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Is Your Wisconsin Bank Ready for Trust Protectors?

On December 13, 2013, Governor Scott Walker signed the Wisconsin Trust Code into law. The provisions of the Wisconsin Trust Code will take effect on July 1, 2014 and will be contained in Chapter 701 of the Wisconsin Statutes.

One of the new concepts addressed in the Wisconsin Trust Code is that of a "Trust Protector." A Trust Protector is generally a person appointed to direct certain limited actions with respect to a trust. A Trust Protector is not a Trustee. However, if appointed, a Trust Protector is authorized to watch over the trustee and perform specific duties or actions on behalf of the trust.

A Trust Protector may be appointed in one of the following ways: "[i] by the settlor in a trust instrument; [ii] by a court in a court order, or [iii] by the interested parties in a nonjudicial settlement agreement." If appointed, the Trust Protector is only authorized to perform those actions that are specifically stated in the trust instrument, court order or nonjudicial settlement agreement (the "governing instrument"). Among other things, the governing instrument may give a Trust Protector the authority to change the trustees of a trust, amend the trust, or change the beneficiaries of the trust.

The nature and scope of the powers granted to a Trust Protector under a governing instrument will vary greatly. Therefore, any request of a financial institution made by a purported Trust Protector must be reviewed on an individual, case-by-case basis. Generally, a financial institution or its counsel should review copies of the documents relating to the appointment of the Trust Protector, as well as the scope of authority granted to the Trust Protector under the governing instrument. The financial institution may also want to consider obtaining a certification from the Trust Protector under which the Trust Protector attests to his or her authority to perform the actions requested and exempts the financial institution from liability associated with acting on the Trust Protector’s direction.

Copyright © 2020 Godfrey & Kahn S.C.National Law Review, Volume IV, Number 53

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About this Author

Shannon Braun Estate Planning Attorney
Associate

Shannon Braun is a shareholder and a member of the Estate Planning, Estate & Trust Administration Practice Group in the Milwaukee office. She works closely with her clients to help them achieve their financial goals while minimizing certain tax risks. Shannon represents a diverse client base that includes owners of closely held businesses, philanthropists and high net-worth individuals. She regularly provides legal advice on matters involving succession planning, sophisticated charitable giving, wealth transfer techniques, estate and gift taxation, fiduciary income...

414-287-9568
Jennifer A. Hannon, Godfrey Kahn Law Firm, fiduciary income taxation lawyer
Member

Jennifer A. Hannon is a member of the Estate Planning Group.  Jennifer’s practice focuses on fiduciary income taxation, estate and gift taxation, probate and trust administration, and the drafting of wills, trusts, marital agreements and related estate planning documents.

Jennifer advises individuals, businesses, private foundations and other charitable organizations on transfer tax issues and asset protection strategies through the use of split-interest trusts, irrevocable generation-skipping trusts, and other unique estate planning and business succession techniques.  Jennifer also advises financial institutions and insurance companies on multiple states’ laws concerning guardianships, durable powers of attorney, beneficiary designations, and probate and trust administration.

608-257-3911
Peter Wilder Financial Attorney Godfrey Kahn
Shareholder

Peter Wilder is a shareholder with the Banking and Financial Institutions Practice Group. His clients include banks, mortgage companies, finance companies, financial services company vendors, and business executives. Peter provides a wide range of corporate and regulatory advice on topics including mergers and acquisitions, strategic revenue enhancement strategies, branch sales, capital raises, vendor contracts, and consumer finance laws. He has also provided legislative support to the Wisconsin community banking and mortgage banking industries.

Peter is a graduate of the Graduate...

414-287-9609