Trust Decanting Requirements in Wisconsin
At a glance
| Governing law and available decanting route | Wis. Stat. ch. 701, subch. XIII, §§ 701.1301-.1327, Uniform Trust Decanting Act. Decanting power distributes first-trust property to ≥1 second trusts or modifies first-trust terms; modified first trust is a second trust (§§ 701.1301-.1302) |
|---|---|
| First-trust scope, state connection, retroactivity, and opt-out | Express trust irrevocable or revocable only with trustee/adverse-interest holder consent; solely charitable trust excluded. Applies to trusts created before/on/after Mar. 23, 2024 with Wisconsin principal administration or specified Wisconsin governing-law connection. Express restriction/ prohibition controls; general amendment/revocation, spendthrift, or transfer- restraint clause does not (§§ 701.1303, .1305, .1315) |
| Authorized fiduciary and required distribution power | Nonsettlor trustee, directing party, or other fiduciary with discretion to distribute/direct part/all principal to ≥1 current beneficiaries; court- appointed special fiduciary; special-needs fiduciary; or trust protector granted decanting power. Disability hierarchy reaches principal discretion, then income discretion, then mandatory income/principal (§§ 701.1302(1), .1309, .1313) |
| Expanded, limited, mandatory, and ascertainable-standard branches | Expanded = discretion not limited by ascertainable/reasonably definite standard; may decant covered principal with vested/beneficiary limits. Limited = discretion limited by either standard; aggregate second-trust interests must be substantially similar, with narrow testamentary-power option. Mandatory authority appears in disability branch (§§ 701.1302(3), .1311-.1313) |
| Beneficiary, vested-interest, and power-of-appointment changes | Expanded route generally bars new current/remainder/successor beneficiaries and reduction/elimination of vested interests; may retain/omit/create/modify appointment powers and use broader/different appointee class. Limited route preserves substantially similar interests with a narrow estate-creditor testamentary power. Disability route can alter protected interests subject to special-needs rules (§§ 701.1311-.1313) |
| Second-trust terms, duration, governing law, and administration | Distribution to ≥1 second trusts or first-trust modification; expanded/ limited second trusts may use any jurisdiction, subject to charitable rule. Duration may differ, but attributable property keeps first-trust maximum- perpetuity, accumulation, and alienation-suspension rules. Complete exercise presumptively carries later property; partial leaves it unless otherwise provided (§§ 701.1302(2),(7), .1311-.1312, .1314(5), .1320, .1326) |
| Tax, charitable, special-needs, compensation, and other guardrails | Detailed marital/charitable deduction, gift-exclusion, S-corporation, GST, qualified-benefits, grantor-status, and other tax-benefit limits. Charitable interests protected; Attorney General/identified charity may affect governing law. Special-needs/animal routes included. Compensation increase, liability relief, aggregate liability, and remover-power changes restricted, with pooled-trust exceptions (§§ 701.1313-.1319, .1323) |
| Notice, recipients, consent, waiver, objection, and representation | Notice ≥30 days before exercise to living/existing settlors, qualified beneficiaries, present appointment-power holders, fiduciary removers, both trusts' directing parties/protectors/other fiduciaries, and Attorney General when applicable; unknown/unlocatable exception. Give manner/effective date plus first/all second instruments. All recipients may waive period in signed record. Section states no notice writing/record form, delivery method, or separate representation rule (§ 701.1307) |
| Exercise instrument, court review, effectiveness, and remedies | Signed record identifies first/all second trusts and distributed/remaining property, directly or by notice reference. Consent/court approval ordinarily unnecessary; listed applicants may seek instructions, special fiduciary, approval, ineffectiveness ruling, corrective directions, or relief. Reasonable-care notice saving, noncompliant-term cure/correction, reliance protection, later-property defaults, and inherited obligations apply; no subchapter-specific limitations period (§§ 701.1306-.1310, .1322, .1326-.1327) |
Requirements one by one
Covered trust and authorized fiduciary
Wisconsin Statutes § 701.1303 covers an express trust that is irrevocable or revocable only with consent of the trustee or an adverse-interest holder and excludes a solely charitable trust. Section 701.1305 applies the act to trusts created before, on, or after March 23, 2024 when Wisconsin is the principal place of administration or has one of the specified governing-law connections.
Under § 701.1302, the ordinary authorized fiduciary is a nonsettlor trustee, directing party, or other fiduciary with discretion over some or all principal for current beneficiaries. The definition also includes a court-appointed special fiduciary, special-needs fiduciary, and a trust protector granted the power.
Expanded, limited, and disability routes
Wisconsin Statutes § 701.1311 permits expanded-discretion decanting of covered principal, generally without adding current, presumptive-remainder, or successor beneficiaries or reducing a vested interest. It permits specified appointment- power changes, including a broader or different appointee class.
Limited discretion under § 701.1312 is constrained by an ascertainable or reasonably definite standard. The second trusts in aggregate must preserve substantially similar interests, although the fiduciary may grant a beneficiary a testamentary power for estate creditors if it concludes the grant is unlikely to harm presumptive remainder beneficiaries.
Section 701.1313's disability route can reach a nonsettlor fiduciary with principal discretion, then income discretion, and finally mandatory income or principal authority. A qualifying special-needs fiduciary uses the expanded route when the second trust benefits the beneficiary with a disability and the exercise furthers the first trust's purposes.
Notice and the signed record
Wisconsin Statutes § 701.1307 requires notice no later than 30 days before exercise to the listed settlors, qualified beneficiaries, present appointment- power holders, fiduciary removers, directing parties, trust protectors, other fiduciaries of both trusts, and Attorney General when applicable. The notice states the manner and effective date and includes the first and every second trust instrument. All recipients may waive the period in a signed record.
The statute requires a signed record for the exercise, but it does not call the notice itself written or a record and does not prescribe its delivery method. Under § 701.1310, the separate exercise record identifies both trusts and what property goes to each second trust or remains in the first, directly or by reference to the notice.
Court review and statutory saving
Consent and court approval are ordinarily unnecessary. Wisconsin Statutes § 701.1309 lets the listed applicants seek instructions, a special fiduciary, approval, an ineffectiveness ruling, corrective directions, or other relief.
Reasonable care to comply prevents a missed notice from automatically making the exercise ineffective. Section 701.1322 separately saves an otherwise valid exercise when part of the second-trust instrument does not comply, voiding a forbidden term or supplying a required term to the necessary extent and requiring corrective fiduciary action.
What trips people up
The current statute is subchapter XIII, not former § 701.0418. The certified current chapter identifies every decanting provision as added by 2023 Wisconsin Act 127 and applies the framework from March 23, 2024.
An express decanting or further-trust restriction controls. A general no- amendment, no-revocation, spendthrift, or transfer-restraint clause does not.
Common questions
Can a second trust use another state's law?
Usually yes under the expanded and limited routes. A determinable charitable interest under § 701.1314 can require Wisconsin administration unless the Attorney General does not object, consents, the identified charity consents, or a court approves.
Can a second trust last longer?
Its stated duration may differ, but § 701.1320 keeps the first trust's maximum- perpetuity, accumulation, and alienation-suspension rules on attributable property.
What happens to property discovered later?
Under § 701.1326, a complete decanting presumptively carries later property to the second trust; a partial decanting presumptively leaves it in the first trust, unless the exercise or second-trust terms provide otherwise.
Statutes and sources
- Wis. Stat. ch. 701, subch. XIII, §§ 701.1301-.1327 — current Wisconsin Uniform Trust Decanting Act. Official certified Chapter 701 text (accessed September 12, 2026; published September 4, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
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