701.1311(3)(3) Subject to s. 701.1313, in an exercise of the decanting power under this section, a 2nd trust may not do any of the following:

701.1311(3)(a)(a) Include as a current beneficiary a person that is not a current beneficiary of the first trust, except as otherwise provided in sub. (4).

701.1311(3)(b)(b) Include as a presumptive remainder beneficiary or successor beneficiary a person that is not a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the first trust, except as otherwise provided in sub. (4).

701.1311(3)(d)(d) Fail to be a trust described in 42 USC 1396p (d) (4) (A) or (C) if the first trust is a trust described in 42 USC 1396p (d) (4) (A) or (C).

701.1311(4)(4) Subject to sub. (3) (c) and s. 701.1314, in an exercise of the decanting power under this section, a 2nd trust may be a trust created or administered under the law of any jurisdiction and may do any of the following:

701.1311(4)(b)(b) Omit a power of appointment granted in the first trust, other than a presently exercisable general power of appointment.

701.1311(4)(c)(c) Create or modify a power of appointment if the powerholder is a current beneficiary of the first trust and the authorized fiduciary has expanded distributive discretion to distribute principal to the beneficiary.

701.1311(4)(d)(d) Create or modify a power of appointment if the powerholder is a presumptive remainder beneficiary or successor beneficiary of the first trust, but the exercise of the power may take effect only after the powerholder becomes, or would have become if then living, a current beneficiary.

701.1311(5)(5) A power of appointment described in sub. (4) (a) to (d) may be general or nongeneral. The class of permissible appointees in favor of which the power may be exercised may be broader than or different from the beneficiaries of the first trust.

701.1311(6)(6) If an authorized fiduciary has expanded distributive discretion over part but not all of the principal of a first trust, the fiduciary may exercise the decanting power under this section over that part of the principal over which the authorized fiduciary has expanded distributive discretion.

701.1312(1)(1) In this section, “limited distributive discretion” means a discretionary power of distribution that is limited to an ascertainable standard or a reasonably definite standard.

701.1312(2)(2) An authorized fiduciary that has limited distributive discretion over the principal of the first trust for the benefit of one or more current beneficiaries may exercise the decanting power over the principal of the first trust.

701.1312(3)(3) Under this section and subject to s. 701.1314, a 2nd trust may be created or administered under the law of any jurisdiction. Under this section, the 2nd trusts, in the aggregate, must grant each beneficiary of the first trust beneficial interests that are substantially similar to the beneficial interests of the beneficiary in the first trust.

701.1312(3m)(3m) Notwithstanding sub. (3), an authorized fiduciary exercising the decanting power under this section may grant to a beneficiary of the 2nd trust a testamentary power of appointment exercisable in favor of the creditors of the beneficiary’s estate, but only if the authorized fiduciary concludes the granting of such power will be unlikely to adversely affect the beneficial interest of the presumptive remainder beneficiaries of the first trust.

701.1312(4)(4) A power to make a distribution under a 2nd trust for the benefit of a beneficiary who is an individual is substantially similar to a power under the first trust to make a distribution directly to the beneficiary. A distribution is for the benefit of a beneficiary if any of the following applies:

701.1312(4)(b)(b) The beneficiary is under a legal disability or the trustee reasonably believes the beneficiary is incapacitated, and the distribution is made as permitted under this chapter.

701.1312(4)(c)(c) The distribution is made as permitted under the terms of the first-trust instrument and the 2nd-trust instrument for the benefit of the beneficiary.

701.1312(5)(5) If an authorized fiduciary has limited distributive discretion over part but not all of the principal of a first trust, the fiduciary may exercise the decanting power under this section over that part of the principal over which the authorized fiduciary has limited distributive discretion.

701.1313(1)(1) In this section:

701.1313(1)(a)(a) “Beneficiary with a disability” means a beneficiary of a first trust who the special-needs fiduciary believes in good faith is an individual with a disability.

701.1313(1)(b)(b) “Special-needs fiduciary” means, with respect to a trust that has a beneficiary with a disability, any of the following:

701.1313(1)(b)1.1. A trustee or other fiduciary, other than a settlor, that has discretion to distribute part or all of the principal of a first trust to one or more current beneficiaries.