IRREVOCABLE TRUST AGREEMENT
(Wisconsin)
[// GUIDANCE: This template is drafted to comply with the Wisconsin Trust Code and current fiduciary-income-tax practices but must be reviewed and tailored by Wisconsin-licensed counsel before execution.]
TABLE OF CONTENTS
I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
Schedule A – Description of Trust Property
I. DOCUMENT HEADER
1. Title and Parties
This Irrevocable Trust Agreement (the “Agreement”) is made as of [EFFECTIVE DATE] (the “Effective Date”) by and among:
a. [GRANTOR LEGAL NAME], a resident of the State of Wisconsin (“Grantor”); and
b. [TRUSTEE LEGAL NAME], [individual/an entity] with its principal place of business/residence at [ADDRESS] (“Trustee”).
(The Grantor and the Trustee are collectively referred to as the “Parties.”)
2. Recitals
WHEREAS, the Grantor desires to create an irrevocable trust to hold and manage certain property for the benefit of the Beneficiaries (as defined herein);
WHEREAS, the Trustee is willing to accept the trusteeship and perform the duties herein set forth;
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
II. DEFINITIONS
For purposes of this Agreement, capitalized terms have the meanings set forth below. All singular terms include the plural and vice-versa, and gender references include all genders unless the context otherwise requires.
“Accounting Period” – Each calendar year ending December 31, unless the Trustee selects another fiscal year consistent with applicable tax law.
“Agreement” – This Irrevocable Trust Agreement, as it may be amended or restated in strict accordance with Article V.
“Beneficiary” – Each person or entity listed in Section 3.1 and any successor beneficiary determined in accordance with this Agreement.
“Code” – The Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.
“Income” and “Principal” – As determined under the Wisconsin Principal and Income Act, unless the Trustee elects a unitrust approach permitted under Wisconsin law.
“Protectors” – The individuals or entities, if any, appointed in Section 6.11 with limited oversight powers.
“Trust” – The irrevocable trust created by this Agreement and known as “[TRUST NAME]” (the “Trust”).
“Trust Estate” – All property transferred to the Trustee under this Agreement, together with all additions, substitutions, accumulations, and proceeds thereof.
“Wisconsin Trust Code” – Wisconsin Statutes Chapter 701, as amended from time to time.
[// GUIDANCE: Add or delete defined terms to fit the specific trust design.]
III. OPERATIVE PROVISIONS
3.1 Creation and Funding
a. The Grantor hereby irrevocably transfers to the Trustee the property described on Schedule A (the “Initial Trust Property”).
b. Additional property may be added to the Trust by the Grantor or any third party at any time, subject to Trustee approval.
3.2 Trust Purpose
The Trust is established to:
1. Provide for the health, education, maintenance, and support of the Beneficiaries;
2. Protect Trust assets from unnecessary depletion; and
3. Achieve transfer-tax efficiency consistent with Wisconsin and federal law.
3.3 Beneficiaries and Distributions
a. Primary Beneficiaries: [LIST PRIMARY BENEFICIARIES].
b. Contingent Beneficiaries: [LIST CONTINGENT BENEFICIARIES].
c. Mandatory Distributions: On or before [DATE] of each Accounting Period, the Trustee shall distribute [INCOME/UNITRUST PERCENTAGE] to the Primary Beneficiaries, pro rata, unless otherwise directed in writing by the Beneficiaries holding a majority of beneficial interests.
d. Discretionary Distributions: The Trustee may, in its sole discretion, distribute additional Income or Principal for any Beneficiary’s health, education, maintenance, or support (“HEMS Standard”).
e. Remainder: Upon termination under Section 3.4, the remaining Trust Estate shall vest absolutely in the then-living Beneficiaries, per stirpes.
3.4 Term and Termination
a. This Trust shall terminate on the earliest to occur of:
i. The twenty-first (21st) anniversary of the death of the last survivor of the Beneficiaries living on the Effective Date (per the common-law Rule Against Perpetuities, as modified by Wisconsin statute);
ii. Complete distribution of the Trust Estate; or
iii. Court-ordered termination under the Wisconsin Trust Code.
b. Upon termination, the Trustee shall distribute the Trust Estate in accordance with Section 3.3(e).
3.5 Irrevocability
This Trust is irrevocable. Except as expressly allowed under Article V or by a non-judicial settlement agreement permitted under the Wisconsin Trust Code, the Grantor, Trustee, Protectors, and Beneficiaries waive any right to alter, amend, revoke, or terminate this Agreement.
