Chapter 701

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.

701.0103(19v)(c) (c) If the terms of the trust do not provide for its termination, a distributee or permissible distributee of income or principal of the trust if all the current beneficiaries of the trust were deceased or no longer exist.

701.0103(20) (20) “Property” means anything that may be the subject of ownership, whether real or personal, legal or equitable, or digital property, as defined in s. 711.03 (10), or any interest therein.

701.0103(21) (21) “Qualified beneficiary” means a beneficiary that, on the date the beneficiary’s qualification is determined, is any of the following:

701.0103(21)(a) (a) A current beneficiary.

701.0103(21)(b) (b) A presumptive remainder beneficiary.

701.0103(21m) (21m) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

701.0103(22) (22) “Revocable,” as applied to a trust, means that the trust can be revoked by the settlor without the consent of the trustee or a person holding an adverse interest, regardless of whether the settlor is incapacitated.

701.0103(23) (23) Except as otherwise provided in ss. 701.0113 and 701.1325, “settlor” means a person, including a testator, who creates or contributes property to a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke the trust or withdraw that portion.

701.0103(23m) (23m) “Sign” means, with present intent to authenticate or adopt a record, to do any of the following:

701.0103(23m)(a) (a) Execute or adopt a tangible symbol.

701.0103(23m)(b) (b) Attach to or logically associate with the record an electronic symbol, sound, or process.

701.0103(25) (25) “Spendthrift provision” means a term of a trust that restrains either or both of a voluntary or involuntary transfer of a beneficiary’s interest.

701.0103(26) (26) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, any territory or insular possession subject to the jurisdiction of the United States, and an Indian tribe, band, or nation recognized by federal law or formally acknowledged by a state.

701.0103(27) (27) “Terms of a trust” means the manifestation of the settlor’s intent regarding a trust’s provisions as expressed in the trust instrument, as may be established by other evidence that would be admissible in a judicial proceeding, or as may be established by court order or nonjudicial settlement agreement.

701.0103(28) (28) “Trustee” includes an original, additional, and successor trustee, and a cotrustee.

701.0103(29) (29) “Trust for an individual with a disability” means a trust that is established for the benefit of an individual with a disability of any age, if the assets of the trust would not be counted as resources of the individual with a disability for purposes of eligibility for medical assistance under subch. IV of ch. 49, if he or she applied for medical assistance and was otherwise eligible.

701.0103(30) (30) “Trust instrument” means a record signed by the settlor to create a trust, or by any person to create a 2nd trust as provided under subch. XIII, that contains some or all of the terms of the trust, and includes any amendments or modifications.

701.0103(31) (31) “Trust protector” means a person who, in a trust instrument or court order, is granted a power, other than a power of appointment, in a capacity other than as a trustee or a directing party.

701.0103 History History: 2013 a. 92; 2015 a. 300; 2023 a. 127.

701.0103 Annotation Former sub. (27), 2015 stats., which defines the “terms of a trust,” does not purport to elevate the status of extrinsic evidence in the context of a trust agreement. Rather, it simply confirms the common law rules for interpreting trust agreements, directing courts to rely on the language of the agreement or other evidence that would be admissible in a judicial proceeding. Cohen v. Minneapolis Jewish Federation, 286 F. Supp. 3d 949 (2017).

701.0104 701.0104 Knowledge.

701.0104(1) (1) Subject to sub. (2), a person has knowledge of a fact if any of the following applies:

701.0104(1)(a) (a) The person has actual knowledge of the fact.

701.0104(1)(b) (b) The person has received a notice or notification of the fact.

701.0104(1)(c) (c) The person has reason to know the fact from all the facts and circumstances known to the person at the time in question.

701.0104(2) (2) An organization that conducts activities through employees has notice or knowledge of a fact involving a trust only from the time the information was received by an employee having responsibility to act for the trust, or would have been received by the employee if the organization had exercised reasonable diligence. An organization exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the employee having responsibility to act for the trust and there is reasonable compliance with the routines. Reasonable diligence does not require an employee of the organization to communicate information unless the communication is part of the individual’s regular duties or the individual knows a matter involving the trust would be materially affected by the information.

701.0104 History History: 2013 a. 92.

701.0105 701.0105 Default and mandatory rules.

701.0105(1) (1) Except as otherwise provided in the terms of the trust, this chapter governs the duties and powers of trustees, directing parties, and trust protectors; relations among trustees, directing parties, and trust protectors; and the rights and interests of beneficiaries.