SB759: Bill Text

SB759,40,23 701.0702 (3) A court may not require a bond from a trust company bank, state bank, or national bank that is authorized to exercise trust powers and that has complied with s. 220.09 or 223.02 nor shall a bond be required of a religious, charitable, or educational corporation or society.

SB759,94 Section 94 . 701.0704 (1) (g) of the statutes is created to read:

SB759,40,25 701.0704 (1) (g) Any other event occurs resulting in no person acting as trustee.

SB759,95 Section 95. 701.0706 (2) (c) of the statutes is amended to read:

SB759,41,4 701.0706 (2) (c) The court determines that removal Removal of the trustee best serves the interests of the beneficiaries is appropriate because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively.

SB759,96 Section 96 . 701.0706 (2) (d) of the statutes is amended to read:

SB759,41,10 701.0706 (2) (d) There has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that the removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.

SB759,97 Section 97 . 701.0707 (2) of the statutes is amended to read:

SB759,41,16 701.0707 (2) A trustee who has resigned or been removed shall proceed expeditiously within a reasonable time to deliver the trust property within the trustee's possession to the cotrustee, successor trustee, or other person entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes.

SB759,98 Section 98 . 701.0802 (5) of the statutes is renumbered 701.0802 (5) (a).

SB759,99 Section 99 . 701.0802 (5) (b) of the statutes is created to read:

SB759,42,3 701.0802 (5) (b) A trust company acting in any fiduciary capacity with respect to a trust may purchase any service or product, including insurance or securities underwritten or otherwise distributed by the trust company or by an affiliate, through or directly from the trust company or an affiliate of a syndicate or selling group that includes the trust company of an affiliate, provided the purchase otherwise complies with the prudent investor rule in s. 881.01 and with s. 881.015. Compensation for the service or product must be reasonable and not prohibited by the instrument governing the fiduciary relationship. The compensation for the service or product may be in addition to the compensation that the trust company is otherwise entitled to receive.

SB759,100 Section 100 . 701.0802 (9) of the statutes is created to read:

SB759,42,9 701.0802 (9) A trustee is not liable for releasing information, including a copy of all or any portion of the trust instrument, to any deceased settlor's heir-at-law or other person indicating that the person is not a beneficiary of the trust if the trustee reasonably believes that doing so will not harm the beneficiaries of the trust and that doing so will reduce the likelihood of litigation involving the trust.

SB759,101 Section 101 . 701.0813 (1), (2) (d) and (3) (a) (intro.) of the statutes are amended to read:

SB759,42,17 701.0813 (1) A trustee shall keep the distributees or permissible distributees of trust income or principal, current beneficiaries and other qualified presumptive remainder beneficiaries who so request, reasonably informed about the administration of the trust. Unless unreasonable under the circumstances, a trustee shall promptly respond to a qualified beneficiary's request for information related to the administration of the trust.

SB759,42,21 (2) (d) Notify the distributees or permissible distributees of trust income or principal, current beneficiaries and other qualified presumptive remainder beneficiaries who so request, of any change in the method or rate of the trustee's compensation.

SB759,42,25 (3) (a) (intro.) At Subject to par. (c), at least annually and upon the termination of a trust, a trustee shall send to the distributees or permissible distributees of trust income or principal, current beneficiaries and to other qualified presumptive remainder beneficiaries who request it, all of the following:

SB759,102 Section 102. 701.0813 (2) (a) of the statutes is amended to read:

SB759,43,6 701.0813 (2) (a) Upon the request of a qualified beneficiary for a copy of the trust instrument, promptly furnish to the qualified beneficiary either a copy of the portions of the trust instrument relating to the interest of the qualified beneficiary or a copy of the trust instrument or, upon the request of a settlor for a copy of the trust instrument, promptly furnish to the settlor a copy of the trust instrument.

SB759,103 Section 103 . 701.0813 (3) (b) of the statutes is amended to read:

SB759,43,13 701.0813 (3) (b) Upon Subject to par. (c), upon a vacancy in a trusteeship, unless a cotrustee remains in office, the former trustee shall send a report containing the information described under par. (a) 1. to the qualified beneficiaries. A personal representative or guardian may send the qualified beneficiaries a report containing the information described in par. (a) 1. on behalf of a deceased or incapacitated trustee.

SB759,104 Section 104 . 701.0813 (3) (c) of the statutes is created to read:

SB759,43,17 701.0813 (3) (c) A trustee may limit the report to a qualified beneficiary of a specific dollar amount or specific property to information that relates to the specific dollar amount or specific property.

SB759,105 Section 105 . 701.0813 (5) of the statutes is amended to read:

SB759,43,21 701.0813 (5) Subsections (2) (b) and , (c), and (d) and (3) do not apply to a trustee who accepts a trusteeship before July 1, 2014, to an irrevocable trust created before July 1, 2014, or to a revocable trust that becomes irrevocable before July 1, 2014.

