SB759,60,14 13(5) If a first-trust instrument contains an express restriction described in sub.
14(2), the provision must be included in the 2nd-trust instrument.
SB759,60,18 15701.1316 Change in compensation. (1) If a first-trust instrument specifies
16an authorized fiduciary's compensation, the fiduciary may not exercise the decanting
17power to increase the fiduciary's compensation above the specified compensation
18unless any of the following applies:
SB759,60,2019 (a) All qualified beneficiaries of the 2nd trust consent to the increase in a signed
20record.
SB759,60,2121 (b) The increase is approved by the court.
SB759,60,25 22(2) If a first-trust instrument does not specify an authorized fiduciary's
23compensation, the fiduciary may not exercise the decanting power to increase the
24fiduciary's compensation above the compensation permitted by this chapter unless
25any of the following applies:
SB759,61,2
1(a) All qualified beneficiaries of the 2nd trust consent to the increase in a signed
2record.
SB759,61,33 (b) The increase is approved by the court.
SB759,61,6 4(3) A change in an authorized fiduciary's compensation that is incidental to
5other changes made by the exercise of the decanting power is not an increase in the
6fiduciary's compensation for purposes of subs. (1) and (2).
SB759,61,9 7(4) This section does not apply to a decanting from a first trust that is a pooled
8trust described in 42 USC 1396p (d) (4) (C), or to a decanting to a 2nd trust that is
9a pooled trust described in 42 USC 1396p (d) (4) (C).
SB759,61,13 10701.1317 Relief from liability and indemnification. (1) Except as
11otherwise provided in this section, a 2nd-trust instrument may not relieve an
12authorized fiduciary from liability for breach of trust to a greater extent than the
13first-trust instrument unless any of the following applies:
SB759,61,1514 (a) All the qualified beneficiaries of the 2nd trust consent to the relief from
15liability in a signed record.
SB759,61,1616 (b) The relief from liability is approved by the court.
SB759,61,20 17(2) A 2nd-trust instrument may provide for indemnification of an authorized
18fiduciary of the first trust or another person acting in a fiduciary capacity under the
19first trust for any liability or claim that would have been payable from the first trust
20if the decanting power had not been exercised.
SB759,61,23 21(3) Absent consent of all qualified beneficiaries or the approval of the court, the
222nd-trust instrument may not reduce the aggregate fiduciary liability of all
23fiduciaries of the 2nd trust.
SB759,62,3 24(4) Subject to sub. (3), a 2nd-trust instrument may divide and reallocate
25fiduciary powers among fiduciaries, including one or more trustees, directing

1parties, trust protectors, or other persons, and relieve a fiduciary from liability for
2an act or failure to act of another fiduciary as permitted by law of this state other than
3this subchapter.
SB759,62,7 4701.1318 Removal or replacement of authorized fiduciary. (1) An
5authorized fiduciary may not exercise the decanting power to modify a provision in
6a first-trust instrument granting another person power to remove or replace the
7fiduciary unless any of the following applies:
SB759,62,98 (a) The person holding the power consents to the modification in a signed record
9and the modification applies only to the person.
SB759,62,1210 (b) The person holding the power and the qualified beneficiaries of the 2nd trust
11consent to the modification in a signed record and the modification grants a
12substantially similar power to another person.
SB759,62,1413 (c) The court approves the modification and the modification grants a
14substantially similar power to another person.
SB759,62,17 15(2) This section does not apply to a decanting from a first trust that is a pooled
16trust described in 42 USC 1396p (d) (4) (C), or to a decanting to a 2nd trust that is
17a pooled trust described in 42 USC 1396p (d) (4) (C).
SB759,62,18 18701.1319 Tax-related limitations. (1) In this section:
SB759,62,2119 (a) “Grantor trust” means a trust as to which a settlor of a first trust is
20considered the owner under sections 671 to 677 of the Internal Revenue Code or
21section 679 of the Internal Revenue Code.
SB759,62,2222 (b) “Nongrantor trust” means a trust that is not a grantor trust.
SB759,63,223 (c) “Qualified benefits property” means property subject to the minimum
24distribution requirements of section 401 (a) (9) of the Internal Revenue Code, and

1any applicable regulations, or to any similar requirements that refer to section 401
2(a) (9) of the Internal Revenue Code or the regulations.
SB759,63,3 3(2) An exercise of the decanting power is subject to the following limitations:
SB759,63,124 (a) If a first trust contains property that qualified, or would have qualified but
5for provisions of this subchapter other than this section, for a marital deduction for
6purposes of the gift or estate tax under the Internal Revenue Code or a state gift,
7estate, or inheritance tax, the 2nd-trust instrument must not include or omit any
8term that, if included in or omitted from the trust instrument for the trust to which
9the property was transferred, would have prevented the transfer from qualifying for
10the deduction, or would have reduced the amount of the deduction, under the same
11provisions of the Internal Revenue Code or state law under which the transfer
12qualified.
SB759,63,2113 (b) If the first trust contains property that qualified, or would have qualified
14but for provisions of this subchapter other than this section, for a charitable
15deduction for purposes of the income, gift, or estate tax under the Internal Revenue
16Code or a state income, gift, estate, or inheritance tax, the 2nd-trust instrument
17must not include or omit any term that, if included in or omitted from the trust
18instrument for the trust to which the property was transferred, would have
19prevented the transfer from qualifying for the deduction, or would have reduced the
20amount of the deduction, under the same provisions of the Internal Revenue Code
21or state law under which the transfer qualified.
SB759,64,1022 (c) If the first trust contains property that qualified, or would have qualified
23but for provisions of this subchapter other than this section, for the exclusion from
24the gift tax described in section 2503 (b) of the Internal Revenue Code, the 2nd-trust
25instrument must not include or omit a term that, if included in or omitted from the

1trust instrument for the trust to which the property was transferred, would have
2prevented the transfer from qualifying under section 2503 (b) of the Internal
3Revenue Code. If the first trust contains property that qualified, or would have
4qualified but for provisions of this subchapter other than this section, for the
5exclusion from the gift tax described in the Internal Revenue Code section 2503 (b)
6by application of section 2503 (c) of the Internal Revenue Code, the 2nd-trust
7instrument must not include or omit a term that, if included or omitted from the trust
8instrument for the trust to which the property was transferred, would have
9prevented the transfer from qualifying under section 2503 (c) of the Internal
10Revenue Code.
SB759,64,2211 (d) If the property of the first trust includes shares of stock in an S corporation,
12as defined in section 1361 of the Internal Revenue Code, and the first trust is, or but
13for provisions of this subchapter other than this section would be, a permitted
14shareholder under any provision of section 1361 of the Internal Revenue Code, an
15authorized fiduciary may exercise the power with respect to part or all of the
16S-corporation stock only if any 2nd trust receiving the stock is a permitted
17shareholder under section 1361 (c) (2) of the Internal Revenue Code. If the property
18of the first trust includes shares of stock in an S corporation and the first trust is, or
19but for provisions of this subchapter other than this section would be, a qualified
20subchapter S trust within the meaning of section 1361 (d) of the Internal Revenue
21Code, the 2nd-trust instrument must not include or omit a term that prevents the
222nd trust from qualifying as a qualified subchapter S trust.
SB759,65,423 (e) If the first trust contains property that qualified, or would have qualified but
24for provisions of this subchapter other than this section, for a zero inclusion ratio for
25purposes of the generation-skipping transfer tax under section 2642 (c) of the

1Internal Revenue Code, the 2nd-trust instrument must not include or omit a term
2that, if included in or omitted from the first-trust instrument, would have prevented
3the transfer to the first trust from qualifying for a zero inclusion ratio under section
42642 (c) of the Internal Revenue Code.
SB759,65,155 (f) If the first trust is directly or indirectly the beneficiary of qualified benefits
6property, the 2nd-trust instrument may not include or omit any term that, if
7included in or omitted from the first-trust instrument, would have increased the
8minimum distributions required with respect to the qualified benefits property
9under section 401 (a) (9) of the Internal Revenue Code and any applicable
10regulations, or any similar requirements that refer to section 401 (a) (9) of the
11Internal Revenue Code or the regulations. If an attempted exercise of the decanting
12power violates this paragraph, the trustee is deemed to have held the qualified
13benefits property and any reinvested distributions of the property as a separate
14share from the date of the exercise of the power and s. 701.1322 applies to the
15separate share.
SB759,65,2016 (g) If the first trust qualifies as a grantor trust because of the application of
17section 672 (f) (2) (A) of the Internal Revenue Code, the 2nd trust may not include
18or omit a term that, if included in or omitted from the first-trust instrument, would
19have prevented the first trust from qualifying under section 672 (f) (2) (A) of the
20Internal Revenue Code.
SB759,66,221 (h) In this paragraph, “tax benefit” means a federal or state tax deduction,
22exemption, exclusion, or other benefit not otherwise listed in this section, except for
23a benefit arising from being a grantor trust. Subject to par. (i), a 2nd-trust
24instrument may not include or omit a term that, if included in or omitted from the

1first-trust instrument, would have prevented qualification for a tax benefit if all of
2the following apply:
SB759,66,53 1. The first-trust instrument expressly indicates an intent to qualify for the
4benefit or the first-trust instrument clearly is designed to enable the first trust to
5qualify for the benefit.