IV. REPRESENTATIONS & WARRANTIES
4.1 Grantor Representations
a. Capacity: The Grantor is of legal age and sound mind and has full legal capacity to execute this Agreement.
b. Title: The Grantor owns the Initial Trust Property free and clear of liens, claims, and encumbrances other than as disclosed on Schedule A.
c. No Conflict: Execution of this Agreement does not violate any court order, contract, or applicable law binding upon the Grantor.
4.2 Trustee Representations
a. Authority and Capacity: The Trustee has the requisite authority and, if an entity, has taken all necessary corporate or organizational actions to execute this Agreement.
b. No Conflict: Execution and performance of this Agreement will not violate any governing documents, fiduciary obligations, or applicable law.
c. Fiduciary Standard: The Trustee shall administer the Trust with reasonable care, skill, and caution in good faith and in accordance with the terms of this Agreement and the Wisconsin Trust Code.
4.3 Survival
The representations and warranties in this Article shall survive the Effective Date for so long as the Trust remains in existence.
V. COVENANTS & RESTRICTIONS
5.1 Affirmative Covenants of Trustee
a. Accounting: Provide annual written statements of receipts, disbursements, and assets to all Qualified Beneficiaries and, upon reasonable request, to any Beneficiary.
b. Tax Filings: Timely prepare and file all required federal, state, and local tax returns for the Trust.
c. Confidentiality: Maintain the confidentiality of Trust matters except as legally required or as necessary to administer the Trust.
5.2 Negative Covenants
a. No Self-Dealing: Except as expressly permitted herein, the Trustee shall not engage in any transaction that constitutes self-dealing or creates an impermissible conflict of interest under Wisconsin law.
b. Restrictions on Transfers: Beneficial interests are non-assignable and shall not be subject to voluntary or involuntary transfer, alienation, pledge, or attachment, to the maximum extent permitted by law (“Spendthrift Provision”).
5.3 Amendment Procedures
Except as provided in Section 5.4, this Agreement may be amended only by (i) a written instrument executed by the Trustee and all Beneficiaries, and (ii) approval of the [COUNTY] County Circuit Court, Probate Division (“Probate Court”).
5.4 Decanting & Court-Directed Modification
The Trustee may decant or otherwise modify the Trust pursuant to decanting or modification provisions under the Wisconsin Trust Code, but solely to advance the Trust Purpose and without materially impairing Beneficiary rights.
[// GUIDANCE: Delete Section 5.4 if Grantor intends to prohibit any decanting or modification.]
VI. DEFAULT & REMEDIES
6.1 Events of Default
The following constitute “Events of Default”:
a. Trustee’s breach of fiduciary duty resulting in material loss to the Trust Estate;
b. Failure to provide required accountings within [30] days after written notice;
c. Filing of voluntary or involuntary bankruptcy by or against the Trustee (if an individual, personal bankruptcy; if an entity, organizational bankruptcy).
6.2 Notice and Cure
The Beneficiaries or Protectors must give the Trustee written notice of the Event of Default and a [30-day] opportunity to cure, except no cure period applies to willful misconduct or fraud.
6.3 Remedies
a. Removal: Upon uncured default, any Beneficiary may petition the Probate Court for immediate removal of the Trustee.
b. Surcharge: The Trustee may be surcharged for losses proximately caused by breach of trust but only to the extent of the Trust Estate under Article VII.
c. Injunctive Relief: Beneficiaries may seek temporary or permanent injunctions to protect Trust property.
6.4 Attorneys’ Fees
In any action arising under this Article, the prevailing party is entitled to reasonable attorneys’ fees and costs, payable from the Trust Estate unless the Probate Court orders otherwise.
VII. RISK ALLOCATION
7.1 Trustee Indemnification
a. Indemnity: The Trust shall indemnify and hold the Trustee harmless from and against any claim, loss, liability, or expense, including reasonable attorneys’ fees, arising from the Trustee’s good-faith administration of the Trust, except for liabilities resulting from the Trustee’s willful misconduct, intentional breach, or gross negligence.
b. Procedure: The Trustee shall provide prompt written notice of any claim to the Beneficiaries. Failure to give prompt notice does not relieve the Trust of its indemnity obligations except to the extent prejudiced.
7.2 Limitation of Liability
The Trustee’s liability to the Beneficiaries is limited to the value of the Trust Estate; the Trustee shall not be personally liable beyond Trust assets, except for willful misconduct or intentional breach of trust.
