SB384: Bill Text

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.

SB384,145 Section 145. 701.0812 of the statutes is created to read:

SB384,98,5 701.0812 Collecting trust property; duties of successor trustees. (1) A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee, and to redress a breach of trust known to the trustee to have been committed by a trustee or former trustee, or a trust protector or former trust protector.

SB384,98,7 (2) A successor trustee does not have a duty to examine the accounts of a former trustee.

SB384,146 Section 146. 701.0813 of the statutes is created to read:

SB384,98,14 701.0813 Duty to inform and report. (1) A trustee shall keep the distributees or permissible distributees of trust income or principal, and other qualified beneficiaries who so request, reasonably informed about the administration of the trust. Unless unreasonable under the circumstances, a trustee shall promptly respond to a qualified beneficiary's request for information related to the administration of the trust.

SB384,98,15 (2) A trustee shall do all of the following:

SB384,98,19 (a) Upon the request of a qualified beneficiary for a copy of the trust instrument, promptly furnish to the qualified beneficiary either a copy of the portions of the trust instrument relating to the interest of the qualified beneficiary or a copy of the trust instrument.

SB384,98,22 (b) Within a reasonable period of time after accepting a trusteeship, notify the qualified beneficiaries of the acceptance and of the trustee's name, address, and telephone number.

SB384,99,2 (c) Within a reasonable period of time after the date on which the trustee acquires knowledge of the creation of an irrevocable trust, or the date on which the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise, notify the qualified beneficiaries of all of the following:

SB384,99,3 1. The trust's existence.

SB384,99,4 2. The identity of the settlor or settlors.

SB384,99,6 3. The name, address, and telephone number of each directing party and trust protector.

SB384,99,7 4. The right to request a copy of the documentation referred to in par. (a).

SB384,99,8 5. The right to request information under sub. (1).

SB384,99,9 6. The right to a trustee's report as provided in sub. (3).

SB384,99,12 (d) Notify the distributees or permissible distributees of trust income or principal, and other qualified beneficiaries who so request, of any change in the method or rate of the trustee's compensation.

SB384,99,17 (e) Upon receiving a petition to the court for action under ss. 701.0411 to 701.0416 that does not identify each trust protector and each directing party of the trust, notify the petitioning party of the identity of each trust protector and directing party, including the name, address, and telephone number of each trust protector and directing party, who is serving at the time the petition is filed.

SB384,99,20 (3) (a) At least annually and upon the termination of a trust, a trustee shall send to the distributees or permissible distributees of trust income or principal, and to other qualified beneficiaries who request it, all of the following:

SB384,99,22 1. A report of the trust property, liabilities, receipts, and disbursements, including the source and amount of the trustee's compensation.

SB384,99,23 2. A listing of the trust assets and, if feasible, their respective market values.

SB384,99,25 (b) Upon a vacancy in a trusteeship, unless a cotrustee remains in office, the former trustee shall send a report containing the information described under par. (a) 1. to the qualified beneficiaries. A personal representative or guardian may send the qualified beneficiaries a report containing the information described in par. (a) 1. on behalf of a deceased or incapacitated trustee.

SB384,100,7 (4) A qualified beneficiary may waive the right to a trustee's report or other information otherwise required to be furnished under this section. A qualified beneficiary, with respect to future reports and other information, may withdraw a waiver previously given.

SB384,100,12 (5) Subsections (2) (b) and (c) and (3) do not apply to a trustee who accepts a trusteeship before the effective date of this subsection .... [LRB inserts date], to an irrevocable trust created before the effective date of this subsection .... [LRB inserts date], or to a revocable trust that becomes irrevocable before the effective date of this subsection .... [LRB inserts date].

SB384,147 Section 147. 701.0814 of the statutes is created to read:

SB384,100,20 701.0814 Discretionary powers; tax savings. (1) Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as "absolute," "sole," or "uncontrolled," the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries. A court may not determine that a trustee abused its discretion merely because the court would have exercised the discretion in a different manner or would not have exercised the discretion.

SB384,100,22 (2) Subject to sub. (4), and unless the terms of the trust expressly indicate that a provision of this subsection does not apply, all of the following apply:

SB384,101,2 (a) A person other than a settlor who is a beneficiary and a trustee, directing party, or trust protector of a trust that confers on the trustee, directing party, or trust protector a power to make discretionary distributions to or for the trustee's, directing party's, or trust protector's personal benefit may exercise the power only in accordance with an ascertainable standard.

SB384,101,5 (b) A trustee, directing party, or trust protector may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee, directing party, or trust protector personally owes another person.