CHAPTER 112
FIDUCIARIES
112.01 Uniform fiduciaries act.
112.02 Suspension of powers of fiduciaries engaged in war service.
112.03 Proxy voting of corporate stock by fiduciaries.
112.06 Uniform act for simplification of fiduciary transfers.
112.07 Holding of securities by fiduciaries and by custodians for fiduciaries.
112.08 Premium on bond allowed as expense.
112.10 Uniform management of institutional funds act.
112.01
112.01
Uniform fiduciaries act. 112.01(1)
(1)
Definitions. In this section unless the context or subject matter otherwise requires:
112.01(1)(a)
(a) "Bank" includes any person or association of persons, whether incorporated or not, carrying on the business of banking.
112.01(1)(b)
(b) "Fiduciary" includes a trustee under any trust, expressed, implied, resulting or constructive, executor, administrator, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, prime contractor or subcontractor who is a trustee under
ch. 779, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust or estate.
112.01(1)(c)
(c) A thing is done "in good faith" within the meaning of this section, when it is in fact done honestly, whether it be done negligently or not.
112.01(1)(d)
(d) "Person" includes a corporation, limited liability company, partnership, or other association, or two or more persons having a joint or common interest.
112.01(1)(e)
(e) "Principal" includes any person to whom a fiduciary as such owes an obligation.
112.01(3)
(3) Application of payments made to fiduciaries. A person who in good faith pays or transfers to a fiduciary any money or other property which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideration of such payment or transfer is not invalid in consequence of a misapplication by the fiduciary.
112.01(5)
(5) Transfer of negotiable instrument by fiduciary. If any negotiable instrument payable or indorsed to a fiduciary as such is indorsed by the fiduciary, or if any negotiable instrument payable or indorsed to a fiduciary's principal is indorsed by a fiduciary empowered to indorse such instrument on behalf of his or her principal, the indorsee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in indorsing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the fiduciary's obligation as fiduciary, unless the indorsee takes the instrument with actual knowledge of such breach or with knowledge of such facts that the indorsee's action in taking the instrument amounts to bad faith. If, however, such instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is transferred in any transaction known by the transferee to be for the personal benefit of the fiduciary, the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of the fiduciary's obligation as fiduciary in transferring the instrument.
112.01(6)
(6) Check drawn by fiduciary payable to third person. If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of a fiduciary's principal by a fiduciary empowered to draw such instrument in the name of his or her principal, the payee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in drawing or delivering the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the fiduciary's obligation as fiduciary unless the payee takes the instrument with actual knowledge of such breach, or with knowledge of such facts that the payee's action in taking the instrument amounts to bad faith. If, however, such instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is drawn and delivered in any transaction known by the payee to be for the personal benefit of the fiduciary, the creditor or other payee is liable to the principal if the fiduciary in fact commits a breach of the fiduciary's obligation as fiduciary in drawing or delivering the instrument.
112.01(7)
(7) Check drawn by and payable to fiduciary. If a check or other bill of exchange is drawn by a fiduciary as such, or in the name of a fiduciary's principal by a fiduciary empowered to draw such instrument in the name of his or her principal, payable to the fiduciary personally, or payable to a 3rd person, and transferred by the 3rd person to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in transferring the instrument, and is not chargeable with notice that the fiduciary is committing a breach of the fiduciary's obligation as fiduciary, unless the transferee takes the instrument with actual knowledge of such breach, or with knowledge of such facts that the transferee's action in taking the instrument amounts to bad faith.
112.01(8)
(8) Deposit in name of fiduciary as such. If a deposit is made in a bank to the credit of a fiduciary as such, the bank is authorized to pay the amount of the deposit or any part thereof upon the check of the fiduciary, signed with the name in which such deposit is entered, without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in drawing the check, or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank, and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of the fiduciary's obligation as fiduciary in drawing or delivering the check.
112.01(9)
(9) Deposit in name of principal. If a check is drawn upon the account of a fiduciary's principal in a bank by a fiduciary, who is empowered to draw checks upon his or her principal's account, the bank is authorized to pay such check without being liable to the principal, unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of the fiduciary's obligation as fiduciary in drawing such check, or with knowledge of such facts that its action in paying the check amounts to bad faith. If, however, such a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it, the bank is liable to the principal if the fiduciary in fact commits a breach of the fiduciary's obligation as fiduciary in drawing or delivering the check.
