701.0505(2)(b)2.b.
b. The amount referenced in section
2503 (b) of the Internal Revenue Code for each individual other than the beneficiary who makes a transfer to the trust or who is deemed to make a transfer to the trust pursuant to an election to split gifts under section
2513 (a) of the Internal Revenue Code.
701.0505(2)(c)
(c) A beneficiary of a trust is not a settlor, has not made a voluntary or involuntary transfer of the beneficiary's interest in the trust, and does not have the power to make a voluntary or involuntary transfer of the beneficiary's interest in the trust solely because the beneficiary holds, exercises, or allows in any capacity, any of the following:
701.0505(2)(c)1.
1. A presently exercisable power to consume, invade, appropriate, or distribute property to or for the benefit of the beneficiary if the power is any of the following:
701.0505(2)(c)1.a.
a. Exercisable only with the consent of another person holding an interest adverse to the beneficiary's interest.
701.0505(2)(c)2.
2. A presently exercisable power to appoint any property of the trust to or for the benefit of a person other than the beneficiary, a creditor of the beneficiary, the beneficiary's estate, or a creditor of the beneficiary's estate.
701.0505(2)(d)
(d) A beneficiary of a trust is not a settlor solely because the beneficiary is entitled to nondiscretionary distributions from the trust.
701.0505(2)(e)1.1. Contributions to the following trusts are not considered to have been contributed by the settlor:
701.0505(2)(e)1.a.
a. An irrevocable marital trust that is treated as qualified terminable interest property under section
2523 (f) of the Internal Revenue Code if after the death of the settlor's spouse the settlor is a beneficiary of the trust or an irrevocable trust that receives property from the trust.
701.0505(2)(e)1.b.
b. An irrevocable marital trust that is treated as a general power of appointment trust under section
2523 (e) of the Internal Revenue Code if after the death of the settlor's spouse the settlor is a beneficiary of the trust or an irrevocable trust that receives property from the trust.
701.0505(2)(e)1.c.
c. An irrevocable trust for the settlor's spouse if after the death of the settlor's spouse the settlor is a beneficiary of the trust or an irrevocable trust that receives property from the trust.
701.0505(2)(e)1.d.
d. An irrevocable trust for the benefit of a person, the settlor of which is the person's spouse, regardless of whether or when the person was the settlor of an irrevocable trust for the benefit of that spouse.
701.0505(2)(e)1.e.
e. An irrevocable trust for the benefit of a person to the extent that the property of the trust was subject to a general power of appointment in another person.
701.0505(2)(e)2.
2. A person who would otherwise be treated as a settlor of a trust described in subd.
1. a. to
e. is not treated as a settlor of the trust.
701.0505(2)(e)3.
3. For purposes of this paragraph, notwithstanding s.
701.0103 (3), “beneficiary" means a person who satisfies s.
701.0103 (3) (a) or
(b) and who is designated in a trust instrument or through the exercise of a special or general power of appointment.
701.0505(3)
(3) Any order entered by a court under this section is subject to modification upon application of an interested person.
701.0505 History
History: 2013 a. 92 ss.
99,
108 to
110.
701.0506(1)(1)
In this section, “mandatory distribution" means a distribution of income or principal that the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. “Mandatory distribution" does not include a distribution subject to the exercise of the trustee's discretion even if any of the following applies:
701.0506(1)(a)
(a) The discretion is expressed in the form of a standard of distribution.
701.0506(1)(b)
(b) The terms of the trust authorizing a distribution couple language of discretion with language of direction.
701.0506(2)
(2) Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution upon termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution date.
701.0506 History
History: 2013 a. 92.
701.0507
701.0507
Personal obligations of trustee. Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt.
701.0507 History
History: 2013 a. 92.
701.0508(1)(a)1.1. A trustee who has a duty or power to pay the debts of a decedent may publish in the county in which the decedent resided, as a class 3 notice, under ch.
985, a deadline for filing claims with the trustee. The deadline shall be the date that is 4 months after the date of the first insertion of the notice.
701.0508(1)(a)2.
2. Except as provided in pars.
(b) and
(c), if the trustee satisfies the requirements for the publication of the notice under subd.
1., all claims, including claims of any state and any of its subdivisions, whether due or to become due, absolute or contingent, liquidated or unliquidated, are barred against the trustee, the trust property and any recipient of trust property unless filed with the trustee on or before the date specified in the notice under subd.
1. 701.0508(1)(b)
(b) Notwithstanding par.
(a) 2., a claim that is not filed on or before the date specified in the notice under par.
(a) 1. is not barred if any of the following apply:
701.0508(1)(b)1.
1. The claim is a claim based on tort, on a marital property agreement that is subject to the time limitations under s.
766.58 (13) (b) or
(c), on Wisconsin income, franchise, sales, withholding, gift, or death taxes, or on unemployment compensation contributions due or benefits overpaid; a claim for funeral or administrative expenses; a claim of this state under s.
46.27 (7g),
49.496,
49.682, or
49.849; or a claim of the United States.
701.0508(1)(b)2.a.
a. On or before the date specified in the notice under par.
(a) 1., the trustee knew, or in the exercise of reasonable diligence should have known, of the existence of the potential claim and of the identity and mailing address of the potential claimant.
701.0508(1)(b)2.b.
b. At least 30 days before the date specified in the notice under par.
(a) 1., the trustee had not given notice to the potential claimant of the final day for filing his or her claim.
701.0508(1)(b)2.c.
c. At least 30 days before the date specified in the notice under par.
(a) 1., the claimant did not have actual knowledge of the date on which the claim would be barred.
701.0508(1)(c)
(c) If an action is pending against a decedent at the time of his or her death and the action survives, the plaintiff in that action may serve a notice of substitution of party defendant on the trustee and file proof of service of notice in the court. Filing of proof of service on or before the deadline for filing a claim under par.
(a) 1. gives the plaintiff the same rights against the trust as the filing of a claim. A judgment in any such action constitutes an adjudication for or against the trust.
701.0508(2)
(2)
Effect of statute of limitations. A trustee shall not pay a claim that was barred by a statute of limitations at the time of the decedent's death. A claim not barred by a statute of limitations at the time of the decedent's death shall not be barred thereafter by a statute of limitations if the claim is filed with the trustee on or before the deadline for filing a claim under sub.
(1) (a) 1. 701.0508(3)(a)
(a) A claim not barred by sub.
(1) (a) 2. because of the operation of sub.
(1) (b) 2. may be enforced against trust property only as provided in this subsection.
701.0508(3)(b)
(b) The claimant shall file the claim with the trustee within one year after the decedent's death and within 30 days after the earlier of the following:
701.0508(3)(b)1.
1. The date that the trustee gives notice to the potential claimant of the deadline for filing a claim under sub.
(1) (a) 1. 701.0508(3)(b)2.
2. The date that the claimant first acquires actual knowledge of the deadline for filing a claim under sub.
(1) (a) 1. 701.0508(3)(c)
(c) The claimant shall have the burden of establishing by the greater weight of the credible evidence that all of the circumstances under sub.
(1) (b) 2. existed.
701.0508(3)(d)
(d) This subsection does not extend the time for commencement of a claim beyond the time provided by any statute of limitations applicable to that claim.
701.0508(4)
(4)
Satisfaction of claim from other property. Failure of a claimant timely to file a claim as provided in this section does not bar the claimant from satisfying the claim, if not otherwise barred, from property other than trust property.
701.0508 History
History: 1997 a. 188;
1999 a. 9;
2013 a. 20;
2013 a. 92 ss.
118,
119; Stats. 2013 s. 701.0508.
REVOCABLE TRUSTS
701.0601
701.0601
Capacity of settlor of revocable trust. The capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.
701.0601 History
History: 2013 a. 92.
701.0602
701.0602
Revocation or amendment of revocable trust. 701.0602(1)(1)
Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection does not apply to a trust created under an instrument executed before July 1, 2014.
701.0602(2)
(2) If a revocable trust is created or funded by more than one settlor, all of the following apply:
701.0602(2)(a)
(a) To the extent the trust consists of marital or community property, the trust may be revoked by either spouse acting alone but may be amended only by joint action of both spouses.
701.0602(2)(b)
(b) To the extent the trust consists of property other than marital or community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor's contribution.
701.0602(2)(c)
(c) Upon the revocation or amendment of the trust by fewer than all of the settlors, the trustee shall promptly notify the other settlors of the revocation or amendment.
701.0602(3)
(3) A settlor may revoke or amend a revocable trust by any of the following means:
701.0602(3)(a)
(a) By substantial compliance with a method provided in the terms of the trust.
701.0602(3)(b)
(b) If the terms of the trust do not provide a method, by any of the following means:
701.0602(3)(b)1.
1. A later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust.
701.0602(3)(b)2.
2. Any other method manifesting clear and convincing evidence of the settlor's intent.
701.0602(4)
(4) Upon revocation of a revocable trust, the trustee shall transfer the trust property as the settlor directs. However, with respect to marital or community property, the trustee shall transfer the property to both spouses as marital or community property.
701.0602(5)
(5) A settlor's powers with respect to revocation, amendment, or distribution of trust property may be exercised by an agent under a power of attorney only to the extent expressly authorized by the terms of the power of attorney.
701.0602(6)
(6) A guardian of the estate or a conservator of the settlor may exercise a settlor's powers with respect to revocation, amendment, or distribution of trust property only with the approval of the court supervising the guardianship or conservatorship.
701.0602(7)
(7) A trustee who does not know that a trust has been revoked or amended is not liable for distributions made and other actions taken on the assumption that the trust had not been amended or revoked, or for distributions made pursuant to sub.
(5).
701.0602 History
History: 2013 a. 92.
701.0603
701.0603
Settlor's powers; powers of withdrawal. 701.0603(1)(1)
While a trust is revocable, the rights of the beneficiaries are subject to the control of, and the duties of the trustee, a directing party, and a trust protector are owed exclusively to, the settlor.
701.0603(2)
(2) If a revocable trust has more than one settlor, the duties of the trustee, a directing party, and a trust protector are owed to all of the settlors.
701.0603(3)
(3) During the period in which a power of withdrawal may be exercised, the holder of the power has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power.
701.0603 History
History: 2013 a. 92.
701.0604
701.0604
Limitation on action contesting validity of revocable trust; distribution of trust property. 701.0604(1)(1)
A person must commence a judicial proceeding to contest the validity of a trust that was revocable immediately before the settlor's death within the earlier of the following:
701.0604(1)(b)
(b) Four months after the trustee sent the person a copy of the trust instrument and a notice informing the person of the trust's existence, of the trustee's name and address, and of the time allowed for commencing a proceeding. Except as provided in s.
701.0813 (2), a trustee is not liable to any person for not providing the information described in this paragraph.
701.0604(2)
(2) Upon the death of the settlor of a trust that was revocable immediately before the settlor's death, the trustee may proceed to distribute the trust property in accordance with the terms of the trust. The trustee is not subject to liability for doing so unless one of the following applies:
701.0604(2)(a)
(a) The trustee knows of a pending judicial proceeding contesting the validity of the trust.
701.0604(2)(b)
(b) A potential contestant has notified the trustee of a possible judicial proceeding to contest the trust and a judicial proceeding is commenced within 60 days after the contestant sent the notification.
701.0604(3)
(3) A beneficiary of a trust that is determined to have been invalid is liable to return any distribution received.
701.0604 History
History: 2013 a. 92.
OFFICE OF TRUSTEE
701.0701
701.0701
Accepting or declining trusteeship. 701.0701(1)(1)
Except as provided in sub.
(3), a person designated as trustee accepts the trusteeship by doing any of the following:
