Wisconsin Adopts New Trust Code
On December 13, 2013, Wisconsin adopted a new set of laws governing trusts which is a modified version of the Uniform Trust Code now adopted by over half of the states. The new law will become effective July 1, 2014, and we will be providing information and guidance about the new law prior to its effective date.
The new law applies to new trusts and trusts which already exist and creates several new statutory provisions that have no counterpart in existing law.
A few highlights of the new law include:
- Testamentary trusts arising from the probate of a will are no longer subject to continuing court oversight unless a beneficiary petitions for oversight. Trustees are no longer required to file an annual accounting with the court.
- Trusts created for the benefit of a pet are now specifically permitted.
- The technical argument about whether property should be titled in the name of the trust itself or in the name of the trustee as trustee of the trust is now moot: both ways are specifically permitted.
- The existing threshold for terminating a trust because it is too small to be cost effective is $50,000. This will be increased to $100,000 and will be indexed for inflation.
With a few exceptions, the new trust code is a default set of rules which can be changed by the trust document itself. Some things cannot be changed, including a trustee’s duty to act in good faith, the requirements to create a trust, the authority of a court to modify or terminate a trust, and certain rights of creditors.
Stay tuned for further information about Wisconsin’s new trust law and its effect on new and existing trusts.
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