112.01(10)
(10) Deposit in fiduciary's personal account. If a fiduciary makes a deposit in a bank to the fiduciary's personal credit of checks drawn by the fiduciary upon an account in his or her own name as fiduciary, or of checks payable to the fiduciary as fiduciary, or of checks drawn by the fiduciary upon an account in the name of his or her principal if the fiduciary is empowered to draw checks thereon, or of checks payable to his or her principal and indorsed by the fiduciary, if the fiduciary is empowered to indorse such checks, or if the fiduciary otherwise makes a deposit of funds held by the fiduciary as fiduciary, the bank receiving such deposit is not bound to inquire whether the fiduciary is committing thereby a breach of his or her obligation as fiduciary. The bank is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary, including checks payable to the bank, without being liable to the principal, unless the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his or her obligation as fiduciary in making such deposit or in drawing such check, or with knowledge of such facts that its action in receiving the deposit or paying the check amounts to bad faith, and the bank paying the check is not bound to inquire whether the fiduciary is committing thereby a breach of his or her obligation as fiduciary.
112.01(11)
(11) Deposit or safe deposit box rental in name of estate or two or more fiduciaries. When a deposit is made in a bank or a safe deposit box or storage space rented, in the name of 2 or more persons as trustees, executors or administrators, or in the name of an estate having 2 or more executors or administrators, and a check is drawn upon such account, or access to said box or storage space is sought by any one or more of such fiduciaries authorized by the other fiduciary or fiduciaries to draw checks upon such account, or to enter said box or said storage space, neither the payee nor other holder nor the bank is bound to inquire whether it is a breach of trust to authorize such fiduciary or fiduciaries to draw checks upon such account, or to enter said box or storage space, and is not liable unless the circumstances be such that the action of the payee or other holder or the bank amounts to bad faith.
112.01(12)
(12) Not retroactive. The provisions of this section shall not apply to transactions taking place prior to June 4, 1925.
112.01(13)
(13) Cases not provided for in section. In any case not provided for in this section the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, agency, negotiable instruments and banking, shall continue to apply.
112.01(14)
(14) Uniformity of interpretation. This section shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.
112.01(15)
(15) Short title. This section may be cited as the "Uniform Fiduciaries Act".
112.01(16)
(16) Inconsistent laws repealed. All acts or parts of acts inconsistent with this section are repealed.
112.01 Annotation
Actual knowledge or bad faith is precondition for liability under (6). Bolger v. Merrill Lynch Trust, 143 W (2d) 766, 423 NW (2d) 173 (Ct. App. 1988).
112.02
112.02
Suspension of powers of fiduciaries engaged in war service. 112.02(1)(1) Whenever an executor, administrator, guardian or testamentary trustee is engaged in war service as defined in this section, such fiduciary or any other person interested in the estate or fund may present a petition to the court having jurisdiction praying for a decree suspending the powers of such fiduciary while the fiduciary is engaged in war service and until the further order of the court, and if the suspension of such fiduciary will leave no person acting as executor, administrator, guardian or testamentary trustee, or leave the sole beneficiary of a trust as the only acting trustee thereof, the petition must pray for the appointment of a successor unless a successor has been named in the will and such successor is not engaged in war service or is not for other reasons unable or unwilling to act as a fiduciary.
112.02(2)
(2) For the purposes of this section a fiduciary shall be deemed to be engaged in war service in any of the following cases:
112.02(2)(a)
(a) If the fiduciary is a member of the military or naval forces of the United States or of any of its allies or if the fiduciary has been accepted for such service and is awaiting induction into such service.
112.02(2)(b)
(b) If the fiduciary is engaged in any work abroad in connection with a governmental agency of the United States or in connection with the American Red Cross society or any other body with similar objects.
112.02(2)(c)
(c) If the fiduciary is interned in an enemy country or is in a foreign country or a possession or dependency of the United States and is unable to return to this state.
112.02(3)
(3) Where the application is made by a fiduciary engaged in war service notice shall be given to such persons and in such manner as the presiding judge may direct. Where the application is made by any other person interested in the estate or fund and the fiduciary is in the military or naval service of the United States notice shall be given to such fiduciary in such manner as the judge may direct. In every other case where the application is made by a person other than the fiduciary notice thereof shall be given to such persons and in such manner as the judge may direct.
112.02(4)
(4) Upon the filing of the petition and the proof of service of the notice prescribed, the court may, notwithstanding any other provision of law, suspend the fiduciary engaged in war service from the exercise of all of the fiduciary's powers and duties while such fiduciary remains engaged in war service and until the further order of the court. The decree may further provide that the remaining executor, administrator, guardian or testamentary trustee or if there be none, the successor named in the will or appointed by the court is possessed of and may exercise all of the powers and duties incidental to the person's office as fiduciary.
112.02(5)
(5) When the suspended fiduciary ceases to be engaged in war service the suspended fiduciary may be reinstated as executor, administrator, guardian or testamentary trustee if any of the duties of such office remain unexecuted, upon application to the court and upon such notice as the presiding judge thereof may direct. If the suspended fiduciary is reinstated the court shall thereupon remove the suspended fiduciary's successor and revoke the successor fiduciary's letters and make such other order or decree as justice requires, but such removal and revocation of letters shall not bar the successor from subsequently qualifying as a fiduciary in accordance with the provisions of the will or if for any reason it thereafter becomes necessary that a fiduciary be appointed.
112.02 History
History: 1993 a. 492.
112.03
112.03
Proxy voting of corporate stock by fiduciaries. Shares of stock in any corporation organized under the laws of the United States, any of the states thereof, any foreign country or any province or other political subdivision thereof held by a fiduciary may be voted by such fiduciary by general or limited proxy, with or without power of substitution, unless such manner of voting is expressly prohibited by the document creating the fiduciary relationship or unless the manner of voting such shares is specifically directed in such document. For the purpose of this section the word "corporation" shall be construed to include investment companies which are common law trusts.
112.06
112.06
Uniform act for simplification of fiduciary transfers. 112.06(1)(1)
Definitions. In this section, unless the context otherwise requires:
112.06(1)(a)
(a) "Assignment" includes any written stock power, bond power, bill of sale, deed, declaration of trust or other instrument of transfer.
112.06(1)(b)
(b) "Claim of beneficial interest" includes a claim of any interest by a decedent's legatee, distributee, heir or creditor, a beneficiary under a trust, a ward, a beneficial owner of a security registered in the name of a nominee, or a minor owner of a security registered in the name of a custodian, or a claim of any similar interest, whether the claim is asserted by the claimant or by a fiduciary or by any other authorized person on the claimant's behalf, and includes a claim that the transfer would be in breach of fiduciary duties.
112.06(1)(c)
(c) "Corporation" means a private or public corporation, limited liability company, association or trust issuing a security.
112.06(1)(d)
(d) "Fiduciary" means an executor, administrator, trustee, guardian, committee, conservator, curator, tutor, custodian or nominee.
112.06(1)(e)
(e) "Person" includes an individual, a corporation, government or governmental subdivision or agency, business trust, estate, trust, limited liability company, partnership or association, 2 or more persons having a joint or common interest, or any other legal or commercial entity.
112.06(1)(f)
(f) "Security" includes any share of stock, bond, debenture, note or other security issued by a corporation which is registered as to ownership on the books of the corporation.
112.06(1)(g)
(g) "Transfer" means a change on the books of a corporation in the registered ownership of a security.
112.06(1)(h)
(h) "Transfer agent" means a person employed or authorized by a corporation to transfer securities issued by the corporation.
112.06(2)
(2) Registration in the name of a fiduciary. A corporation or transfer agent registering a security in the name of a person who is a fiduciary or who is described as a fiduciary is not bound to inquire into the existence, extent, or correct description of the fiduciary relationship, and thereafter the corporation and its transfer agent may assume without inquiry that the newly registered owner continues to be the fiduciary until the corporation or transfer agent receives written notice that the fiduciary is no longer acting as such with respect to the particular security.
112.06(3)
(3) Assignment by a fiduciary. Except as otherwise provided in this section, a corporation or transfer agent making a transfer of a security pursuant to an assignment by a fiduciary:
112.06(3)(a)
(a) May assume without inquiry that the assignment, even though to the fiduciary himself or herself or to the fiduciary's nominee, is within the fiduciary's authority and capacity and is not in breach of his or her fiduciary duties;
112.06(3)(b)
(b) May assume without inquiry that the fiduciary has complied with any controlling instrument and with the law of the jurisdiction governing the fiduciary relationship, including any law requiring the fiduciary to obtain court approval of the transfer; and
112.06(3)(c)
(c) Is not charged with notice of and is not bound to obtain or examine any court record or any recorded or unrecorded document relating to the fiduciary relationship or the assignment, even though the record or document is in its possession.
112.06(4)
(4) Evidence of appointment or incumbency. A corporation or transfer agent making a transfer pursuant to an assignment by a fiduciary who is not the registered owner shall obtain the following evidence of appointment or incumbency:
