Feb. 19, 2014 – Until the Wisconsin Legislature enacted 2013 Wisconsin Act 92, the Wisconsin Trust Code consisted of a mere 29 sections in the Wisconsin Statutes. That number will grow by more than 100 on July 1, 2014, when Act 92 takes effect. Think you know what’s new in Wisconsin’s trust statutes? Take this quiz, touching on just a small sample of the Trust Code’s many provisions. You might be surprised.
Revocable or Irrevocable: What’s the Default?
Question: Will the revised Wisconsin Trust Code retain the basic principle, under current Wisconsin law, that all trust agreements are irrevocable unless a power to revoke is expressly reserved? See Findorff v. Findorff, 3 Wis. 2d 215, 88 N.W.2d 327 (1958).
Answer: No. A trust will be presumed revocable: “Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust.” Wis. Stat. § 701.0602(1), as created by 2013 Wis. Act 92, § 115 (eff. July 1, 2014). “This subsection does not apply to a trust created under an instrument executed before July 1, 2014.” Id.
Role of Courts in Administration of Trusts: Is There One?
Question: Will the revised Wisconsin Trust Code retain the old Trust Code’s definition of a testamentary trust – “a trust subject to the continuing jurisdiction of the court assigned to exercise probate jurisdiction”? See Wis. Stat. § 701.01(6) (2011–12).
Answer: No. The new Trust Code no longer defines testamentary trust. In addition, the new Code provides, “Unless ordered by the court upon a petition of a settlor, trustee, or qualified beneficiary requesting continuing judicial supervision, a trust is not subject to continuing judicial supervision.” Wis. Stat. § 701.0201(2), as created by 2013 Wis. Act 92, § 62 (eff. July 1, 2014); see also 2013 Wis. Act 91, § 47 (repealing Wis. Stat. § 701.01) (eff. July 1, 2014).
Time Limitation for Action Against Trustee: How Long Is It?
Question: Under the old Trust Code, “If a trustee sends to all beneficiaries a written communication relating to the trust,” the beneficiary has two years to bring “any action against the trustee … based on … the written communication.” Wis. Stat. § 701.20(31)(a) (2011 - 12). How much time does a trust beneficiary have to bring a proceeding against a trustee under the new Trust Code?
Answer: The new Trust Code provides that a beneficiary’s breach-of-trust action against a trustee must be brought within “one year after the date on which the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust.” Wis. Stat. § 701.1005, as created by 2013 Wis. Act 92, § 165 (eff. July 1, 2014); see also 2013 Wis. Act 92, § 291 (repealing Wis. Stat. § 701.20(31)) (eff. July 1, 2014).
These Answers … and More … Can Be Found in PINNACLE’s New Wisconsin Trust Code
Open the latest codebook from PINNACLE and you’ll see the Wisconsin Trust Code as it will take effect on July 1, 2014. You’ll also find the “old” Wisconsin Trust Code provisions that continue in effect through June 30, 2014. And you’ll find Act 92, the legislation that revised the Wisconsin Trust Code – with underlining and strikeouts to show exactly what has changed – along with the Legislative Reference Bureau’s analysis, giving a descriptive overview of the revisions.
The book costs $69 for members and $89 for nonmembers. For more information or to order, visit Marketplace or call the State Bar at (800) 728-7788 or (608) 257-3838.