Applicability of general transfers at death provisions.
GENERAL PROVISIONS AND DEFINITIONS
This chapter may be cited as the Wisconsin Trust Code.
History: 2013 a. 92
Estate Planning Metamorphosis: Wisconsin's New Trust Code. Schultz & Weinsch. Wis. Law. June 2014.
This chapter applies to express, charitable or noncharitable, and testamentary or living trusts, and any trust created pursuant to a statute, judgment, or decree that requires the trust to be administered in the manner of an express trust. This chapter does not apply to any of the following:
A custodial arrangement made pursuant to the Uniform Transfers to Minors Act under ss. 54.854
or the Uniform Custodial Trust Act under ss. 54.950
A common trust or a collective investment fund.
A trust created by a depository agreement with a financial institution.
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.
A fund maintained pursuant to court order in conjunction with a bankruptcy proceeding, business liquidation, or class action lawsuit.
A trust that is part of an employee benefit arrangement or an individual retirement account.
A trust established under a qualified tuition savings program or education savings account.
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.
Any other arrangement under which a person is a nominee or escrowee for another.
History: 2013 a. 92
In this chapter:
“Action," with respect to an act of a trustee, directing party, or trust protector, includes a failure to act.
“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.
“Beneficiary" means a person that satisfies any of the following:
Has a present or future beneficial interest in a trust, vested or contingent.
In a capacity other than that of trustee, trust protector, or a directing party, holds a power of appointment over trust property.
“Charitable trust" means a trust, or portion of a trust, created for a charitable purpose described in s. 701.0405 (1)
. This subsection does not apply in s. 701.1201
“Conservator" means a person appointed by a court pursuant to s. 54.76
“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.
“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.
“Environmental law" means a federal, state, or local law, rule, regulation, or ordinance relating to protection or remediation of the environment.
“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.
“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.
“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.
“Individual with a disability" means an individual who meets one of the following tests:
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.
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.
“Interests of the beneficiaries" means the beneficial interests provided in the terms of a trust.
“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.
“Jurisdiction," with respect to a geographic area, includes a state or country.
“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.
“Power of withdrawal" means a presently exercisable general power of appointment but does not include any of the following:
A power exercisable by a trustee and limited by an ascertainable standard.
A power exercisable by another person only upon consent of a trustee or of a person holding an adverse interest.
“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.
“Qualified beneficiary" means a beneficiary who, on the date on which the beneficiary's qualification is determined, satisfies any of the following:
Is a distributee or permissible distributee of trust income or principal.
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, would be any of the following:
A distributee or permissible distributee of trust income or principal if the interests of the distributees described in par. (a)
terminated on that date without causing the trust to terminate.
A distributee or permissible distributee of trust income or principal if the trust terminated on that date.
“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.
“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.
“Spendthrift provision" means a term of a trust that restrains either or both of a voluntary or involuntary transfer of a beneficiary's interest.
“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.
“Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding.
“Trustee" includes an original, additional, and successor trustee, and a cotrustee.
“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.
“Trust instrument" means an instrument, including any amendments or modifications to the instrument under s. 701.0111
or subch. IV
, that is executed by the settlor that contains terms of a trust or is created under a statute, judgment, or decree that orders property to be transferred to a trustee to be administered for the benefit of a beneficiary.
“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.
History: 2013 a. 92
; 2015 a. 300
Sub. (27), 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
Subject to sub. (2)
, a person has knowledge of a fact if any of the following applies:
The person has received a notice or notification of the fact.
The person has reason to know the fact from all the facts and circumstances known to the person at the time in question.
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.
History: 2013 a. 92
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.
The terms of a trust prevail over any provision of this chapter except for the following:
The duty of a trustee or a directing party to act in good faith and in accordance with the terms and purposes of a trust instrument and the interests of the beneficiaries.
The requirement that a trust and its terms be for the benefit of its beneficiaries, and that the trust have a purpose that is lawful.
The effect of a spendthrift provision and the rights of certain creditors and assignees to reach a trust as provided in ss. 701.0501
The power of the court under s. 701.0708 (2)
to adjust a trustee's, directing party's, or trust protector's compensation specified in the terms of the trust.
Periods of limitation for commencing a judicial proceeding.
The power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice.