Probate & Trust Law Section Conference Manual ... - Minnesota CLE

I. History of the Wisconsin Trust Code.
A. Current version of Wisconsin Trust Code was initially adopted in 1971 and has
been amended from time to time. Code is found in Chapter 701 of Wisconsin
Statutes (Current code is attached as Exhibit A.)
1. Wills were the predominant estate planning vehicle.
2. Estates were smaller and estate assets much more basic – bank accounts,
stocks, bonds, real estate, life insurance, business interests.
3. Mutual funds, variable annuity and life insurance contracts, universal life
insurance, S Corporations, LLCs and LPs were not prevalent or did not exist.
4. Retirement assets were limited – often just a defined benefit plan that
terminated at death. IRAs were not created until 1976 and 401(k) plans were
created in 1981.
5. Unlimited marital deduction did not exist. Wisconsin imposed an inheritance
tax. The federal estate tax exemption was $60,000 and the estate tax rates
ranged from 3% to 77% (for estates in excess of $10 million.)
6. Probate avoidance tools like PODs, TODs and beneficiary designations on
large retirement plan balances did not exist.
7. Life expectancies were shorter – females 75 years, now 82 years; males 71
years, now 79 years.
8. Today there are higher divorce rates, more second marriages and children
from mixed marriages.
B. Key provisions of the current Wisconsin Trust Code.
1. §701.06 – Spendthrift provisions.
a. A spendthrift provision protects trust assets from claims of a beneficiary’s
creditors.
b. A spendthrift provision is not effective against claims for child support or
public support.
c. The settlor cannot establish an asset protection trust - §701.06(6).
2. §701.065 – Debts of a decedent.
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