SB759,66,86 2. The transfer of property held by the first trust or the first trust qualified, or
7but for provisions of this subchapter other than this section, would have qualified for
8the tax benefit.
SB759,66,99 (i) Subject to par. (d), all of the following apply:
SB759,66,1110 1. Except as otherwise provided in par. (g), the 2nd trust may be a nongrantor
11trust, even if the first trust is a grantor trust.
SB759,66,1312 2. Except as otherwise provided in par. (j), the 2nd trust may be a grantor trust,
13even if the first trust is a nongrantor trust.
SB759,66,1614 (j) An authorized fiduciary may not exercise the decanting power if a settlor
15objects in a signed record delivered to the fiduciary within the notice period and any
16of the following applies:
SB759,66,2017 1. The first trust and a 2nd trust are both grantor trusts, in whole or in part,
18the first trust grants the settlor or another person the power to cause the first trust
19to cease to be a grantor trust, and the 2nd trust does not grant an equivalent power
20to the settlor or other person.
SB759,66,2221 2. The first trust is a nongrantor trust and a 2nd trust is a grantor trust, in
22whole or in part, with respect to the settlor, unless any of the following applies:
SB759,66,2423 a. The settlor has the power at all times to cause the 2nd trust to cease to be
24a grantor trust.
SB759,67,3
1b. The first-trust instrument contains a provision granting the settlor or
2another person a power that would cause the first trust to cease to be a grantor trust
3and the 2nd-trust instrument contains the same provision.
SB759,67,5 4701.1320 Duration of 2nd trust. (1) Subject to sub. (2), a 2nd trust may have
5a duration that is the same as or different from the duration of the first trust.
SB759,67,9 6(2) To the extent that property of a 2nd trust is attributable to property of the
7first trust, the property of the 2nd trust is subject to any rules governing maximum
8perpetuity, accumulation, or suspension of the power of alienation that apply to
9property of the first trust.
SB759,67,13 10701.1321 Need to distribute not required. An authorized fiduciary may
11exercise the decanting power whether or not under the first trust's discretionary
12distribution standard the fiduciary would have made or could have been compelled
13to make a discretionary distribution of principal at the time of the exercise.
SB759,67,18 14701.1322 Saving provision. (1) If exercise of the decanting power would be
15effective under this subchapter except that the 2nd-trust instrument in part does not
16comply with this subchapter, the exercise of the power is effective and the following
17rules apply with respect to the principal of the 2nd trust attributable to the exercise
18of the power:
SB759,67,2019 (a) A provision in the 2nd-trust instrument that is not permitted under this
20subchapter is void to the extent necessary to comply with this subchapter.
SB759,67,2321 (b) A provision required by this subchapter to be in the 2nd-trust instrument
22that is not contained in the instrument is deemed to be included in the instrument
23to the extent necessary to comply with this subchapter.
SB759,68,3
1(2) If a trustee or other fiduciary of a 2nd trust determines that sub. (1) applies
2to a prior exercise of the decanting power, the fiduciary shall take corrective action
3consistent with the fiduciary's duties.
SB759,68,8 4701.1323 Trust for care of animal. (1) The decanting power may be
5exercised over an animal trust that has an animal protector to the extent the trust
6could be decanted under this subchapter if each animal that benefits from the trust
7were an individual, if the animal protector consents in a signed record to the exercise
8of the power.
SB759,68,10 9(2) An animal protector has the rights under this subchapter of a qualified
10beneficiary.
SB759,68,14 11(3) Notwithstanding any other provision of this subchapter, if a first trust is
12an animal trust, in an exercise of the decanting power, the 2nd trust must provide
13that trust property may be applied only to its intended purpose for the period the first
14trust benefitted the animal.
SB759,68,17 15701.1324 Terms of 2nd trust. A reference in this chapter to a trust
16instrument or terms of the trust includes a 2nd-trust instrument and the terms of
17the 2nd trust.
SB759,68,21 18701.1325 Settlor. (1) For purposes of law of this state other than this
19subchapter and subject to sub. (2), a settlor of a first trust is deemed to be the settlor
20of the 2nd trust with respect to the portion of the principal of the first trust subject
21to the exercise of the decanting power.
SB759,68,24 22(2) In determining settlor intent with respect to a 2nd trust, the intent of a
23settlor of the first trust, a settlor of the 2nd trust, and the authorized fiduciary may
24be considered.
SB759,69,5
1701.1326 Later-discovered property. (1) Except as otherwise provided in
2sub. (3), if exercise of the decanting power was intended to distribute all the principal
3of the first trust to one or more 2nd trusts, later-discovered property belonging to the
4first trust and property paid to or acquired by the first trust after the exercise of the
5power is part of the trust estate of the 2nd trust or trusts.
