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

a. ULC promulgated the uniform principal and income act in 1997. It
governs how a trust should account for income and principal.
b. Wisconsin enacted its version of the uniform principal and income act in
2005. The Wisconsin law includes:
i. Power to adjust between principal and income - §701.20(4).
ii.
iii.
iv.
Power to convert to a unitrust (between 3% - 5%) - §701.20(4g).
Express unitrusts - §701.20(4j).
Power to treat capital gains as income - §701.20(4k).
3. Uniform Trust Code.
a. ULC promulgated the UTC in 2001 and last revised/amended the UTC in
2010.
b. The UTC has been enacted in 25 states plus the District of Columbia.
c. The UTC is a comprehensive redrafting of the model trust code. It
primarily provides a set of default rules that can be overridden by the
terms of the trust.
d. Wisconsin established joint State Bar / Wisconsin Bankers Association
committee in 2007 to evaluate how to incorporate the UTC into the
Wisconsin Trust Code.
II.
Uniform Trust Code – Overview – 11 articles.
A. Article I – general provisions and definitions.
1. Provides a standard set of definitions. Introduces the definition of
“qualified beneficiary,” which essentially includes the current
beneficiaries and the first layer of remainder beneficiaries.
2. The terms of a trust prevail over the UTC except for certain mandatory
provisions. These include:
a. Duty of a trustee to act in good faith, in accordance with the terms and
purposes of the trust and the interests of the beneficiaries.
b. Trust must have a lawful purpose.
c. Power of the court to oversee the administration of a trust.
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