7.3 Insurance
The Trustee may purchase, at Trust expense, fiduciary liability insurance with coverage limits reasonably adequate to the size and complexity of the Trust Estate.
7.4 Force Majeure
The Trustee is not liable for delays or failures in performance caused by acts of God, war, terrorism, pandemic, governmental action, or other events beyond the Trustee’s reasonable control; provided that the Trustee uses commercially reasonable efforts to mitigate any resulting adverse effects on the Trust.
VIII. DISPUTE RESOLUTION
8.1 Governing Law
This Agreement and the Trust shall be governed by and construed in accordance with the laws of the State of Wisconsin, including the Wisconsin Trust Code, without regard to its conflict-of-laws principles.
8.2 Forum Selection
Exclusive jurisdiction and venue for all proceedings concerning this Trust shall lie in the Probate Court of [COUNTY] County, Wisconsin.
8.3 Optional Arbitration
[ARBITRATION - SELECT ONE]
☐ Included – Any dispute that the Probate Court permits to be arbitrated shall be submitted to confidential, binding arbitration administered by [ARBITRATION ORGANIZATION] in accordance with its rules then in effect. Judgment upon the award may be entered by the Probate Court.
☐ Excluded – Arbitration shall not apply.
[// GUIDANCE: Delete the inapplicable checkbox above before execution.]
8.4 Jury Trial Waiver
To the extent a matter is heard in a court of general jurisdiction rather than Probate Court, the Parties knowingly and voluntarily waive any right to a trial by jury.
8.5 Injunctive Relief
Nothing in this Article limits a Beneficiary’s or the Trustee’s right to seek equitable or injunctive relief from the Probate Court to enforce Trust terms.
IX. GENERAL PROVISIONS
9.1 Notices
All notices shall be in writing and deemed given upon (i) personal delivery, (ii) confirmed email or facsimile transmission, (iii) certified U.S. Mail, return receipt requested, or (iv) nationally recognized overnight courier, in each case addressed to the last known address of the recipient.
9.2 Assignment
Neither the Trustee nor any Beneficiary may assign their rights or delegate their duties under this Agreement except as expressly permitted herein or by the Probate Court.
9.3 Successors and Assigns
This Agreement is binding on and inures to the benefit of the Parties and their respective successors, representatives, and permitted assigns.
9.4 Severability
If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to reflect the Parties’ intent.
9.5 Entire Agreement
This Agreement constitutes the entire understanding of the Parties with respect to the Trust and supersedes all prior agreements or understandings, written or oral, relating to the subject matter herein.
9.6 Amendment and Waiver
No amendment or waiver is effective unless made in accordance with Article V and in a writing signed by the required Parties. No waiver of any breach constitutes a waiver of any subsequent breach.
9.7 Counterparts & Electronic Signatures
This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures delivered via electronic means (e.g., PDF or approved e-signature platform) are binding.
X. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
10.1 Grantor
[GRANTOR LEGAL NAME]
Grantor
10.2 Trustee
[TRUSTEE LEGAL NAME]
Trustee
[If Trustee is an entity:
By: _____
Name: _____
Title: ________ ]
10.3 Notarization (Wisconsin Acknowledgment)
State of Wisconsin )
County of _______ ) ss.
On this _ day of _, 20____, before me, the undersigned Notary Public, personally appeared [NAME(S) OF SIGNATORY(IES)], known to me (or satisfactorily proven) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged that he/she/they executed the same for the purposes therein contained.
Witness my hand and official seal.
Notary Public, State of Wisconsin
My Commission Expires: _____
SCHEDULE A
Description of Initial Trust Property
- [DESCRIPTION]
- [ACCOUNT NUMBER / LAST FOUR DIGITS]
- [REAL PROPERTY LEGAL DESCRIPTION, IF APPLICABLE]
[// GUIDANCE:
1. Ensure Grantor does not retain any powers or rights that would cause estate-tax inclusion (e.g., §2036 retained powers).
2. For life insurance trusts, add “Crummey” withdrawal provisions and split-dollar language as needed.
3. Review Wisconsin elective-share statutes if Grantor is married.
4. Confirm spendthrift language meets creditor-protection goals.
5. Insert GST-tax severance clauses for generation-skipping planning if applicable.
6. Obtain separate tax ID (EIN) for non-grantor trust post-funding.
]