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701.13

701.13 Modification and termination of trusts by court action.

701.13(1)

(1) Anticipation of directed accumulation of income. When an accumulation of income is directed for the benefit of a beneficiary without other sufficient means to support or educate himself or herself, the court on the application of the beneficiary or the beneficiary's guardian may direct that a suitable sum from the income accumulated or to be accumulated be applied for the support or education of such person.

701.13(2)

(2) Application of principal to income beneficiary. Unless the creating instrument provides to the contrary, if a beneficiary is entitled to income or to have it applied for the beneficiary's benefit, the court may make an allowance from principal to or for the benefit of such beneficiary if the beneficiary's support or education is not sufficiently provided for, taking into account all other resources available to the beneficiary.

701.13(3)

(3) Termination. In the case of a living trust whose settlor is deceased and in the case of any testamentary trust, regardless in either case of spendthrift or similar protective provisions, a court with the consent of the trustee may order termination of the trust, in whole or in part, and the distribution of the assets that it considers appropriate if the court is satisfied that because of any substantial reason existing at the inception of a testamentary trust or, in the case of any trust, arising from a subsequent change in circumstances, including but not limited to the amount of principal in the trust, income produced by the trust and the cost of administering the trust, continuation of the trust, in whole or in part, is impractical. In any event, if the trust property is valued at less than $50,000, the court may order termination of the trust and the distribution of the assets that it considers appropriate.

701.13(4)

(4) Marital deduction trusts. In a trust where the income beneficiary also has a general power of appointment as defined in s. 702.01 (3) or where all accumulated income and principal are payable to such beneficiary's estate, any termination, in whole or in part, of the trust under sub. (3) can only be ordered in favor of such beneficiary.

701.13(5)

(5) Charitable trusts.

701.13(5)(a)

(a) In this subsection, "participate or intervene in any political campaign" includes the publishing or distributing of statements.

701.13(5)(b)

(b) Subsections (2) and (3) do not apply to a trust under which a future interest is indefeasibly vested in any of the following:

701.13(5)(b)1.

1. The United States or a political subdivision for exclusively public purposes.

701.13(5)(b)2.

2. A corporation that is organized exclusively for religious, charitable, scientific, literary or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual and no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation, and that does not participate or intervene in any political campaign on behalf of any candidate for public office.

701.13(5)(b)3.

3. A trustee or a fraternal society, order or association operating under the lodge system, provided the principal or income of such trust is to be used by such trustee or by such fraternal society, order or association exclusively for religious, charitable, scientific, literary or educational purposes or for the prevention of cruelty to children and animals, and no substantial part of the activities of such trustee or of such fraternal society, order or association is carrying on propaganda or otherwise attempting to influence legislation, and such trustee or such fraternal society, order, or association does not participate or intervene in any political campaign on behalf of any candidate for public office.

701.13(5)(b)4.

4. Any veteran's organization incorporated by act of congress, or of its departments or local chapters or posts, no part of the net earnings of which inures to the benefit of any private shareholder or individual.

701.13(6)

(6) Other applicable law. Nothing in this section shall prohibit modification or termination of any trust pursuant to its terms or limit the general equitable power of a court to modify or terminate a trust in whole or in part.

701.13 - ANNOT.

History: 1971 c. 66; 1983 a. 189 s. 329 (26); 1991 a. 316; 1993 a. 143; 1999 a. 85.