2023 WISCONSIN ACT
An Act to create subchapter XIII of chapter 701 [precedes 701.1301] of the statutes; relating to: domestic asset preservation trusts.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SB667,1Section 1. Subchapter XIII of chapter 701 [precedes 701.1301] of the statutes is created to read: CHAPTER 701
SUBCHAPTER XIII
DOMESTIC ASSET
PRESERVATION TRUSTS
701.1301 Definitions. In this subchapter:
(1) “Advisor” means a person who, under the terms of a domestic asset preservation trust, is granted the power to do any of the following:
(a) Remove or appoint a trustee of the domestic asset preservation trust.
(b) Direct, consent to, or disapprove a trustee’s actual or proposed investment, distribution, or any other action related to assets of the domestic asset preservation trust.
(2) “Asset” means property of a transferor but does not include any of the following:
(a) Property to the extent it is encumbered by a valid lien.
(b) Property to the extent it is generally exempt under nonbankruptcy law at the time of a qualified disposition.
(c) Property held as marital property with rights of survivorship to the extent that under the law governing the marital property at the time of a qualified disposition the property is not subject to process by a creditor holding a claim against only one spouse.
(d) Property transferred from a nondomestic asset preservation trust to a domestic asset preservation trust to the extent that the property would not be subject to attachment under applicable nonbankruptcy law that governs the nondomestic asset preservation trust.
(3) “Claim” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
(4) “Creditor” means a person who has a claim against a transferor and includes any transferee of, assignee of, or successor to the claim.
(5) “Debt” means liability on a claim.
(6) “Disposition” means a transfer, conveyance, or assignment of a property interest, including a partial, contingent, undivided, or co-ownership property interest. “Disposition” includes an exercise of a general power of appointment that results in a transfer of property to a trustee but does not include any of the following:
(a) The release or relinquishment of a property interest that is subject to a qualified disposition until the release or relinquishment.
(b) The exercise of a special power of appointment that results in a transfer of property to a trustee.
(c) A disclaimer under s. 700.27 or 854.13.
(6m) “Domestic asset preservation trust” means a trust created by a written instrument, the terms of which do all of the following:
(a) Appoint at least one qualified trustee to accept property that is the subject of a disposition, regardless of whether the terms of the trust also appoint a nonqualified trustee.
(b) Expressly designate the laws of this state to govern the meaning and effect of the terms of the trust, in whole or in part.
(c) Expressly provide that the trust is irrevocable.
(d) Include a spendthrift provision that applies to an interest of a beneficiary in trust property, including an interest of a transferor who is a beneficiary.
(7) “Investment decision” means a decision regarding the retention, purchase, sale, exchange, tender, or other action affecting the ownership of or rights in an investment.
(9) “Lien” has the meaning given in s. 242.01 (8).
(10) “Nondomestic asset preservation trust” means a trust that is not a domestic asset preservation trust.
(11) “Nonqualified trustee” means a trustee who is not a qualified trustee.
(11m) “Qualified affidavit” means an affidavit that meets all of the requirements of s. 701.1312 (2).
(12) “Qualified disposition” means a disposition by a transferor to any trustee of a domestic asset preservation trust.
(13) “Qualified trustee” means a trustee who is not a transferor and to whom one of the following applies:
(a) If the trustee is an individual, the individual resides and is domiciled in this state.
(b) If the trustee is a trust company or a bank, the trust company or bank is organized under federal law, state law, or the laws of another state, the trust company or bank is subject to supervision by the department of financial institutions, the federal deposit insurance corporation, the U.S. comptroller of the currency, or a successor of any of them, and the trust company or bank maintains an office in this state.
(14) “Transferor” means a person who directly or indirectly makes a disposition to a domestic asset preservation trust, including a settlor, as defined in s. 701.0103 (23).
(15) “Valid lien” has the meaning given in s. 242.01 (13).
701.1302 Applicability. (1) Unless the terms of a domestic asset preservation trust provide otherwise, this subchapter governs the construction, operation, and enforcement in this state of a domestic asset preservation trust, whether created in this state or any other state, if any of the following applies:
(a) Any of the land, rents, issues, or profits that are the subject of a qualified disposition are located in this state.
(b) Any portion of personal property, interest of money, or dividends of stock that is the subject of a qualified disposition is located in this state.
(c) The transferor’s legal residence is in this state.
(d) A qualified trustee of the domestic asset preservation trust has the power to maintain records for the trust on an exclusive or nonexclusive basis, prepare or arrange for the preparation of fiduciary income tax returns for the trust, and maintain or arrange for custody in this state of some or all of the property that is the subject of a qualified disposition, and a material portion of the administration of the trust is performed in this state.
(2) (a) If the transferor is married at the time of a qualified disposition, this subchapter applies to the following:
1. Any of the transferor’s individual property that is the subject of the qualified disposition.
2. Any marital property that is the subject of the qualified disposition if the transferor’s spouse at the time of the disposition was provided with notice of the qualified disposition as provided in par. (b) or executed a written consent to the qualified disposition after being provided the information set forth in the notice.
(b) All of the following apply to a notice of a qualified disposition under this subchapter:
1. The notice shall contain the following language, in capital letters, at or near the top of the notice:
YOUR SPOUSE OR FORMER SPOUSE IS CREATING A PERMANENT TRUST INTO WHICH PROPERTY IS BEING TRANSFERRED.
YOUR RIGHTS TO THIS PROPERTY MAY BE AFFECTED DURING YOUR MARRIAGE, UPON DIVORCE (INCLUDING THE PAYMENT OF CHILD SUPPORT OR ALIMONY OR A DIVISION OR DISTRIBUTION OF PROPERTY IN A DIVORCE), OR AT THE DEATH OF YOUR SPOUSE OR FORMER SPOUSE.
YOU HAVE A VERY LIMITED PERIOD OF TIME TO OBJECT TO THE TRANSFER OF PROPERTY INTO THIS TRUST.
YOU MAY, UPON REQUEST TO THE TRUSTEE AT THE ADDRESS BELOW, BE FURNISHED A COPY OF THE TRUST DOCUMENT.
IF YOU HAVE ANY QUESTIONS, YOU SHOULD IMMEDIATELY SEEK INDEPENDENT LEGAL ADVICE.
IF YOU FAIL TO OBJECT WITHIN 30 DAYS, YOU WILL HAVE CONSENTED TO THE TRANSFER OF PROPERTY INTO THIS TRUST.
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2. The notice shall contain a description of the property that is the subject of the qualified disposition.
