How to Set Up a Custodial Trust in Wisconsin
Wisconsin is one of the states that enacted the Uniform Custodial Trust Act. The act is intended to provide an alternative trust for families with modest incomes and little knowledge of trusts and probate courts or access to estate attorneys. A trust provides a legal structure for the management of assets on behalf of a beneficiary. The Wisconsin Uniform Custodial Trust Act allows any competent adult to create a custodial trust and transfer assets to that trust on behalf of a beneficiary.
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Instructions
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Create the simple transfer document, “Transfer Under the Wisconsin Uniform Custodial Trust Act,” to establish the custodial trust and to assert that, for purposes of the trust, the title and ownership of all of the beneficiary’s assets belong to the trustee for the named beneficiary or to the beneficiary. Include the names of the person transferring the assets into the trust, or transferor; the trustee; the beneficiary; and the person to whom assets are to be distributed, or the distributee, if the trust is terminated due to the beneficiary's death.
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Include in the “transfer” document the names and descriptions of all property to be transferred to the trust, including future income and obligations, such as child support or settlements, due to the beneficiary, and state that the custodial trustee holds the assets for the beneficiary and the distributee. The transferor and trustee may be the same or different people.
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Prepare the document, “Custodial Trustee’s Receipt and Acceptance,” for the trustee to sign accepting the property and the trust and affirming his intent to manage the custodial trust under the Wisconsin Uniform Custodial Trust Act. The custodial trustee must sign and date the document.
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Create the declaration document, “Declaration of Trust Under the Wisconsin Uniform Custodial Trust Act,” which is signed by the custodial trustee to notify the beneficiary of the custodial trust. Include names and descriptions of property transferred to the trust.
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Collect supporting documentation for establishing the custodial trust, including proof of minor status or incapacity and identifying information for all parties. The clerk of your county court can provide information on the necessary documentation or attachments for the trust documents.
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File the custodial trust documents with the Wisconsin circuit court clerk in your county and mail copies of the documents to the appropriate parties. The Wisconsin court system website provides a listing of all circuit court clerks in the state.
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Tips & Warnings
The Wisconsin Custodial Trust Act defines an adult as someone who is 18 years of age or older. The beneficiary of a custodial trust may be an elderly person or someone who is a minor, incapacitated or otherwise in need of asset protection.
Examples of custodial forms and methods are included in the Wisconsin Uniform Custodial Trust Act and on the Wisconsin Legislative Documents website in Chapter 701 Trusts.
The Wisconsin Custodial Trust Act does not allow the trustee or transferor to terminate the trust. The competent beneficiary or a conservator appointed for an incapacitated beneficiary may terminate the trust with a written and signed statement to the trustee. A custodial trust that is not terminated will end with the death of the beneficiary.
The Uniform Custodial Trust Act is based on the provisions in the Uniform Transfers to Minors Act, which was also enacted in Wisconsin (Ref 1).
The Wisconsin Uniform Custodial Trust Act requires the trustee to hold title to the assets, but the sole benefits of the assets must be for the beneficiary.
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