.0807 Delegation by trustee. (1) A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in each of the following:

SB384,94,16 (a) Selecting an agent.

SB384,94,18 (b) Establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust.

SB384,94,20 (c) Periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the terms of the delegation.

SB384,94,22 (2) In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care to comply with the terms of the delegation.

SB384,94,24 (3) A trustee who complies with sub. (1) is not liable to the beneficiaries or to the trust for an action of the agent to whom the function was delegated.

SB384,95,4 (4) By accepting a delegation of powers or duties from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state even if the terms of the delegation provide for a different jurisdiction or venue.

SB384,95,7 (5) This section does not apply to a trustee's delegation of investment and management functions. A trustee's delegation of investment and management functions is governed by s. 881.01 (10).

SB384,141 Section 141. 701.0808 of the statutes is created to read:

SB384,95,11 701.0808 Powers to direct; directing parties. (1) While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust.

SB384,95,20 (2) A settlor in a trust instrument, a court in a trust instrument or court order, or interested persons in a nonjudicial settlement agreement may appoint a directing party to direct the trustee on investment or distribution decisions or to make investment or distribution decisions regarding directed trust property. If a trustee acts in accordance with the direction of a directing party or fails to act due to lack of direction from a directing party, the trustee is not liable for any loss resulting directly or indirectly from any action taken or omitted with respect to the direction or lack of direction except for acts or omissions that are a result of the trustee's willful misconduct.

SB384,95,21 (3) A trustee does not have a duty to do any of the following:

SB384,95,23 (a) Provide advice to, consult with, monitor, or evaluate a directing party's conduct.

SB384,95,25 (b) Inform or warn a beneficiary, a 3rd party, or a directing party that the trustee disagrees with any of the directing party's actions or directions.

SB384,96,1 (c) Prevent a directing party from giving a direction or taking any action.

SB384,96,3 (d) Compel a directing party to redress the directing party's actions or directions.

SB384,96,8 (4) The administrative actions of a trustee related to matters within the scope of a directing party's power, including confirming that the directing party's directions have been carried out and recording and reporting actions taken pursuant to the directing party's direction, do not constitute either monitoring the directing party's actions or participating in the actions of the directing party.

SB384,96,12 (5) A directing party is a fiduciary and is required to act in good faith with regard to the terms of the trust and the interests of the beneficiaries. A directing party is liable for any loss that results from a breach of any of the directing party's fiduciary duties.

SB384,96,21 (6) (a) A directing party may request information about the trust from the trustee and, if the requested information is related to a power granted to the directing party, the trustee shall provide the requested information to the directing party. If a trustee is bound by any confidentiality restrictions with respect to information requested by a directing party, the trustee may require that the directing party agree to be bound by the confidentiality restrictions before delivering such information to the directing party. A trustee is not liable to any beneficiary for any loss or damages resulting from the trustee providing information to the directing party that is related to the power granted to the directing party.

SB384,96,24 (b) Except as otherwise provided in this chapter, a trustee does not have a duty to provide any information to the directing party that the directing party does not request.

SB384,97,3 (7)   Payment or reimbursement of attorney fees and costs. A trustee shall, in accordance with s. 701.1004, pay or reimburse a directing party for attorney fees and costs to defend any claim made against the directing party.

SB384,97,5 (8) Sections 701.0701, 701.0708, 701.0709, 701.1001 to 701.1003, and 701.1005 to 701.1010 apply to a directing party as if the directing party was a trustee.

SB384,97,7 (9) A person who accepts an appointment as a directing party of a trust submits to the jurisdiction of the courts of this state, as provided in s. 701.0202 (1).

SB384,142 Section 142. 701.0809 of the statutes is created to read:

SB384,97,10 701.0809 Control and protection of trust property. A trustee shall take reasonable steps to take control of and protect the trust property.

SB384,143 Section 143. 701.0810 of the statutes is created to read:

SB384,97,13 701.0810 Record keeping and identification of trust property. (1) A trustee shall keep adequate records of the administration of the trust.

SB384,97,15 (2) A trustee shall keep trust property separate from the trustee's own property.

SB384,97,18 (3) Except as otherwise provided in sub. (4), a trustee shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.

SB384,97,20 (4) If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of 2 or more separate trusts.

SB384,144 Section 144. 701.0811 of the statutes is created to read:

SB384,97,24 701.0811 Enforcement and defense of claims. A trustee shall take reasonable steps to enforce claims of the trust known to the trustee and to defend claims against the trust known to the trustee.