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In Wisconsin, the creation and administration of trusts are governed by Chapter 701 of the Wisconsin Statutes, known as the Wisconsin Trust Code. Below are the legal requirements for a valid trust in Wisconsin, along with the corresponding statutory references:
1. Intent to Create a Trust - The settlor (person creating the trust) must have a clear intention to create a trust.
1. Intent to Create a Trust - The settlor (person creating the trust) must have a clear intention to create a trust.
Statute: A trust is created only if the settlor has capacity and indicates an intention to create the trust. Wis. Stat. § 701.0402(1)(a)
2. Trust Property (Res) - A trust must have identifiable property to be held in trust.
2. Trust Property (Res) - A trust must have identifiable property to be held in trust.
Statute: A trust is created only if the settlor has capacity...and the trust has a definite or definitely ascertainable property interest. Wis. Stat. § 701.0402(1)(b)
3. Lawful Purpose - The trust must have a legal, valid purpose that is not against public policy.
3. Lawful Purpose - The trust must have a legal, valid purpose that is not against public policy.
Statute: A trust is created only if the trust has a purpose that is lawful, not contrary to public policy, and possible to achieve. Wis. Stat. § 701.0402(1)(c)
4. Beneficiary - A trust must have a definite beneficiary unless it meets exceptions (e.g., charitable trusts).
4. Beneficiary - A trust must have a definite beneficiary unless it meets exceptions (e.g., charitable trusts).
Statute: A trust is created only if the trust has a beneficiary that is definite or definitely ascertainable. Wis. Stat. § 701.0402(1)(d)
5. Trustee - A trustee must be designated to manage the trust.
5. Trustee - A trustee must be designated to manage the trust.
Statute: A trust must have one or more trustees to carry out the terms of the trust and fulfill its purposes. Wis. Stat. § 701.0701
6. Proper Execution (Formalities) - For a revocable living trust, the trust document must generally be in writing and signed by the settlor.
6. Proper Execution (Formalities) - For a revocable living trust, the trust document must generally be in writing and signed by the settlor.
Statute: A trust may be created by a transfer of property, declaration by the owner, exercise of a power of appointment, or a promise enforceable in equity. Wis. Stat. § 701.0402(2)
7. Revocable vs. Irrevocable - A trust is revocable unless expressly made irrevocable.
7. Revocable vs. Irrevocable - A trust is revocable unless expressly made irrevocable.
Statute: Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. Wis. Stat. § 701.0602(1)
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