This is the preview version of the Wisconsin State Legislature site.
Please see http://docs.legis.wisconsin.gov for the production version.
Under current law, a trustee may only transfer assets to a second trust with
court approval or through a notice procedure. The current notice procedure requires
giving notice to the settlor, beneficiaries, and certain powerholders of a trust 30 days
prior to transferring assets from that first trust to a second trust. The bill requires

a similar 30-day notice for exercise of the decanting power, but requires notice to be
provided to additional powerholders and fiduciaries of the first trust as well as
powerholders and fiduciaries of the second trust and, for certain trusts with a
charitable interest, the attorney general. Under the bill, an exercise of the decanting
power is effective if the authorized fiduciary acted with reasonable care to comply
with the notice requirement, even if the fiduciary failed to provide notice to every
person entitled to notice.
In addition, under current law, a trustee may not appoint assets to a second
trust if a contribution to the first trust qualified for a marital or charitable deduction
for federal income, gift, or estate tax purposes and the second trust would prevent
the asset from qualifying for the deduction or reduce the amount of the deduction.
The bill retains this prohibition and expands it to other tax benefits, including
deductions for state income, gift, estate, and inheritance taxes and any tax benefit
for which a first trust is clearly designed to qualify. The bill also prohibits the use
of the decanting power to 1) increase an authorized fiduciary's compensation, 2)
relieve an authorized fiduciary from liability for breach of trust in a second-trust
instrument to a greater extent than in the first-trust instrument, or 3) reduce the
aggregate fiduciary liability of all fiduciaries of a second trust without court approval
or the consent of all of the qualified beneficiaries of a second trust.
The bill includes additional provisions about the decanting power for certain
types of trusts. Specifically, in a trust that has a beneficiary with a disability, an
authorized fiduciary may exercise the decanting power if the second trust is a special
needs trust that benefits the beneficiary with a disability and the authorized
fiduciary determines that exercise of the decanting power will further the purposes
of the first trust. Under the bill, a “special needs trust” means a trust that the trustee
believes would not be considered a resource for purposes of determining whether a
beneficiary with a disability is eligible for governmental benefits based on disability.
Also, if a first trust contains a charitable interest, a second trust may not diminish
the charitable interest, diminish the interest of an identified charitable organization
that holds the charitable interest, alter any charitable purpose stated in the
first-trust instrument, or alter any condition or restriction related to the charitable
interest. In addition, the bill specifies that the decanting power may be exercised
over an animal trust. An “animal trust” is defined under the bill as a trust created
to provide for the care of an animal that has a person appointed to enforce the trust
on behalf of the animal. If a first trust is an animal trust, a second trust must provide
that trust property may be applied only to its intended purpose for the period the first
trust benefitted the animal.
If the trust instrument for a second trust does not comply with all of the
requirements of the UTDA but the exercise of the decanting power would otherwise
be effective, then 1) any provision that is included in the second-trust instrument
in violation of the UTDA is void and 2) any provision omitted from the second-trust
instrument in violation of the UTDA is deemed to be included in the second-trust
instrument.

Uniform Powers of Appointment Act
The bill adopts the Uniform Powers of Appointment Act. Under the bill, a
“power of appointment” means a power that enables a powerholder acting in a
nonfiduciary capacity to designate a recipient of an ownership interest in or another
power of appointment over the appointive property. A power of appointment is
created only if the instrument creating the power governs the disposition of the
appointive property and the terms of the instrument manifest the donor's intention
to create in a powerholder a power of appointment over the appointive property
exercisable in favor of a permissible appointee. Under the bill, unless the terms of
the instrument creating the power of appointment state otherwise, a power of
appointment is presumed to be a presently exercisable power of appointment, an
exclusionary power of appointment, and a general power of appointment. An
“exclusionary power of appointment” means a power of appointment exercisable in
favor of one or more permissible appointees to the exclusion of the other permissible
appointees. A “general power of appointment” means a power of appointment
exercisable in favor of the powerholder, the powerholder's estate, a creditor of the
powerholder, or a creditor of the powerholder's estate. The bill provides, however,
that a power of appointment is presumed to be a nongeneral power of appointment
if the power is exercisable only at the powerholder's death and the permissible
appointees of the power are a defined and limited class that does not include the
powerholder's estate, the powerholder's creditors, or the creditors of the
powerholder's estate.
Under the bill, a power of appointment is exercised only if the instrument
exercising the power is valid under law, the terms of the instrument manifest the
powerholder's intent to exercise the power, and the instrument satisfies any
requirements of exercise imposed by the donor, if any. If a power of appointment is
vested in two or more persons, then the powerholders may only exercise the power
of appointment unanimously. Under the bill, a powerholder may exercise their
power of appointment by including a residuary clause in the powerholder's will, or
a comparable clause in the powerholder's revocable trust, if the will or trust
instrument manifests intent to do so, the power of appointment is a general power
of appointment, there is no gift-in-default clause in the instrument creating the
power of appointment, and the powerholder did not previously release the power of
appointment.
If the powerholder releases or fails to exercise a general power of appointment,
the bill provides that the gift-in-default clause controls the unappointed property
or, if there is no gift-in-default clause, the bill provides default rules for how the
unappointed property is disposed. A personal representative, trustee, or other
fiduciary who holds property subject to a power of appointment may administer the
appointive property as if the power of appointment was not exercised if the personal
representative, trustee, or other fiduciary has no notice of the existence of any
documentation of the powerholder purporting to exercise the power of appointment
by will or otherwise within six months after the death of the powerholder.

Classification of digital property as individual property
The bill establishes an exception to Wisconsin's general marital property law,
allowing digital property to be classified as individual property if the property meets
certain criteria. Under the bill, an account and the digital property held in an
account, including the content of electronic communications such as personal email,
that is created and maintained for personal use is classified as individual property,
unless either the account or the digital property in the account was not originally
created, purchased, or otherwise acquired exclusively for the personal, noneconomic
purposes of the account holder, or the account or the digital property in the account
has at any time been used for purposes other than the personal, noneconomic
purposes of the spouse holding the account. Under the bill, in the event of a sale,
exchange, or other disposition, all property received in exchange for that account, or
the digital property in the account, is classified as marital property; and, further,
income during marriage and after the determination date attributable to the
account, or the digital property in the account, is classified as marital property.
Disclosure of digital property
Under current law, a user may use an online tool to direct a custodian of digital
property to disclose or not to disclose to a designated recipient some or all of the user's
digital property in certain circumstances. If an online tool allows the user to modify
or delete a direction at all times, a direction regarding disclosure using an online tool
overrides a contrary direction by the user in a will, trust, power of attorney, or any
other governing instrument. If a user has not used an online tool or if the custodian
has not provided an online tool, the user may allow or prohibit disclosure to a
fiduciary of some or all of the user's digital property, including the content of
electronic communications sent or received by the user, in a will, trust, power of
attorney, or any other governing instrument.
The bill provides that a user may allow or prohibit the disclosure to a fiduciary
of some or all of the user's digital property in a consent instrument. A consent
instrument is defined as a written notarized document in physical or electronic form
evidencing the user's consent to the disclosure of the contents of electronic
communications to a then acting fiduciary. However, a direction regarding
disclosure using an online tool overrides a contrary direction by the user in a consent
instrument in the same way that an online tool overrides a will, trust, power of
attorney, or other governing instrument under current law.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB759,1 1Section 1 . 30.541 (3) (d) 1. a. of the statutes is amended to read:
SB759,8,5
130.541 (3) (d) 1. a. Evidence satisfactory to the department of the appointment
2of a trustee in bankruptcy, of a certification of trust under s. 701.1013 or the
3appointment of a trustee,
or of the issuance of domiciliary letters testamentary or
4other letters authorizing the administration of a decedent's estate, letters of
5guardianship, conservatorship, special administration, or letters of trust.
SB759,2 6Section 2 . 101.9211 (4) (a) 1. of the statutes is amended to read:
SB759,8,117 101.9211 (4) (a) 1. Evidence satisfactory to the department of the appointment
8of a trustee in bankruptcy, of a certification of trust under s. 701.1013 or the
9appointment of a trustee,
or of the issuance of domiciliary letters testamentary or
10other letters authorizing the administration of a decedent's estate, letters of
11guardianship, conservatorship, special administration, or letters of trust.
SB759,3 12Section 3 . 342.17 (4) (a) 1. of the statutes is amended to read:
SB759,8,1913 342.17 (4) (a) 1. Evidence satisfactory to the department of the issuance of the
14letters testamentary or other letters authorizing the administration of an estate
,
15letters of guardianship, or letters of trust,
appointment of a trustee in bankruptcy,
16of a certification of trust under s. 701.1013 or the appointment of a testamentary
17trustee,
or of the appointment of the trustee in bankruptcy issuance of domiciliary
18letters or other letters authorizing the administration of a decedent's estate,
19guardianship, conservatorship, special administration, or trust
;
SB759,4 20Section 4 . 700.16 (1) (c) of the statutes is amended to read:
SB759,9,421 700.16 (1) (c) If a future interest or trust is created by exercise of a power of
22appointment, the permissible period is computed from the time the power of
23appointment is exercised if the power of appointment is a general power of
24appointment, as defined in s. 702.02 (5) 702.102 (7), even if the general power of
25appointment is exercisable only by will. In the case of other powers of appointment

1the permissible period is computed from the time the power of appointment is created
2but facts at the time the power of appointment is exercised are considered in
3determining whether the power of alienation is suspended beyond a life or lives in
4being at the time of creation of the power of appointment plus 30 years.
SB759,5 5Section 5 . 700.27 (1) (d) of the statutes is amended to read:
SB759,9,76 700.27 (1) (d) “Power of appointment" has the meaning given in s. 702.02 (6)
7702.102 (14).
SB759,6 8Section 6 . 701.0102 (12m) of the statutes is created to read:
SB759,9,109 701.0102 (12m) An account that is part of a qualified ABLE program under
10section 529A (b) of the Internal Revenue Code.
SB759,7 11Section 7 . 701.0103 (1m) of the statutes is created to read:
SB759,9,1412 701.0103 (1m) “Animal protector” means a person appointed in an animal trust
13to enforce the trust on behalf of the animal or, if no such person is appointed in the
14trust, a person appointed by the court for that purpose.
SB759,8 15Section 8 . 701.0103 (1n) of the statutes is created to read:
SB759,9,1716 701.0103 (1n) “Animal trust” means a trust or an interest in a trust created to
17provide for the care of one or more animals.
SB759,9 18Section 9 . 701.0103 (3) (c) of the statutes is created to read:
SB759,9,2019 701.0103 (3) (c) Is an identified charitable organization that will or may receive
20distributions under the terms of the trust.
SB759,10 21Section 10 . 701.0103 (3m) of the statutes is created to read:
SB759,9,2322 701.0103 (3m) “Broad limited power of appointment” has the meaning given
23in s. 702.102 (4).
SB759,11 24Section 11 . 701.0103 (3r) of the statutes is created to read:
SB759,10,2
1701.0103 (3r) “Charitable interest” means an interest in a trust that satisfies
2any of the following:
SB759,10,43 (a) It is held by an identified charitable organization and makes the
4organization a qualified beneficiary.
SB759,10,75 (b) It benefits only charitable organizations and, if the interest were held by an
6identified charitable organization, would make the organization a qualified
7beneficiary.
SB759,10,108 (c) It is held solely for charitable purposes and, if the interest were held by an
9identified charitable organization, would make the organization a qualified
10beneficiary.
SB759,12 11Section 12 . 701.0103 (3u) of the statutes is created to read:
SB759,10,1212 701.0103 (3u) “Charitable organization” means any of the following:
SB759,10,1413 (a) A person, other than an individual, organized and operated exclusively for
14charitable purposes.
SB759,10,1615 (b) A government or governmental subdivision, agency, or instrumentality, to
16the extent it holds funds exclusively for a charitable purpose.
SB759,13 17Section 13 . 701.0103 (3x) of the statutes is created to read:
SB759,10,2118 701.0103 (3x) “Charitable purpose” means the relief of poverty, the
19advancement of education or religion, the promotion of health, a municipal or other
20governmental purpose, or another purpose the achievement of which is beneficial to
21the community.
SB759,14 22Section 14 . 701.0103 (4) of the statutes is amended to read:
SB759,10,2523 701.0103 (4) “Charitable trust" means a trust, or portion of a trust, created for
24a charitable purpose described in s. 701.0405 (1). This subsection does not apply in
25s. 701.1201.
SB759,15
1Section 15. 701.0103 (5g) of the statutes is created to read:
SB759,11,22 701.0103 (5g) “Court” means the court that is identified in s. 701.0203 (1).
SB759,16 3Section 16 . 701.0103 (5w) of the statutes is created to read:
SB759,11,74 701.0103 (5w) “Current beneficiary” means a beneficiary that on the date the
5beneficiary's qualification is determined is a distributee or permissible distributee
6of trust income or principal or is the holder of a presently exercisable general power
7of appointment.
SB759,17 8Section 17 . 701.0103 (9) of the statutes is amended to read:
SB759,11,109 701.0103 (9) “General power of appointment" has the meaning given in s.
10702.02 (5) 702.102 (7).
SB759,18 11Section 18 . 701.0103 (11p) of the statutes is created to read:
SB759,11,1612 701.0103 (11p) “Identified charitable organization” means a charitable
13organization that is expressly designated to receive distributions under the terms of
14a charitable trust and that is not subject to a right of substitution by the settlor or
15by any other party prior to the charitable organization becoming a current
16beneficiary.
SB759,19 17Section 19 . 701.0103 (15m) of the statutes is created to read:
SB759,11,1818 701.0103 (15m) “Issue” has the meaning given in s. 851.13.
SB759,20 19Section 20 . 701.0103 (18) of the statutes is amended to read:
SB759,11,2120 701.0103 (18) “Power of appointment" has the meaning given in s. 702.02 (6)
21702.102 (14).
SB759,21 22Section 21 . 701.0103 (19m) of the statutes is created to read:
SB759,11,2323 701.0103 (19m) “Powerholder” has the meaning given in s. 702.102 (15).
SB759,22 24Section 22 . 701.0103 (19r) of the statutes is created to read:
SB759,12,2
1701.0103 (19r) “Presently exercisable power of appointment” has the meaning
2given in s. 702.102 (16).
SB759,23 3Section 23 . 701.0103 (19v) of the statutes is created to read:
SB759,12,84 701.0103 (19v) “Presumptive remainder beneficiary” means, without
5considering the existence or exercise of a power of appointment, other than a power
6of appointment that has been irrevocably exercised and notice of the exercise has
7been given to the trustee, a beneficiary that on the date the beneficiary's qualification
8is determined, would be any of the following:
SB759,12,119 (a) A distributee or permissible distributee of trust income or principal if the
10interests of any current beneficiary terminated on that date without causing the
11trust to terminate.
SB759,12,1312 (b) A distributee or permissible distributee of trust income or principal if the
13trust terminated on that date.
SB759,12,1614 (c) If the terms of the trust do not provide for its termination, a distributee or
15permissible distributee of income or principal of the trust if all the current
16beneficiaries of the trust were deceased or no longer exist.
SB759,24 17Section 24 . 701.0103 (21) (intro.) of the statutes is amended to read:
SB759,12,2018 701.0103 (21) (intro.) “Qualified beneficiary" means a beneficiary who that, on
19the date on which the beneficiary's qualification is determined, satisfies is any of the
20following:
SB759,25 21Section 25 . 701.0103 (21) (a) and (b) of the statutes are repealed and recreated
22to read:
SB759,12,2323 701.0103 (21) (a) A current beneficiary.
SB759,12,2424 (b) A presumptive remainder beneficiary.
SB759,26 25Section 26 . 701.0103 (21m) of the statutes is created to read:
SB759,13,3
1701.0103 (21m) “Record” means information that is inscribed on a tangible
2medium or that is stored in an electronic or other medium and is retrievable in
3perceivable form.
SB759,27 4Section 27 . 701.0103 (23) of the statutes is amended to read:
SB759,13,105 701.0103 (23) “Settlor" Except as otherwise provided in ss. 701.0113 and
6701.1325, “settlor”
means a person, including a testator, who creates or contributes
7property to a trust. If more than one person creates or contributes property to a trust,
8each person is a settlor of the portion of the trust property attributable to that
9person's contribution except to the extent another person has the power to revoke the
10trust or withdraw that portion.
SB759,28 11Section 28 . 701.0103 (23m) of the statutes is created to read:
SB759,13,1312 701.0103 (23m) “Sign” means, with present intent to authenticate or adopt a
13record, to do any of the following:
SB759,13,1414 (a) Execute or adopt a tangible symbol.
SB759,13,1615 (b) Attach to or logically associate with the record an electronic symbol, sound,
16or process.
SB759,29 17Section 29 . 701.0103 (24) of the statutes is renumbered 701.0103 (16m) and
18amended to read:
SB759,13,2019 701.0103 (16m) “Special “ Nongeneral power of appointment" has the meaning
20given in s. 702.02 (7) 702.102 (11).
SB759,30 21Section 30 . 701.0103 (27) of the statutes is amended to read:
SB759,13,2522 701.0103 (27) “Terms of a trust" means the manifestation of the settlor's intent
23regarding a trust's provisions as expressed in the trust instrument or, as may be
24established by other evidence that would be admissible in a judicial proceeding, or
25as may be established by court order or nonjudicial settlement agreement
.
SB759,31
1Section 31. 701.0103 (30) of the statutes is amended to read:
SB759,14,82 701.0103 (30) “Trust instrument" means an instrument, including any
3amendments or modifications to the instrument under s. 701.0111 or subch. IV, that
4is executed
a record signed by the settlor that contains terms of to create a trust or
5is created under a statute, judgment, or decree that orders property to be transferred
6to a trustee to be administered for the benefit of a beneficiary
, or by any person to
7create a 2nd trust as provided under subch. XIII, that contains some or all of the
8terms of the trust, and includes any amendments or modifications
.
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