701.1317(1)(1) Except as otherwise provided in this section, a 2nd-trust instrument may not relieve an authorized fiduciary from liability for breach of trust to a greater extent than the first-trust instrument unless any of the following applies:

701.1317(1)(a)(a) All the qualified beneficiaries of the 2nd trust consent to the relief from liability in a signed record.

701.1317(1)(b)(b) The relief from liability is approved by the court.

701.1317(2)(2) A 2nd-trust instrument may provide for indemnification of an authorized fiduciary of the first trust or another person acting in a fiduciary capacity under the first trust for any liability or claim that would have been payable from the first trust if the decanting power had not been exercised.

701.1317(4)(4) Subject to sub. (3), a 2nd-trust instrument may divide and reallocate fiduciary powers among fiduciaries, including one or more trustees, directing parties, trust protectors, or other persons, and relieve a fiduciary from liability for an act or failure to act of another fiduciary as permitted by law of this state other than this subchapter.

701.1318(1)(1) An authorized fiduciary may not exercise the decanting power to modify a provision in a first-trust instrument granting another person power to remove or replace the fiduciary unless any of the following applies:

701.1318(1)(a)(a) The person holding the power consents to the modification in a signed record and the modification applies only to the person.

701.1318(1)(b)(b) The person holding the power and the qualified beneficiaries of the 2nd trust consent to the modification in a signed record and the modification grants a substantially similar power to another person.

701.1318(1)(c)(c) The court approves the modification and the modification grants a substantially similar power to another person.

701.1318(2)(2) This section does not apply to a decanting from a first trust that is a pooled trust described in 42 USC 1396p (d) (4) (C), or to a decanting to a 2nd trust that is a pooled trust described in 42 USC 1396p (d) (4) (C).

701.1319(1)(a)(a) “Grantor trust” means a trust as to which a settlor of a first trust is considered the owner under sections 671 to 677 of the Internal Revenue Code or section 679 of the Internal Revenue Code.

701.1319(1)(b)(b) “Nongrantor trust” means a trust that is not a grantor trust.

701.1319(1)(c)(c) “Qualified benefits property” means property subject to the minimum distribution requirements of section 401 (a) (9) of the Internal Revenue Code, and any applicable regulations, or to any similar requirements that refer to section 401 (a) (9) of the Internal Revenue Code or the regulations.

701.1319(2)(a)(a) If a first trust contains property that qualified, or would have qualified but for provisions of this subchapter other than this section, for a marital deduction for purposes of the gift or estate tax under the Internal Revenue Code or a state gift, estate, or inheritance tax, the 2nd-trust instrument must not include or omit any term that, if included in or omitted from the trust instrument for the trust to which the property was transferred, would have prevented the transfer from qualifying for the deduction, or would have reduced the amount of the deduction, under the same provisions of the Internal Revenue Code or state law under which the transfer qualified.

701.1319(2)(b)(b) If the first trust contains property that qualified, or would have qualified but for provisions of this subchapter other than this section, for a charitable deduction for purposes of the income, gift, or estate tax under the Internal Revenue Code or a state income, gift, estate, or inheritance tax, the 2nd-trust instrument must not include or omit any term that, if included in or omitted from the trust instrument for the trust to which the property was transferred, would have prevented the transfer from qualifying for the deduction, or would have reduced the amount of the deduction, under the same provisions of the Internal Revenue Code or state law under which the transfer qualified.

701.1319(2)(c)(c) If the first trust contains property that qualified, or would have qualified but for provisions of this subchapter other than this section, for the exclusion from the gift tax described in section 2503 (b) of the Internal Revenue Code, the 2nd-trust instrument must not include or omit a term that, if included in or omitted from the trust instrument for the trust to which the property was transferred, would have prevented the transfer from qualifying under section 2503 (b) of the Internal Revenue Code. If the first trust contains property that qualified, or would have qualified but for provisions of this subchapter other than this section, for the exclusion from the gift tax described in the Internal Revenue Code section 2503 (b) by application of section 2503 (c) of the Internal Revenue Code, the 2nd-trust instrument must not include or omit a term that, if included or omitted from the trust instrument for the trust to which the property was transferred, would have prevented the transfer from qualifying under section 2503 (c) of the Internal Revenue Code.

701.1319(2)(d)(d) If the property of the first trust includes shares of stock in an S corporation, as defined in section 1361 of the Internal Revenue Code, and the first trust is, or but for provisions of this subchapter other than this section would be, a permitted shareholder under any provision of section 1361 of the Internal Revenue Code, an authorized fiduciary may exercise the power with respect to part or all of the S-corporation stock only if any 2nd trust receiving the stock is a permitted shareholder under section 1361 (c) (2) of the Internal Revenue Code. If the property of the first trust includes shares of stock in an S corporation and the first trust is, or but for provisions of this subchapter other than this section would be, a qualified subchapter S trust within the meaning of section 1361 (d) of the Internal Revenue Code, the 2nd-trust instrument must not include or omit a term that prevents the 2nd trust from qualifying as a qualified subchapter S trust.

701.1319(2)(e)(e) If the first trust contains property that qualified, or would have qualified but for provisions of this subchapter other than this section, for a zero inclusion ratio for purposes of the generation-skipping transfer tax under section 2642 (c) of the Internal Revenue Code, the 2nd-trust instrument must not include or omit a term that, if included in or omitted from the first-trust instrument, would have prevented the transfer to the first trust from qualifying for a zero inclusion ratio under section 2642 (c) of the Internal Revenue Code.

701.1319(2)(f)(f) If the first trust is directly or indirectly the beneficiary of qualified benefits property, the 2nd-trust instrument may not include or omit any term that, if included in or omitted from the first-trust instrument, would have increased the minimum distributions required with respect to the qualified benefits property under section 401 (a) (9) of the Internal Revenue Code and any applicable regulations, or any similar requirements that refer to section 401 (a) (9) of the Internal Revenue Code or the regulations. If an attempted exercise of the decanting power violates this paragraph, the trustee is deemed to have held the qualified benefits property and any reinvested distributions of the property as a separate share from the date of the exercise of the power and s. 701.1322 applies to the separate share.

701.1319(2)(g)(g) If the first trust qualifies as a grantor trust because of the application of section 672 (f) (2) (A) of the Internal Revenue Code, the 2nd trust may not include or omit a term that, if included in or omitted from the first-trust instrument, would have prevented the first trust from qualifying under section 672 (f) (2) (A) of the Internal Revenue Code.