Tag Archive for: Trust Banking

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Prairie Trust President Helps Enact Wisconsin Trust Code Trailer Bill

Victor Schultz

Prairie Trust, a division of Waukesha State Bank, recently issued a press release announcing that President & Chief Fiduciary Officer Victor Schultz co-chaired the joint study committee that drafted the Wisconsin Trust Code Trailer Bill, which was signed into law by Governor Evers on March 21, 2024, as 2023 Act 127.

Scott Birrenkott, the Wisconsin Bankers Association’s director – legal and staff liaison to the WBA Trust Banking Section, commented on Schultz’s involvement with the Bill, “the passage of the trailer bill is the culmination of many years of work by many individuals, which Victor has been a key part of from start to finish. But even before that, Victor has been a leader within the industry.”

The Bill clarifies various issues and adopts new uniform law provisions that have arisen since the Wisconsin Trust Code was enacted and became effective July 1, 2014. The Trailer Bill enactment is the culmination of more than eight years of effort by a joint State Bar and Wisconsin Bankers Association (WBA) study committee.

Birrenkott reflected on Schultz’s contributions, “Victor is a member of both the WBA Trust Banking Section and WBA Government Relations Committee, where he has shared his experience and knowledge for numerous years. That expertise has helped shape Wisconsin’s Trust Code into what it is today, not only with the Trailer Bill, but through his work leading to passage of the initial uniform law. Victor’s passion for the industry is inspiring.”

Significant issues affecting trust and estate administration in Wisconsin that are addressed in the Trust Code Trailer Bill include (for more details, read Prairie Trust’s full press release):

  • Clarification of the rules that allow irrevocable trusts to be modified or terminated.
  • Expansion of who can represent the interests of a trust beneficiary.
  • Specific authorization for a settlor to draft a “Silent Trust.”

Birrenkott added, “we appreciate all Victor has done and are grateful for the opportunity to work with him.”

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Committee Chair Spotlight: Terry Chier

The following is a brief interview with Terry Chier, director – personal trust & estate settlement at Thrivent Trust Company in Appleton. Chier is past chair of the 2023–2024 Trust Banking Section.

How did you first get into the banking industry?

I started in commercial lending right out of college with a finance degree, working for a national transportation financing group. This eventually led to working for a national automotive captive finance company offering lending for consumers and automobile dealers alike.

Why did you decide to join a WBA committee? Why should others consider lending their time and expertise to shaping Wisconsin’s banking industry?

In my case, I joined the WBA committee to work with other trust professionals dedicated to supporting and enhancing the trust industry in Wisconsin. I wanted to network with counterparts within the industry to identify and pursue common interests.

How has WBA facilitated the growth you have seen in your career and as a leader?

I have learned an incredible amount by being part of the WBA Trust Section. Having an inside view of legislative initiatives like the Trust Code trailer bill has provided valuable insight and exposure to highly skilled trust professionals. In addition, the content of the WBA Annual Trust Conference provides timely and valuable industry knowledge.

As a banker, and as a leader, what is the most important lesson that you have learned?

That you can’t rest on your laurels. There is always room for improvement and learning. Our industry is undergoing significant changes driven by a wide variety of internal and external factors. Innovation, agility, and a client-centric approach are what is required to succeed in this environment.

Who (or what) motivates you to succeed?

Successfully helping clients carry out their wishes as stated in their estate plans and assisting subsequent generations in doing the same is a real passion for me. Learning something new every day is another motivator for me. This business consistently offers opportunities to learn and grow, which allows you to be a “go to” or value-added resource for clients and colleagues.

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June 2023 Compliance Journal

The June 2023 WBA Compliance Journal is now available. In this edition, readers will find an article written by the Wisconsin State Bar and Office of Lawyer Regulation regarding 2023 amendments to lawyer trust account rules, effective July 1, 2023. The monthly publication also provides summaries of recently issued agency rules, guidance, and various notices. Be sure to read the “compliance notes” section for other compliance-related updates for bankers.
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Elderly man with hands together in lap
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Bankers’ Roles in Recognizing Elder Financial Abuse

Join us in Madison for WBA’s annual Trust Conference

On May 25, 2022, WBA will be hosting its annual Trust Conference for the benefit of those involved with trust and estate planning. The one-day event held at the WBA office will assist trust professionals in staying up to date on upcoming changes in regulations, the economy, and overall trust department functions.

The conference will also feature a general session on elder abuse and undue influence by Jonathan Ingrisano and Nicholas Bezier of Godfrey & Kahn, S.C. Trust bankers and wealth managers of all levels will benefit from this session on spotting and responding to potential financial abuse of their elderly customers.

According to the World Health Organization, one in six individuals 60 years or older have experienced some form of abuse. Of this, less than 20% of financial abuse is reported by the individual or their proxies. “It is a growing problem that we can only expect to get worse as our population ages,” said Ingrisano.

This troubling trend is not only on the rise in Wisconsin, but throughout the country. As fraudsters become more sophisticated (even so that celebrities such as Stan Lee have endured financial abuse), it is important that bankers know the signs, understand their rights, and feel confident in approaching the situation.

As elder financial abuse cases rise, bankers have taken on the role of trusted advisors and observers. Trust bankers especially develop unique professional and personal relationships with their customers and have a greater ability to notice patterns, spot questionable distributions, and identify unexpected changes in their repeat customers patterns and behaviors.

“I want trust bankers to know they are empowered to do what they think is right, and their hands are not tied,” said Ingrisano. In this, the session will include advice from Godfrey & Kahn, S.C. representatives on reporting financial abuse or fraud, the tools and resources for trust bankers to consult as they work through cases, and important red flags to notice both in elderly customers and/or personal relatives experiencing such abuse.

In addition, trust bankers will also have the opportunity to learn more about how their paper trail observations on the front end can impact the actions taken by department heads or legal counsel on the back end. Through referrals or reports, bankers will learn of the avenues available to protect vulnerable members of their communities.

WBA’s Trust Conference is approved for 5.25 CTFA credit through the American Bankers Association (ABA). Register now to take advantage of this opportunity to stay ahead of upcoming regulatory changes, maintain your certification through ABA, as well as gain insight on how to better serve your community. Please contact Miranda Helt, WBA’s assistant director – education, at mhelt@wisbank.com with questions regarding the conference.

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Legal Q&A: POA and IRA or Trust Accounts

Q: Can a power of attorney act on an IRA or Trust Account?

A: Yes, but only if the power of attorney (POA) agreement permits it.

The extent of an agent’s authority to act under a POA agreement will always depend on the language within the agreement.

Wisconsin’s Uniform Power of Attorney for Finances and Property Act under Chapter 244 governs POA agreements in Wisconsin. Chapter 244 provides for general authority with respect to banks and other financial institutions. One general power granted under statute permits an agent certain actions on an account. Account is a defined term under Wis. Stat. 705.01(1). That definition is broad enough to include an IRA.

For a trust account, an additional consideration to make is that of granting authority. A trust is a separate legal entity from an individual, meaning it has its own interests and authorities distinct from that of an individual person. A power of attorney agreement creates authority between a principal (the person granting authority) and an agent (the person granted authority). A POA agreement giving authority to act on the finances of a natural person principal does not automatically mean the agent can act on accounts owned by a trust, even if the principal is a trustee of the trust. Because a trust account has its own authority and ownership interests, the principal must grant an agent authority to act through their powers as trustee. Authority to do so is derived from the trust agreement.

If a financial institution is unsure about its interpretation of the scope of an agent’s authority within a POA agreement, WBA recommends working with an attorney to receive a legal opinion.

By, Scott Birrenkott

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Legal Q&A: POD Beneficiaries for Deposit Accounts

Q: Can a Deposit Account with a Payable on Death Beneficiary have a Contingent Beneficiary?

A: No. Wisconsin Section 705 covers non-probate transfers at death. WBA does not read section 705 to permit contingent beneficiaries.

The WBA payable on death beneficiary designation form was created in accordance with the below interpretation of Wisconsin Section 705 and thus does not permit contingent beneficiaries. It has been WBA’s longstanding opinion that the POD statute does not permit identification of contingent beneficiaries to accounts governed by Subchapter 1 of the Chapter 705. Accounts covered by this statute include most standard checking, savings and certificate of deposit accounts established by a standard deposit account agreement.

The POD statute specifies who is entitled to payment on a POD account on the death of the last surviving accountholder. Under 705.06(1)(c), the funds are paid to the beneficiaries who survive the death of the last surviving accountholder. If none of the beneficiaries survive, the funds are paid to the estate of the last surviving accountholder. This is the way the WBA form is drafted.

The statute provides a second option under 705.04(2)(d), under which funds otherwise payable to a beneficiary who predeceases the death of the last surviving accountholder, would pass to the beneficiary’s issue who would take under 854.06(3).

When the option to pay the beneficiary’s issue was added to the POD statute, it was WBA’s understanding that the decision was made not to draft for this option. We believe that not all persons would want the issue (without identification of specific children) to receive payment. Further, the bank would not have any easy way to identify all of the issue who would be entitled to the payment. The identity of a person’s issue can change throughout the term of the account.

However, the statute does not permit any other payment of fund in a POD account. The statue does not authorize payment to named contingent beneficiaries.

The WBA POD beneficiary form was drafted to follow the above. Thus, if a bank wishes to contract in a way to appoint contingent beneficiaries for a customer’s deposit account we recommend working with the bank’s own counsel to either modify WBA’s form or create a separate designation. If your bank does not use WBA forms we recommend consulting with your forms drafters to determine what their interpretation of Section 705 is with respect to contingent beneficiaries.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance.

By, Scott Birrenkott

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questions@wisbank.com

608-441-1200

4721 S Biltmore Ln.
Madison, WI 53718

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