SB759,69,10 6(2) Except as otherwise provided in sub. (3), if exercise of the decanting power
7was intended to distribute less than all the principal of the first trust to one or more
82nd trusts, later-discovered property belonging to the first trust or property paid to
9or acquired by the first trust after exercise of the power remains part of the trust
10estate of the first trust.
SB759,69,14 11(3) An authorized fiduciary may provide in an exercise of the decanting power
12or by the terms of a 2nd trust for disposition of later-discovered property belonging
13to the first trust or property paid to or acquired by the first trust after exercise of the
14power.
SB759,69,17 15701.1327 Obligations. A debt, liability, or other obligation enforceable
16against property of a first trust is enforceable to the same extent against the property
17when held by the 2nd trust after exercise of the decanting power.
SB759,118 18Section 118 . Chapter 702 of the statutes is repealed and recreated to read:
SB759,69,19 19CHAPTER 702
SB759,69,20 20UNIFORM POWERS OF APPOINTMENT ACT
SB759,69,2121 SUBCHAPTER I
SB759,69,2222 GENERAL PROVISIONS
SB759,69,24 23702.101 Short title. This act may be cited as the Uniform Powers of
24Appointment Act.
SB759,69,25 25702.102 Definitions. In this chapter:
SB759,70,2
1(1) “Appointee” means a person to which a powerholder makes an appointment
2of appointive property.
SB759,70,4 3(2) “Appointive property” means the property or property interest subject to a
4power of appointment.
SB759,70,7 5(3) “Blanket-exercise clause” means a clause in an instrument that exercises
6a power of appointment and is not a specific-exercise clause. “Blanket-exercise
7clause” includes a clause that does any of the following:
SB759,70,98 (a) Expressly uses the words “any power” in exercising a power of appointment
9the powerholder has.
SB759,70,1110 (b) Expressly uses the words “any property” in appointing any property over
11which a powerholder has a power of appointment.
SB759,70,1212 (c) Disposes of all property subject to disposition by the powerholder.
SB759,70,15 13(4) “Broad limited power of appointment” means a power of appointment
14exercisable in favor of anyone other than the powerholder, the powerholder's estate,
15the powerholder's creditors, or the creditors of the powerholder's estate.
SB759,70,16 16(5) “Donor” means a person that creates a power of appointment.
SB759,70,19 17(6) “Exclusionary power of appointment” means a power of appointment
18exercisable in favor of one or more permissible appointees to the exclusion of the
19other permissible appointees.
SB759,70,22 20(7) “General power of appointment” means a power of appointment exercisable
21in favor of the powerholder, the powerholder's estate, a creditor of the powerholder,
22or a creditor of the powerholder's estate.
SB759,70,24 23(8) “Gift-in-default clause” means a clause that identifies a taker in default
24of appointment.
SB759,71,2
1(9) “Impermissible appointee” means a person that is not a permissible
2appointee.
SB759,71,3 3(10) “Instrument” means a writing.
SB759,71,5 4(11) “Nongeneral power of appointment” means a power of appointment that
5is not a general power of appointment.
SB759,71,7 6(12) “Permissible appointee” means a person in whose favor a powerholder may
7exercise a power of appointment.
SB759,71,10 8(13) “Person” means an individual, estate, trust, business or nonprofit entity,
9public corporation, government or governmental subdivision, agency, or
10instrumentality, or other legal entity.
SB759,71,14 11(14) “Power of appointment” means a power that enables a powerholder acting
12in a nonfiduciary capacity to designate a recipient of an ownership interest in or
13another power of appointment over the appointive property. “Power of appointment”
14does not include a power of attorney.
SB759,71,16 15(15) “Powerholder” means a person in which a donor creates a power of
16appointment.
SB759,71,24 17(16) “Presently exercisable power of appointment” means a power of
18appointment exercisable by the powerholder at the relevant time. “Presently
19exercisable power of appointment” includes a power of appointment that is not
20exercisable until the occurrence of a specified event, the satisfaction of an
21ascertainable standard, or the passage of a specified time, and only after the
22occurrence of the specified event, the satisfaction of the ascertainable standard, or
23the passage of the specified time, but does not include a power exercisable only at the
24powerholder's death.
SB759,72,2
1(17) “Specific-exercise clause” means a clause in an instrument that
2specifically refers to and exercises a particular power of appointment.
SB759,72,5 3(18) “Taker in default of appointment” means a person that takes all or part
4of the appointive property to the extent the powerholder does not effectively exercise
5the power of appointment.
SB759,72,9 6(19) “Terms of the instrument” means the manifestation of the intent of the
7maker of the instrument regarding the instrument's provisions as expressed in the
8instrument or as may be established by other evidence that would be admissible in
9a legal proceeding.
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