701.20(9)(a)(a) If any part of the principal consists of a right to receive royalties, overriding or limited royalties, working interests, production payments, net profit interests, or other interests in minerals, oil, gas, stone, gravel, sand or other natural resources in, on or under land, the receipts from taking the natural resources from the land shall be allocated as follows:
701.20(9)(a)1.
1. If received as rent on a lease or extension payments on a lease, the receipts are income.
701.20(9)(a)2.
2. If received from a production payment, the receipts are income to the extent of any factor for interest or its equivalent provided in the governing instrument. There shall be allocated to principal the fraction of the balance of the receipts which the unrecovered cost of the production payment bears to the balance owed on the production payment, exclusive of any factor for interest or its equivalent. The receipts not allocated to principal are income.
701.20(9)(a)3.
3. If received as a royalty, overriding or limited royalty, or bonus, or from a working, net profit, or any other interest in minerals or other natural resources, receipts not provided for in
subds. 1. and
2. shall be apportioned on a yearly basis in accordance with this subdivision whether or not any natural resource was being taken from the land at the time the trust was established. There shall be added to principal as an allowance for depletion such portion of the gross receipts as shall be allowed as a deduction in computing taxable income for federal income tax purposes. The balance of the gross receipts, after payment therefrom of all expenses, direct and indirect, is income.
701.20(9)(b)
(b) If a trustee, on January 1, 1979, held an item of depletable property of a type specified in this subsection the trustee may continue to allocate receipts from the property in the manner used before January 1, 1979.
701.20(9)(c)
(c) This subsection does not apply to timber, water, soil, sod, dirt, peat, turf, mosses or interests in a partnership or limited liability company owning natural resources.
701.20(10)
(10) Timber, water, soil, sod, dirt, peat, turf, mosses or an interest in a partnership or limited liability company owning natural resources. If any part of the principal consists of an interest in timber, water, soil, sod, dirt, peat, turf, mosses or a partnership or limited liability company owning natural resources, the receipts shall be allocated in accordance with
sub. (2) (a) 3.
701.20(11)
(11) Other property subject to depletion. Except as provided in
subs. (9) and
(10), if the principal consists of property subject to depletion, including leaseholds, patents, copyrights, royalty rights and any rights to receive periodic payments under a contract or plan for deferred compensation or for the benefit of one or more of the employes of an employer, receipts shall be allocated in accordance with
sub. (2) (a) 3.
701.20(12)
(12) Charges against income and principal. 701.20(12)(a)(a) The following charges shall be made against income:
701.20(12)(a)2.
2. Ordinary expenses incurred in connection with the administration, management, or preservation of the trust property, including fees and expenses of attorneys, accountants, appraisers, investment counselors, custodians and agents, regularly recurring taxes assessed against any portion of the principal, all premiums on insurance other than life insurance, interest, maintenance, and ordinary repairs.
701.20(12)(a)3.
3. Any tax levied upon receipts defined as income under this section or the trust instrument and payable by the trustee.
701.20(12)(b)
(b) No allowance may be made for depreciation of any property held by the trustee unless the court directs otherwise.
701.20(12)(c)
(c) If charges against income are of unusual amount, the trustee may by means of reserves or other reasonable means charge them over a reasonable period of time and withhold from distribution sufficient sums to regularize distributions.
701.20(12)(d)
(d) The following charges shall be made against principal:
701.20(12)(d)2.
2. Charges not provided for in
par. (a), including fees and expenses of attorneys, accountants, appraisers, investment counselors, custodians and agents, the cost of investing and reinvesting principal, the payments on principal of an indebtedness including a mortgage amortized by periodic payments of principal, expenses for preparation of property for rental or sale, and attorney fees and other expenses in judicial proceedings unless the court directs otherwise.
701.20(12)(d)3.
3. Extraordinary repairs or expenses incurred in making a capital improvement to principal, including special assessments.
701.20(12)(d)4.
4. Any tax levied upon profit, gain, or other receipts allocated to principal notwithstanding denomination of the tax as an income or franchise tax by the taxing authority.
701.20(12)(d)5.
5. If a death tax or generation skipping transfer tax is levied in respect to a trust, any amount apportioned to the trust, or any beneficial interest in the trust.
701.20(12)(dm)
(dm) The following charges shall be made in equal portions against income and principal:
701.20(12)(dm)1.
1. The trustee's regular compensation, whether based on a percentage of principal or income.
701.20(12)(dm)2.
2. Special compensation of trustees, and trustee's compensation computed on principal as an acceptance, distribution, or termination fee.
