701.0818(2)(b)2.f.
f. Remove, replace, or appoint a trustee, trust protector, or directing party or a successor trustee, trust protector, or directing party.
701.0818(2)(b)2.i.
i. Advise the trustee on matters concerning a beneficiary, including whether to provide information to a beneficiary under
s. 701.0813.
701.0818(2)(b)2.j.
j. Correct errors or ambiguities in the terms of the trust that might otherwise require court construction or defeat the settlor's intent.
701.0818(2)(b)3.
3. Notwithstanding
subds. 1. and
2., a trust protector who is also the settlor may exercise any power granted to the trust protector in the trust protector's personal interests.
701.0818(2)(b)4.
4. Notwithstanding
subd. 2., a trust protector who is also a qualified beneficiary may exercise any power granted to the trust protector that is exercisable in a nonfiduciary capacity in the trust protector's personal interests.
701.0818(2)(c)
(c) Notwithstanding
pars. (a) and
(b) and any provision in the trust instrument to the contrary, a trust protector who is also serving as the trustee or a directing party shall exercise any power granted to the trust protector in a fiduciary capacity.
701.0818(3)(a)(a) If a power is exercisable in a fiduciary capacity, the trust protector shall act in good faith and shall exercise the power in a manner that is consistent with the terms and purposes of the trust instrument, court order, or nonjudicial settlement agreement and the interests of the beneficiaries.
701.0818(3)(b)
(b) If a power is exercisable in a nonfiduciary capacity, the trust protector shall act in good faith unless the trust instrument, court order, or nonjudicial settlement agreement provides otherwise.
701.0818(3)(c)
(c) A trust protector does not have a duty to exercise its powers, to monitor the conduct of the trustee or a directing party, or to monitor changes in the law or circumstances of the beneficiaries.
701.0818(4)
(4) Liability. A trust protector is liable for any loss that results from a breach of the trust protector's duties, except as follows:
701.0818(4)(a)
(a) If the trust protector is also the settlor, the trust protector is not liable for any loss that results from a breach of the trust protector's duties.
701.0818(4)(b)
(b) If the trust protector is also a qualified beneficiary, the trust protector is not liable for any loss that results from a breach of the trust protector's duties for a power that is exercised in a nonfiduciary capacity.
701.0818(5)
(5) Resignation and release of powers. A trust protector may resign or release a power granted to the trust protector by giving written notice to the trustee and to any successor trust protector.
701.0818(6)
(6) Prohibited actions. A trust protector may not exercise a power granted to the trust protector to do any of the following:
701.0818(6)(a)
(a) Except as provided in
sub. (2) (b) 3. and
4., create or expand any beneficial interest, power of appointment, right of withdrawal, or right to receive trust property as a result of the exercise of a power of appointment if the creation or expansion would benefit the trust protector, the trust protector's estate, the trust protector's creditors, or creditors of the trust protector's estate.
701.0818(6)(b)
(b) Modify or amend a trust to do any of the following:
701.0818(6)(b)1.
1. Remove a requirement pursuant to
42 USC 1396p (d) (4) to pay back a governmental entity for benefits provided to the permissible beneficiary at the death of that beneficiary.
701.0818(6)(b)2.
2. Reduce or eliminate an income interest of an income beneficiary of any of the following trusts:
701.0818(6)(b)2.a.
a. A trust for which a marital deduction has been taken for federal or state estate tax purposes under section
2056,
2056A, or
2523 of the Internal Revenue Code or any comparable provision of applicable state law, during the life of the settlor's spouse.
701.0818(6)(b)2.b.
b. A charitable remainder trust under section
664 of the Internal Revenue Code, during the life of the noncharitable beneficiary.
701.0818(6)(b)2.c.
c. A trust in which the settlor has a qualified interest under section
2702 (b) of the Internal Revenue Code, during any period in which the settlor is a beneficiary.
701.0818(6)(b)2.d.
d. A trust for which an election as a qualified
Subchapter S Trust under section
1361(d) of the Internal Revenue Code is in place.
701.0818(6)(c)
(c) Modify any beneficial interest in a trust that qualified for a marital deduction or charitable deduction from federal or state estate tax in a manner that would have caused the trust not to qualify for the deduction.