SB759,106 Section 106 . 701.0813 (6) and (7) of the statutes are created to read:

SB759,43,25 701.0813 (6) The trustee has no duty to provide information about the administration of the trust to the settlor, but the trustee may provide such information if the trustee chooses to do so.

SB759,44,9 (7) The trust instrument may expand, restrict, eliminate, or otherwise vary the right of a beneficiary or class of beneficiaries to be informed of the beneficiary's interest in a trust or to receive any or all information concerning the trust, and may do so for any period of time, including for the lifetime of a beneficiary or a class of beneficiaries. If there is no current acting representative of such a beneficiary or class of beneficiaries in accordance with the trust instrument, and a provision to appoint such a representative is not provided for in the trust instrument, the trustee may appoint a representative for a beneficiary or class of beneficiaries whose rights to information have been restricted or eliminated by the trust instrument.

SB759,107 Section 107 . 701.0815 (3) of the statutes is created to read:

SB759,44,12 701.0815 (3) A trustee has no power to give warranties in a sale, mortgage, or lease that are binding on the trustee personally.

SB759,108 Section 108 . 701.0816 (29) of the statutes is created to read:

SB759,44,15 701.0816 (29) Fund a trust or account that meets the requirements under 42 USC 1396p (d) (4) (A) or (C) for the benefit of an individual with a disability.

SB759,109 Section 109 . 701.0816 (30) of the statutes is created to read:

SB759,44,18 701.0816 (30) Fund an account that is part of an ABLE program under section 529A of the Internal Revenue Code for a beneficiary's benefit.

SB759,110 Section 110 . 701.0817 (3) (b) of the statutes is amended to read:

SB759,44,22 701.0817 (3) (b) The beneficiary, at the time of the release, did not know of the beneficiary's rights or have a reasonable opportunity to know of the material facts relating to the breach.

SB759,111 Section 111 . 701.0818 (2) (b) 2. h. of the statutes is repealed and recreated to read:

SB759,45,3 701.0818 (2) (b) 2. h. Exercise a decanting power under subch. XIII or direct an authorized fiduciary, as defined in s. 701.1302 (1), to exercise a decanting power under subch. XIII.

SB759,112 Section 112 . 701.1005 (1) of the statutes is amended to read:

SB759,45,10 701.1005 (1) A beneficiary may not commence a proceeding against a trustee for breach of trust more than one year after the earlier of either the date on which the beneficiary or a representative of the beneficiary waived the right to a report under s. 701.0813 (4) or the date on which the beneficiary or a representative of the beneficiary was sent a report or other record that adequately disclosed the existence of a potential claim for breach of trust.

SB759,113 Section 113 . 701.1005 (2) of the statutes is amended to read:

SB759,45,15 701.1005 (2) A report or other record adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence.

SB759,114 Section 114 . 701.1009 (2) of the statutes is amended to read:

SB759,45,19 701.1009 (2) At the time of the consent, release, or ratification, the beneficiary did not have knowledge or a reasonable opportunity to obtain knowledge of the beneficiary's rights or of the material facts relating to the breach.

SB759,115 Section 115 . 701.1105 (1) (b) of the statutes is amended to read:

SB759,45,22 701.1105 (1) (b) Is given in the manner provided in ch. 879, except that notice by publication is not required s. 701.0109.

SB759,116 Section 116 . 701.1136 (1) of the statutes is amended to read:

SB759,46,4 701.1136 (1) Distribution of income. Except as otherwise determined by the trustee or a court under s. 701.1106 with respect to unitrust distributions, if a beneficiary is entitled to receive income from a trust, but the trust instrument fails to specify how frequently it is to be paid a current beneficiary is to receive income from the trust, the trustee shall distribute at least annually the income to which such the current beneficiary is entitled at least annually.

SB759,117 Section 117 . Subchapter XIII of chapter 701 [precedes 701.1301] of the statutes is created to read:

SB759,46,7 CHAPTER 701

SB759,46,9 SUBCHAPTER XIII Uniform trust decanting act

SB759,46,11 701.1301 Short title. This subchapter may be cited as the Uniform Trust Decanting Act.

SB759,46,12 701.1302 Definitions. In this subchapter:

SB759,46,13 (1) “Authorized fiduciary” means any of the following:

SB759,46,16 (a) A trustee, a directing party, or another fiduciary, other than a settlor, that has discretion to distribute or direct a trustee to distribute part or all of the principal of the first trust to one or more current beneficiaries.

SB759,46,17 (b) A special fiduciary appointed under s. 701.1309.

