SB384,107,8 (2) Upon the occurrence of an event terminating or partially terminating a trust, the trustee shall proceed within a reasonable time to distribute the trust property to the persons entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes.

SB384,107,10 (3) A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent any of the following applies:

SB384,107,11 (a) The release was induced by improper conduct of the trustee.

SB384,107,13 (b) The beneficiary, at the time of the release, did not know of the beneficiary's rights or of the material facts relating to the breach.

SB384,151 Section 151. 701.0818 of the statutes is created to read:

SB384,107,20 701.0818 Trust protectors. (1) Appointment. A settlor in a trust instrument, a court in a trust instrument or court order, or interested persons in a nonjudicial settlement agreement may provide for the appointment of a trust protector, whether referred to as a trust protector, another title, or no title. A trust protector has only the powers granted to the trust protector in the trust instrument, court order, or nonjudicial settlement agreement.

SB384,107,25 (2) Trust protector powers; legal capacity. (a) A settlor in a trust instrument, a court in a trust instrument or court order, or interested persons in a nonjudicial settlement agreement may specify the legal capacity in which a particular power is exercisable by a trust protector and whether a power granted to the trust protector in a capacity other than a fiduciary capacity must be exercised in good faith.

SB384,108,3 (b) If the settlor, court, or interested persons do not specify the legal capacity in which a particular power is exercisable by the trust protector, all of the following apply:

SB384,108,5 1. The power is exercisable in a fiduciary capacity if it is a power to do any of the following:

SB384,108,6 a.   Interpret or enforce the terms of the trust at the request of the trustee.

SB384,108,7 b. Review and approve the trustee's reports or accounting.

SB384,108,8 c.   Resolve disputes between the trustee or a directing party and a beneficiary.

SB384,108,9 d. Consent to or veto distributions to a beneficiary.

SB384,108,10 e. Consent to or veto investment actions.

SB384,108,12 2.   If it is not a power described in subd. 1. a. to e., the power is exercisable in a nonfiduciary capacity, including a power to do any of the following:

SB384,108,15 a. Modify or amend the trust instrument to respond to opportunities related to, or changes in, restraints on alienation or other state laws restricting the terms of a trust, the distribution of trust property, or the administration of the trust.

SB384,108,17 b. Modify or amend the trust instrument to achieve a different tax status or to respond to changes in federal or state law.

SB384,108,19 c. Change the principal place of administration, the tax situs of the trust, or the governing law of the trust.

SB384,108,21 d. Eliminate or modify the interests of a beneficiary, add a new beneficiary or class of beneficiaries, or select a beneficiary from an indefinite class.

SB384,108,22 e. Modify the terms of a power of appointment granted under the trust.

SB384,108,24 f. Remove, replace, or appoint a trustee, trust protector, or directing party or a successor trustee, trust protector, or directing party.

SB384,108,25 g. Terminate the trust.

SB384,109,1 h. Appoint assets to a new trust under s. 701.0418.

SB384,109,3 i. Advise the trustee on matters concerning a beneficiary, including whether to provide information to a beneficiary under s. 701.0813.

SB384,109,5 j.   Correct errors or ambiguities in the terms of the trust that might otherwise require court construction or defeat the settlor's intent.

SB384,109,8 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.

SB384,109,11 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.

SB384,109,14 (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.

SB384,109,18 (3) Trust protector duties. (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.