701.0818(7)
(7) Settlor rights. A trust protector is not subject to the direction of the settlor and the settlor may not bring a cause of action against the trust protector. A trust protector may consider a settlor's goals, objectives, and philosophies in establishing the trust and the trust's structure when exercising the powers granted to the trust protector and may do so regardless of whether the settlor is deceased.
701.0818(8)
(8) Duties of a trustee and a directing party. 701.0818(8)(a)(a) A trustee and a directing party shall act in accordance with a trust protector's exercise of a power granted to the trust protector. A trustee and a directing party are not liable for acting in accordance with the trust protector's exercise of a power granted to the trust protector unless the attempted exercise is manifestly contrary to the power granted to the trust protector or the trustee or the directing party knows that the attempted exercise would constitute a serious breach of a duty that the trust protector owes to the beneficiaries of the trust.
701.0818(8)(b)
(b) A trustee and a directing party do not have a duty to monitor the conduct of the trust protector, provide advice to or consult with the trust protector, or communicate with, warn, or apprise any beneficiary concerning instances in which the trustee or the directing party would or might have exercised the trustee's or the directing party's discretion in a manner different from the manner in which the trust protector exercised its discretion.
701.0818(9)(a)(a) A trust protector may request information about the trust from the trustee and, if the requested information is related to a power granted to the trust protector, the trustee shall provide the requested information to the trust protector. If a trustee is bound by any confidentiality restrictions with respect to information requested by a trust protector, the trustee may require that the trust protector agree to be bound by the confidentiality restrictions before delivering such information to the trust protector. A trustee is not liable to any beneficiary for any loss or damages resulting from the trustee providing information to the trust protector that is related to the power granted to the trust protector.
701.0818(9)(b)
(b) Except as otherwise provided in this chapter, a trustee does not have to provide any information to the trust protector that the trust protector does not request.
701.0818(10)
(10) Payment or reimbursement of attorney fees and costs. A trustee shall, in accordance with
s. 701.1004, pay or reimburse a trust protector for attorney fees and costs to defend any claim made against the trust protector.
701.0818(12)
(12) Jurisdiction. A person who accepts an appointment as a trust protector of a trust submits to the jurisdiction of the courts of this state, as provided in
s. 701.0202 (1).
701.0818 History
History: 2013 a. 92.
701.0819
701.0819
Marital deduction transfers. 701.0819(1)
(1) For purposes of this section, "marital deduction transfer" means a lifetime or testamentary transfer of property that is intended to qualify for the marital deduction as indicated by the terms of the trust.
701.0819(2)
(2) In interpreting, construing, or administering a trust instrument, absent a clear expression of intent by the settlor to the contrary, a trustee shall apply the following presumptions that may only be rebutted by clear and convincing evidence:
701.0819(2)(a)
(a) The settlor intended to take advantage of tax deductions, exemptions, exclusions, and credits.
701.0819(2)(b)
(b) The settlor intended that any transfer made to a spouse outright and free of trust qualify for the gift or estate tax marital deduction and is a marital deduction transfer.
701.0819(2)(c)
(c) If the trust instrument refers to a trust as a marital trust, qualified terminable interest property trust, or spousal trust, or refers to qualified terminable interest property, section
2044,
2056,
2056A, or
2523 of the Internal Revenue Code, or a similar provision of applicable state law, the settlor intended that the trust and property passing to the trust qualify for the applicable gift or estate tax marital deduction and that the transfer qualifies for the marital deduction for federal and state gift or estate tax purposes.
701.0819(3)
(3) If a trust receives a marital deduction transfer, the trust instrument shall be construed to comply with the marital deduction provisions of the Internal Revenue Code.
701.0819(4)
(4) If a trust receives a marital deduction transfer, the trustee has all the powers, duties, and discretionary authority necessary to comply with the marital deduction provisions of the Internal Revenue Code. The trustee may not take any action or have any power that may impair the availability of the marital deduction, but this does not require the trustee to make the election under either section
2056 (b) (7),
2056A (a) (3), or
2523 (f) of the Internal Revenue Code.
701.0819 History
History: 2013 a. 92.
INVESTMENT MANAGEMENT OF TRUSTS
701.0901
701.0901
Application of the Wisconsin Prudent Investor Act. Except as provided in this subchapter, the investment management of the property of a trust is governed by
ch. 881.
