Chapter 701, TRUSTS

701.1011 Interest as general partner. (1) Unless personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust’s acquis…

701.1012 Protection of person dealing with trustee. (1) A person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee’s powers is…

701.1013 Certification of trust. (1) Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a certification of trust containing the following information: (a) That the trust exists and the date on which the…

701.1101 Short title and scope. This subchapter may be cited as the Wisconsin Uniform Principal and Income Act. Subject to s. 701.1205 (2), this subchapter applies to a trust described in s. 701.0102 and an estate that is administered in this state. History: 2013 a. 92, 151.

701.1102 Definitions. In this subchapter: (1) “Accounting period” means a calendar year, unless a fiduciary selects another 12-month period, and includes a portion of a calendar year or other 12-month period that begins when an income interest begins or that ends when an income i…

701.1103 Fiduciary duties; general principles. (1) In allocating receipts and disbursements to income or principal or between income and principal, and with respect to any matter within the scope of ss. 701.1110 to 701.1114, a fiduciary: (a) Shall first administer a trust or esta…

701.1104 Trustee’s power to adjust. (1) A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or must be distribute…

701.1105 Notice to beneficiaries of proposed action. (1) A trustee may, but is not required to, obtain approval of a proposed action under s. 701.1104 (1) by providing a written notice that complies with all of the following: (a) Is given at least 30 days before the proposed effe…

701.1106 Conversion to unitrust. (1) Subject to sub. (4), a trust may be converted to a unitrust in any of the following ways: (a) By the trustee, at his or her own discretion or at the request of a qualified beneficiary, if all of the following apply: 1. The trustee determines t…

701.1107 Express unitrusts. (1) In this section, “express unitrust” means any trust that by its trust instrument requires the distribution at least annually of a unitrust amount equal to a fixed percentage of the net fair market value of the trust’s assets, valued at least annual…

701.1108 Power to treat capital gains as part of a distribution. Unless prohibited by the will or trust instrument, a fiduciary may cause gains from the sale or exchange of estate or trust property, as determined for federal income tax purposes, to be taxed for federal income tax…

701.1109 Judicial review of discretionary power. (1) Nothing in this subchapter creates a duty to make an adjustment under s. 701.1104 or to convert a trust to a unitrust under s. 701.1106. Unless it determines that the decision to make an adjustment or to convert to a unitrust w…

701.1110 Determination and distribution of net income. In the case of an estate of a decedent or after an income interest in a trust ends, the following rules apply: 701.1110(1)(1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net inco…

701.1111 Distribution to residuary and remainder beneficiaries. (1) Each beneficiary described in s. 701.1110 (4) is entitled to receive a portion of the net income equal to the beneficiary’s fractional interest in undistributed principal assets, using values as of the distributi…

701.1112 When right to income begins and ends. (1) An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset become…

701.1113 Apportionment of receipts and disbursements when decedent dies or income interest begins. (1) A trustee shall allocate to principal an income receipt or disbursement other than one to which s. 701.1110 (1) applies if its due date occurs before a decedent dies in the case…

701.1114 Apportionment when income interest ends. (1) In this section, “undistributed income” means net income received before the date on which an income interest ends. “Undistributed income” does not include an item of income or expense that is due or accrued or net income that…

701.1115 Character of receipts. (1) In this section, “entity” means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization in which a trustee has an interest other than a trus…

701.1116 Distribution from trust or estate. A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest, and shall allocate to principal an amount received as a dist…

701.1117 Business and other activities conducted by trustee. (1) If a trustee who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for it as part of t…

701.1118 Principal receipts. A trustee shall allocate to principal: (1) To the extent not allocated to income under this subchapter, assets received from a transferor during the transferor’s lifetime, a decedent’s estate, a trust with a terminating income interest, or a payer und…

701.1119 Rental property. To the extent that a trustee accounts for receipts from rental property in accordance with this section, the trustee shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewa…

701.1120 Obligation to pay money. (1) An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, must be allocated to income withou…

701.1121 Insurance policies and similar contracts. (1) Except as provided in sub. (2), a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the …

701.1122 Insubstantial allocations not required. If a trustee determines that an allocation between principal and income required by s. 701.1120 (2), 701.1123, 701.1124, 701.1125, 701.1126, or 701.1129 is insubstantial, the trustee may allocate the entire amount to principal unle…

701.1123 Deferred compensation, annuities, and similar payments. (1) In this section: (a) “Marital deduction trust” means a trust for which an election to qualify for a marital deduction under section 2056 (b) (7), 2056A (a) (3), or 2523 (f) of the Internal Revenue Code has been …

701.1124 Liquidating asset. (1) In this section, “liquidating asset” means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and righ…

701.1125 Minerals, water, and other natural resources. (1) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources in accordance with this section, the trustee shall allocate them as follows: (a) If received as nominal delay rent…

701.1126 Timber. (1) To the extent that a trustee accounts for receipts from the sale of timber and related products in accordance with this section, the trustee shall allocate the net receipts: (a) To income to the extent that the amount of timber removed from the land does not …

701.1127 Property not productive of income. 701.1127(1)(1) If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the surviving spouse with sufficient income from or use of the trust assets, and if the amo…

701.1128 Derivatives and options. (1) In this section, “derivative” means a contract or financial instrument or a combination of contracts and financial instruments that gives a trust the right or obligation to participate in some or all changes in the price of a tangible or inta…

701.1129 Asset-backed securities. (1) In this section, “asset-backed security” means an asset whose value is based upon the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. The term includes an asset…

701.1130 Disbursements from income. A trustee shall make the following disbursements from income to the extent that they are not disbursements specified in s. 701.1110 (2) (b) or (c): (1) One-half of the regular compensation of the trustee and of any person providing investment a…

701.1131 Disbursements from principal. (1) A trustee shall make the following disbursements from principal: (a) The remaining one-half of the disbursements described in s. 701.1130 (1) and (2). (b) All of the trustee’s compensation calculated on principal as a fee for acceptance,…

701.1132 Transfers from income to principal for depreciation. (1) In this section, “depreciation” means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a fixed asset having a useful life of more than one year. (2) A trustee may transfer to pri…

701.1133 Transfers from income to reimburse principal. (1) If a trustee makes or expects to make a principal disbursement described in this section, the trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or…

701.1134 Income taxes. (1) A tax required to be paid by a trustee based on receipts allocated to income must be paid from income. (2) A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal, even if the tax is called an income t…

701.1135 Adjustments between principal and income because of taxes. (1) A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from: (a) Electi…

701.1136 Income payments and accumulations. (1) DISTRIBUTION OF INCOME. Except as otherwise determined by the trustee or a court under s. 701.1106 with respect to unitrust distributions, if a trust instrument fails to specify how frequently a current beneficiary is to receive inc…

701.1201 Private foundations. (1) (a) In the administration of any trust that is a private foundation, as defined in section 509 of the Internal Revenue Code, a charitable trust, as described in section 4947 (a) (1) of the Internal Revenue Code, or a split-interest trust as descr…

701.1202 Electronic records and signatures. The provisions of this chapter governing the legal effect, validity, or enforceability of electronic records or signatures, and of contracts formed or performed with the use of such records or signatures conform to the requirements of s…

701.1203 Uniformity of application and construction. This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it. History: 2013 a. 92.

701.1204 Applicability of general transfers at death provisions. Chapter 854 applies to transfers at death under trust instruments. History: 1997 a. 188; 2013 a. 92 s. 300; Stats. 2013 s. 701.1204. Wisconsin’s New Probate Code. Erlanger. Wis. Law. Oct. 1998.

701.1205 Applicability. (1) Except as otherwise provided in sub. (2) and ss. 701.0602, 701.0813, and 701.0903 (4), this chapter is applicable to a trust existing on July 1, 2014, as well as a trust created after such date, and shall govern trustees acting under such trusts. If ap…

701.1301 Short title. This subchapter may be cited as the Uniform Trust Decanting Act. History: 2023 a. 127.

701.1302 Definitions. In this subchapter: (1) “Authorized fiduciary” means any of the following: (a) A trustee, a directing party, or another fiduciary, other than a settlor, that has discretion to distribute or direct a trustee to distribute part or all of the principal of the f…

701.1303 Scope. (1) Except as otherwise provided in subs. (2) and (3), this subchapter applies to an express trust that is irrevocable or revocable by the settlor only with the consent of the trustee or a person holding an adverse interest. (2) This subchapter does not apply to a…

701.1304 Fiduciary duty. (1) In exercising the decanting power, an authorized fiduciary shall act in accordance with its fiduciary duties, including the duty to act in accordance with the purposes of the first trust. If a trustee or other authorized fiduciary is directed by anoth…

701.1305 Application; governing law. This subchapter applies to a trust created before, on, or after March 23, 2024, if any of the following applies: (1) The trust has its principal place of administration in this state, including a trust whose principal place of administration h…

701.1306 Reasonable reliance. A trustee or other person that reasonably relies on the validity of a distribution of part or all of the property of a trust to another trust, or a modification of a trust, under this subchapter, law of this state other than this subchapter, or the l…