Chapter 701

701.1309   Court involvement.

701.1310   Formalities.

701.1311   Decanting power under expanded distributive discretion.

701.1312   Decanting power under limited distributive discretion.

701.1313   Trust for beneficiary with disability.

701.1314   Protection of charitable interest.

701.1315   Trust limitation on decanting.

701.1316   Change in compensation.

701.1317   Relief from liability and indemnification.

701.1318   Removal or replacement of authorized fiduciary.

701.1319   Tax-related limitations.

701.1320   Duration of 2nd trust.

701.1321   Need to distribute not required.

701.1322   Saving provision.

701.1323   Trust for care of animal.

701.1324   Terms of 2nd trust.

701.1325   Settlor.

701.1326   Later-discovered property.

701.1327   Obligations.

subch. I of ch. 701 SUBCHAPTER I

GENERAL PROVISIONS AND DEFINITIONS

701.0101 701.0101 Short title. This chapter may be cited as the Wisconsin Trust Code.

701.0101 History History: 2013 a. 92.

701.0101 Annotation Estate Planning Metamorphosis: Wisconsin’s New Trust Code. Schultz & Wiensch. Wis. Law. June 2014.

701.0102 701.0102 Scope. This chapter applies to express, charitable or noncharitable, and testamentary or living trusts, and any trust created pursuant to a statute, judgment, or decree that requires the trust to be administered in the manner of an express trust. This chapter does not apply to any of the following:

701.0102(1) (1) A constructive or resulting trust.

701.0102(2) (2) A guardianship.

701.0102(3) (3) A conservatorship.

701.0102(4) (4) A custodial arrangement made pursuant to the Uniform Transfers to Minors Act under ss. 54.854 to 54.898 or the Uniform Custodial Trust Act under ss. 54.950 to 54.988.

701.0102(5) (5) A common trust or a collective investment fund.

701.0102(6) (6) A trust created by a depository agreement with a financial institution.

701.0102(7) (7) A trust made in connection with a business transaction, including a trust created under a bond indenture or collateral trust agreement or in connection with a structured finance transaction, a common law trust under s. 226.14, or a business trust.

701.0102(8) (8) A voting trust.

701.0102(9) (9) A fund maintained pursuant to court order in conjunction with a bankruptcy proceeding, business liquidation, or class action lawsuit.

701.0102(10) (10) A trust that is part of an employee benefit arrangement or an individual retirement account.

701.0102(11) (11) A trust established under a qualified tuition savings program or education savings account.

701.0102(12) (12) A trust account maintained on behalf of a client or customer by a licensed service professional, including a trust account maintained by an attorney or by a real estate broker.

701.0102(12m) (12m) An account that is part of a qualified ABLE program under section 529A (b) of the Internal Revenue Code.

701.0102(13) (13) Any other arrangement under which a person is a nominee or escrowee for another.

701.0102 History History: 2013 a. 92; 2023 a. 127.

701.0103 701.0103 Definitions. In this chapter:

701.0103(1) (1) “Action,” with respect to an act of a trustee, directing party, or trust protector, includes a failure to act.

701.0103(1m) (1m) “Animal protector” means a person appointed in an animal trust to enforce the trust on behalf of the animal or, if no such person is appointed in the trust, a person appointed by the court for that purpose.

701.0103(1n) (1n) “Animal trust” means a trust or an interest in a trust created to provide for the care of one or more animals.

701.0103(2) (2) “Ascertainable standard” means a standard relating to an individual’s health, education, support, or maintenance within the meaning of section 2041 (b) (1) (A) or 2514 (c) (1) of the Internal Revenue Code.

701.0103(3) (3) “Beneficiary” means a person that satisfies any of the following:

701.0103(3)(a) (a) Has a present or future beneficial interest in a trust, vested or contingent.

701.0103(3)(b) (b) In a capacity other than that of trustee, trust protector, or a directing party, holds a power of appointment over trust property.

701.0103(3)(c) (c) Is an identified charitable organization that will or may receive distributions under the terms of the trust.

701.0103(3m) (3m) “Broad limited power of appointment” has the meaning given in s. 702.102 (4).

701.0103(3r) (3r) “Charitable interest” means an interest in a trust that satisfies any of the following:

701.0103(3r)(a) (a) It is held by an identified charitable organization and makes the organization a qualified beneficiary.

701.0103(3r)(b) (b) It benefits only charitable organizations and, if the interest were held by an identified charitable organization, would make the organization a qualified beneficiary.

701.0103(3r)(c) (c) It is held solely for charitable purposes and, if the interest were held by an identified charitable organization, would make the organization a qualified beneficiary.

701.0103(3u) (3u) “Charitable organization” means any of the following:

701.0103(3u)(a) (a) A person, other than an individual, organized and operated exclusively for charitable purposes.

701.0103(3u)(b) (b) A government or governmental subdivision, agency, or instrumentality, to the extent it holds funds exclusively for a charitable purpose.

701.0103(3x) (3x) “Charitable purpose” means the relief of poverty, the advancement of education or religion, the promotion of health, a municipal or other governmental purpose, or another purpose the achievement of which is beneficial to the community.

701.0103(4) (4) “Charitable trust” means a trust, or portion of a trust, created for a charitable purpose. This subsection does not apply in s. 701.1201.

701.0103(5) (5) “Conservator” means a person appointed by a court pursuant to s. 54.76.

701.0103(5g) (5g) “Court” means the court that is identified in s. 701.0203 (1).

701.0103(5w) (5w) “Current beneficiary” means a beneficiary that on the date the beneficiary’s qualification is determined is a distributee or permissible distributee of trust income or principal or is the holder of a presently exercisable general power of appointment.

701.0103(6) (6) “Directed trust property” means all or any portion of the property of a trust that is invested or managed by a directing party or is invested or managed at the direction of a directing party and for which the trustee has no investment or management responsibility.

701.0103(7) (7) “Directing party” means a person who, in a trust instrument or court order, is granted a power to direct a trustee’s investment or distribution decisions or a power to make investment or distribution decisions regarding trust property and the power is granted to the person in a capacity other than as a trustee or a trust protector. For purposes of this subsection, a power of appointment is not a power to direct a trustee’s investment or distribution decisions or a power to make investment or distribution decisions regarding trust property.

701.0103(8) (8) “Environmental law” means a federal, state, or local law, rule, regulation, or ordinance relating to protection or remediation of the environment.

701.0103(9) (9) “General power of appointment” has the meaning given in s. 702.102 (7).

701.0103(10) (10) “Guardian of the estate” means a person appointed by a court under s. 54.10 as a guardian of the estate of a minor or adult individual.

701.0103(11) (11) “Guardian of the person” means a person appointed by a court under s. 54.10 as a guardian of the person of a minor or adult individual.

701.0103(11p) (11p) “Identified charitable organization” means a charitable organization that is expressly designated to receive distributions under the terms of a charitable trust and that is not subject to a right of substitution by the settlor or by any other party prior to the charitable organization becoming a current beneficiary.

701.0103(12) (12) “Incapacitated” means unable to receive and evaluate information effectively or to communicate decisions to such an extent that the individual lacks the capacity to manage his or her decisions.

701.0103(13) (13) “Individual with a disability” means an individual who meets one of the following tests:

701.0103(13)(a) (a) The individual receives social security, supplemental security income, or medical assistance benefits on the basis of being an individual who is disabled, as defined by the applicable program.

701.0103(13)(b) (b) The individual has a mental or physical impairment of a type and severity that would cause the individual to be considered an individual who is disabled for purposes of participating in the social security, supplemental security income, or medical assistance program, if the individual applied to be eligible for one of those programs based on disability, and if the individual’s education, work record, and engagement in substantial gainful activity were disregarded. The fact that the individual is age 65 or older does not bar the individual from being considered an individual with a disability.

701.0103(14) (14) “Interests of the beneficiaries” means the beneficial interests provided in the terms of a trust.

701.0103(15) (15) “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, or such subsequent federal revenue law as may be in effect from time to time.

701.0103(15m) (15m) “Issue” has the meaning given in s. 851.13.

701.0103(16) (16) “Jurisdiction,” with respect to a geographic area, includes a state or country.

701.0103(16m) (16m) “Nongeneral power of appointment” has the meaning given in s. 702.102 (11).

701.0103(17) (17) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity.

701.0103(17m) (17m) “Powerholder” has the meaning given in s. 702.102 (14).

701.0103(18) (18) “Power of appointment” has the meaning given in s. 702.102 (15).

701.0103(19) (19) “Power of withdrawal” means a presently exercisable general power of appointment but does not include any of the following:

701.0103(19)(a) (a) A power exercisable by a trustee and limited by an ascertainable standard.

701.0103(19)(b) (b) A power exercisable by another person only upon consent of a trustee or of a person holding an adverse interest.

701.0103(19r) (19r) “Presently exercisable power of appointment” has the meaning given in s. 702.102 (16).

701.0103(19v) (19v) “Presumptive remainder beneficiary” means, without considering the existence or exercise of a power of appointment, other than a power of appointment that has been irrevocably exercised and notice of the exercise has been given to the trustee, a beneficiary that on the date the beneficiary’s qualification is determined, would be any of the following:

701.0103(19v)(a) (a) A distributee or permissible distributee of trust income or principal if the interests of any current beneficiary terminated on that date without causing the trust to terminate.

701.0103(19v)(b) (b) A distributee or permissible distributee of trust income or principal if the trust terminated on that date.