701.0901 History
History: 2013 a. 92.
701.0902
701.0902
Directed trust property. 701.0902(1)
(1) A directing party who has power over directed trust property shall do all of the following:
701.0902(1)(a)
(a) Direct the trustee on the retention, purchase, sale, exchange, tender, encumbrance, or any other investment transaction of the directed trust property and the investment and reinvestment of principal and income.
701.0902(1)(b)
(b) Direct the trustee with respect to the management, control, and voting powers, including voting proxies, of the directed trust property.
701.0902(1)(c)
(c) Select and determine reasonable compensation of one or more outside investment advisors, managers, consultants, or counselors, which may include the trustee, and delegate investment authority to them pursuant to the investment delegation provisions under
s. 881.01 (10).
701.0902(1)(d)
(d) Determine the frequency of and methodology for valuing directed trust property and provide the value of property for which there is no readily available daily market value.
701.0902(2)
(2) A trustee who has no power over directed trust property does not have a duty to do any of the following with respect to the directed trust property:
701.0902(2)(b)
(b) Perform investment or suitability reviews, inquiries, or investigations.
701.0902(2)(c)
(c) Determine or verify the value of directed trust property for which there is no readily available daily market value.
701.0902(2)(d)
(d) Monitor the conduct or investment performance of the directing party.
701.0902 History
History: 2013 a. 92.
701.0903
701.0903
Nonapplication of prudent investor rule to life insurance contracts owned by trusts. 701.0903(1)
(1) Notwithstanding
s. 881.01, if a principal purpose of a trust is to hold a life insurance contract or to purchase a life insurance contract from contributions made to the trust, the trustee does not have a duty to determine whether the life insurance contract is or remains a proper investment of the trust. For purposes of this subsection, determining whether a life insurance contact is or remains a proper investment includes all of the following:
701.0903(1)(a)
(a) Investigating the financial strength or changes in the financial strength of the life insurance company maintaining the life insurance contract.
701.0903(1)(b)
(b) Determining whether to exercise any policy option, right, or privilege available under the life insurance contract.
701.0903(1)(c)
(c) Diversifying the life insurance contract relative to any other life insurance contracts or any other assets of the trust.
701.0903(1)(d)
(d) Inquiring about or investigating the health or financial condition of an insured.
701.0903(1)(e)
(e) Preventing the lapse of a life insurance contract if the trust does not receive contributions or hold other readily marketable assets to pay the life insurance contract premiums.
701.0903(2)
(2) A trustee is not liable for a loss that arises because the trustee did not take an action specified in
sub. (1).
701.0903(4)
(4) This section does not apply to a trust that was executed before July 1, 2014, unless the trustee notifies the qualified beneficiaries that the trustee elects to be governed by this section and provides the qualified beneficiaries with a copy of this section.
701.0903(5)
(5) Subject to
sub. (4), this section applies to a life insurance contract acquired, retained, or owned by a trustee before, on, or after July 1, 2014.
701.0903 History
History: 2013 a. 92.
LIABILITY OF TRUSTEES AND RIGHTS
OF PERSONS DEALING WITH TRUSTEE
701.1001
701.1001
Remedies for breach of trust. 701.1001(1)
(1) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
701.1001(2)
(2) To remedy a breach of trust that has occurred or may occur, a court may do any of the following:
701.1001(2)(a)
(a) Compel the trustee to perform the trustee's duties.
701.1001(2)(b)
(b) Enjoin the trustee from committing a breach of trust.
701.1001(2)(c)
(c) Compel the trustee to redress a breach of trust by paying money, restoring property, or other means.
701.1001(2)(e)
(e) Appoint an additional trustee, a directing party, or a trust protector having the duties and authority ordered by the court, including, in the case of an additional trustee, the authority to take possession of the trust property and administer the trust.
701.1001(2)(h)
(h) Reduce the compensation of or deny compensation to the trustee.
701.1001(2)(i)
(i) Subject to
s. 701.1012, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and order recovery of the property or its proceeds.
701.1001(2)(j)
(j) Order any other appropriate relief, whether provided elsewhere in this chapter, available at common law, or under equity principles.
701.1001 History
History: 2013 a. 92.
