For the first time in over 40 years, Wisconsin has made major revisions to the statutes governing trusts. The new law (the Wisconsin Trust Code) goes into effect on July 1, 2014. The law was the product of over seven years of work by committee members representing the State Bar of Wisconsin and the Wisconsin Bankers Association and generally modernizes our law. The committee made rather modest changes to the Uniform Trust Code, which has now been adopted by 26 states and the District of Columbia.
The most significant changes, compared to our existing trust laws, are the more detailed provisions which govern the creation and administration of trusts. However, almost all of these provisions only govern in the absence of contrary language in a trust instrument. The terms of a trust prevail over any provisions of the Wisconsin Trust Code except as limited by Section 701.0105.
The Wisconsin Trust Code introduces to Wisconsin some trust concepts not previously defined in our statutes. Both “Directing party” and “Trust protector,” defined in Section 701.0103, are terms not previously found in Wisconsin statutes. Both of these are persons who may be appointed by the settlor of a trust to handle some of the responsibilities traditionally reserved to a trustee or to serve as an intermediary between a trustee and a beneficiary. By way of example, a settlor may have stock in a closely-held business or real estate holdings that the settlor wants to put in trust. The nature of these assets may make management by an institutional trustee difficult. The settlor can appoint a Directing party whose only responsibility is to manage these specific assets, relieving the trustee of a troublesome investment management burden.
The drafting committee considered the Uniform Trust Code as had been adopted in a number of jurisdictions and modified it to suit the needs of settlors, trustees, and beneficiaries in Wisconsin. Those of us practicing estate planning and trust law in Wisconsin are looking forward to the opportunities presented by the Wisconsin Trust Code.
If you have any questions about how the information in this article may affect you or your business, please contact Rob Stroud at rstroud@stroudlaw.com or (608) 257‑2281 or your Stroud attorney.
DISCLAIMER: The information in this article is provided for general informational purposes only, is not necessarily updated to account for changes in the law, and should not be considered tax or legal advice. This article is not intended to create, nor does the receipt of it constitute, an attorney-client relationship. You should consult with your own legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.