701.20(12)(e)
(e) Regularly recurring charges payable from income shall be apportioned to the same extent and in the same manner that income is apportioned under
sub. (4).
701.21
701.21
Income payments and accumulations. 701.21(1)
(1)
Distribution of income. Where a beneficiary is entitled to receive income from a trust, but the creating instrument fails to specify how frequently it is to be paid, the trustee shall distribute at least annually the income to which such beneficiary is entitled.
701.21(2)
(2) Permitted accumulations. No provision directing or authorizing accumulation of trust income shall be invalid.
701.21(3)
(3) Charitable trust accumulations. A trust containing a direction or authorization to accumulate income from property devoted to a charitable purpose shall be subject to the general equitable supervision of the court with respect to any such accumulation of income, including its reasonableness, amount and duration.
701.21(4)
(4) Disposition of accumulated income. Income not required to be distributed by the creating instrument, in the absence of a governing provision in the instrument, may in the trustee's discretion be held in reserve for future distribution as income or be added to principal subject to retransfer to income of the dollar amount originally transferred to principal; but at the termination of the income interest, any undistributed income shall be distributed as principal.
701.22
701.22
Distributions in kind by trustees; marital bequests. In case of a division of trust assets into 2 or more trusts or shares, any distribution or allocation of assets as an equivalent of a dollar amount fixed by formula or otherwise shall be made at current fair market values unless the governing instrument expressly provided that another value may be used. If the governing instrument requires or permits a different value to be used, all assets available for distribution, including cash, shall, unless otherwise expressly provided, be so distributed that the assets, including cash, distributed as such an equivalent will be fairly representative of the net appreciation or depreciation in the value of the available property on the date or dates of distribution. A provision in the governing instrument that the trustee may fix values for purposes of distribution or allocation does not of itself constitute authorization to fix a value other than current fair market value.
701.22 Annotation
The valuation of assets for distribution is the current market value at the time of distribution. Estate of Naulin, 56 W (2d) 100, 201 NW (2d) 599.
701.23
701.23
Removal of trusts. 701.23(1)(1)
Removal to foreign jurisdiction. Unless the creating instrument contains an express prohibition or provides a method of removal, a circuit court having jurisdiction of a trust created by a will admitted to probate in such court may, upon petition of a trustee or a beneficiary with the consent of the trustee and after a hearing as to which notice has been given to the trustee and other interested persons, order removal of such trust to another state where the court finds that such removal is in accord with the express or implied intention of the settlor, would aid the efficient administration of the trust or is otherwise in the best interests of the beneficiaries. Such order may be conditioned on the appointment of a trustee in the state to which the trust is to be removed and shall be subject to such other terms and conditions as the court deems appropriate for protection of the trust property and the interests of the beneficiaries. Upon receipt of satisfactory proof of compliance with all terms and conditions of the order, the court may discharge the local trustee from further responsibility in the administration of the trust.
701.23(2)
(2) Removal to this state. Unless the creating instrument contains an express prohibition against removal or provides a method for removal, a court may, upon the petition of a foreign trustee or beneficiary with the consent of the trustee, appoint a local trustee to receive and administer trust property presently being administered in another state. The local trustee may be required to give bond conditioned on the faithful performance of his or her duties or to meet any other conditions required by a court in the other state before permitting removal of the trust to this state.
701.23 History
History: 1977 c. 449 s.
497;
1993 a. 486.
701.24
701.24
Applicability of ss. 701.01 to 701.23. Except as otherwise provided in
s. 701.19 (9) (a) and
(10),
ss. 701.01 to
701.23 are applicable to a trust existing on July 1, 1971, as well as a trust created after such date and shall govern trustees acting under such trusts. If application of any provision of
ss. 701.01 to
701.23 to a trust in existence on August 1, 1971, is unconstitutional, it shall not affect application of the provision to a trust created after that date.
701.24 History
History: 1971 c. 66;
1977 c. 309.
701.25
701.25
Applicability of general transfers at death provisions. Chapter 854 applies to transfers at death under trust instruments.
701.25 History
History: 1997 a. 188.
701.25 Annotation
Wisconsin's New Probate Code. Erlanger. Wis. Law. Oct. 1998.
701.26
701.26
Disclaimers of nonprobate transfers at death. A person may disclaim, under
s. 854.13, any of the following:
701.26(1)
(1) An interest in a joint tenancy, upon the death of another joint tenant.
701.26(2)
(2) An interest in survivorship marital property, upon the death of the other spouse.
701.26(3)
(3) An interest that is created by a nontestamentary instrument and transferred at death, upon the death that causes the transfer.
701.26 History
History: 1997 a. 188.