SB759,46,18 (c) A special-needs fiduciary under s. 701.1313.

SB759,46,20 (d) A trust protector who has been granted a decanting power, which may be exercised in a fiduciary or nonfiduciary capacity, under s. 701.0818 (2) (b) 2. h.

SB759,46,23 (2) “Decanting power” means the power of an authorized fiduciary under this subchapter to distribute property of a first trust to one or more 2nd trusts or to modify the terms of the first trust.

SB759,47,3 (3) “Expanded distributive discretion” means a discretionary power of distribution that is not limited to an ascertainable standard or a reasonably definite standard.

SB759,47,5 (4) “First trust” means a trust over which an authorized fiduciary may exercise the decanting power.

SB759,47,6 (5) “First-trust instrument” means the trust instrument for a first trust.

SB759,47,10 (6) “Reasonably definite standard” means a clearly measurable standard under which a holder of a power of distribution is legally accountable within the meaning of section 674 (b) (5) (A) of the Internal Revenue Code and any applicable regulations.

SB759,47,11 (7) “Second trust” means any of the following:

SB759,47,12 (a) A first trust after modification under this subchapter.

SB759,47,14 (b) A trust to which a distribution of property from a first trust is or may be made under this subchapter.

SB759,47,15 (8) “Second-trust instrument” means the trust instrument for a 2nd trust.

SB759,47,18 701.1303 Scope. (1) Except as otherwise provided in subs. (2) and (3), this subchapter applies to an express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or a person holding an adverse interest.

SB759,47,19 (2) This subchapter does not apply to a trust held solely for charitable purposes.

SB759,47,21 (3) Subject to s. 701.1315, a trust instrument may restrict or prohibit exercise of the decanting power.

SB759,47,25 (4) This subchapter does not limit the power of an authorized fiduciary or other person to distribute or appoint property in further trust or to modify a trust under the trust instrument, law of this state other than this subchapter, common law, a court order, or a nonjudicial settlement agreement.

SB759,48,3 (5) This subchapter does not affect the ability of a settlor to provide in a trust instrument for the distribution of the trust property or appointment in further trust of the trust property or for modification of the trust instrument.

SB759,48,11 701.1304 Fiduciary duty. (1) In exercising the decanting power, an authorized fiduciary shall act in accordance with its fiduciary duties, including the duty to act in accordance with the purposes of the first trust. If a trustee or other authorized fiduciary is directed by another authorized fiduciary to exercise the decanting power, the trustee or other directed authorized fiduciary shall act to comply with the exercise of the decanting power and the trustee or other directed authorized fiduciary shall not be liable for the action regardless of any fiduciary duty that the trustee or other directed authorized fiduciary might otherwise have.

SB759,48,13 (2) This subchapter does not create or imply a duty to exercise the decanting power or to inform beneficiaries about the applicability of this subchapter.

SB759,48,16 (3) Except as otherwise provided in a first-trust instrument, for purposes of this subchapter and ss. 701.0801 and 701.0802 (2), the terms of the first trust are deemed to include the decanting power.

SB759,48,19 701.1305 Application; governing law. This subchapter applies to a trust created before, on, or after the effective date of this section .... [LRB inserts date], if any of the following applies:

SB759,48,21 (1) The trust has its principal place of administration in this state, including a trust whose principal place of administration has been changed to this state.

SB759,48,23 (2) The trust provides by its trust instrument that it is governed by the law of this state or is governed by the law of this state for the purpose of any of the following:

SB759,48,25 (a) Administration, including administration of a trust whose governing law for purposes of administration has been changed to the law of this state.

SB759,49,1 (b) Construction of terms of the trust.

SB759,49,2 (c) Determining the meaning or effect of terms of the trust.

SB759,49,7 701.1306 Reasonable reliance. A trustee or other person that reasonably relies on the validity of a distribution of part or all of the property of a trust to another trust, or a modification of a trust, under this subchapter, law of this state other than this subchapter, or the law of another jurisdiction is not liable to any person for any action or failure to act as a result of the reliance.

SB759,49,10 701.1307 Notice; exercise of decanting power. (1) In this section, a notice period begins on the day notice is given under sub. (3) and ends 30 days after the day notice is given.

SB759,49,13 (2) Except as otherwise provided in this subchapter, an authorized fiduciary may exercise the decanting power without the consent of any person and without court approval.

SB759,49,16 (3) Except as otherwise provided in sub. (6), an authorized fiduciary shall give notice of the intended exercise of the decanting power not later than 30 days before the exercise to all of the following:

SB759,49,17 (a) Each settlor of the first trust, if living or then in existence.

SB759,49,18 (b) Each qualified beneficiary of the first trust.

SB759,49,20 (c) Each holder of a presently exercisable power of appointment over any part or all of the first trust.