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2023 - 2024 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 667
February 16, 2024 - Offered by Senator Knodl.
SB667-SSA1,1,2 1An Act to create subchapter XIII of chapter 701 [precedes 701.1301] of the
2statutes; relating to: domestic asset protection trusts.
Analysis by the Legislative Reference Bureau
2023 Senate Bill 667 creates a new chapter 669, stats., that governs a new type
of trust, called a legacy trust. This substitute amendment places all of the bill
language from 2023 Senate Bill 667 in a new subchapter of the Wisconsin Trust Code.
In addition, under the substitute amendment, if a person who creates a legacy trust
is married and transfers marital property to the legacy trust, the person must
provide to that person's spouse written notice of the transfer of the property at the
time of the transfer. For further information, see the analysis for 2023 Senate Bill
667.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB667-SSA1,1 3Section 1 . Subchapter XIII of chapter 701 [precedes 701.1301] of the statutes
4is created to read:
SB667-SSA1,1,5 5Chapter 701
SB667-SSA1,2,1
1subchapter xiii
SB667-SSA1,2,22 legacy trusts
SB667-SSA1,2,3 3701.1301 Definitions. In this subchapter:
SB667-SSA1,2,5 4(1) “Advisor" means a person who, under the terms of a legacy trust, is granted
5the power to do any of the following:
SB667-SSA1,2,66 (a) Remove or appoint a trustee of the legacy trust.
SB667-SSA1,2,87 (b) Direct, consent to, or disapprove a trustee's actual or proposed investment,
8distribution, or any other action related to assets of the legacy trust.
SB667-SSA1,2,10 9(2) “Asset" means property of a transferor but does not include any of the
10following:
SB667-SSA1,2,1111 (a) Property to the extent it is encumbered by a valid lien.
SB667-SSA1,2,1312 (b) Property to the extent it is generally exempt under nonbankruptcy law at
13the time of a qualified disposition.
SB667-SSA1,2,1714 (c) Property held as marital property with rights of survivorship to the extent
15that under the law governing the marital property at the time of a qualified
16disposition the property is not subject to process by a creditor holding a claim against
17only one spouse.
SB667-SSA1,2,2018 (d) Property transferred from a nonlegacy trust to a legacy trust to the extent
19that the property would not be subject to attachment under applicable
20nonbankruptcy law that governs the nonlegacy trust.
SB667-SSA1,2,23 21(3) “Claim" means a right to payment, whether or not the right is reduced to
22judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
23disputed, undisputed, legal, equitable, secured, or unsecured.
SB667-SSA1,2,25 24(4) “Creditor" means a person who has a claim against a transferor and
25includes any transferee of, assignee of, or successor to the claim.
SB667-SSA1,3,1
1(5) “Debt" means liability on a claim.
SB667-SSA1,3,5 2(6) “Disposition" means a transfer, conveyance, or assignment of a property
3interest, including a partial, contingent, undivided, or co-ownership property
4interest. “Disposition" includes an exercise of a general power of appointment that
5results in a transfer of property to a trustee but does not include any of the following:
SB667-SSA1,3,76 (a) The release or relinquishment of a property interest that is subject to a
7qualified disposition until the release or relinquishment.
SB667-SSA1,3,98 (b) The exercise of a special power of appointment that results in a transfer of
9property to a trustee.
SB667-SSA1,3,1010 (c) A disclaimer under s. 700.27 or 854.13.
SB667-SSA1,3,13 11(7) “Investment decision" means a decision regarding the retention, purchase,
12sale, exchange, tender, or other action affecting the ownership of or rights in an
13investment.
SB667-SSA1,3,15 14(8) “Legacy trust" means a trust created by a written instrument, the terms of
15which do all of the following:
SB667-SSA1,3,1816 (a) Appoint at least one qualified trustee to accept property that is the subject
17of a disposition, regardless of whether the terms of the trust also appoint a
18nonqualified trustee.
SB667-SSA1,3,2019 (b) Expressly designate the laws of this state to govern the meaning and effect
20of the terms of the trust, in whole or in part.
SB667-SSA1,3,2121 (c) Expressly provide that the trust is irrevocable.
SB667-SSA1,3,2322 (d) Include a spendthrift provision that applies to an interest of a beneficiary
23in trust property, including an interest of a transferor who is a beneficiary.
SB667-SSA1,3,24 24(9) “Lien" has the meaning given in s. 242.01 (8).
SB667-SSA1,3,25 25(10) “Nonlegacy trust" means a trust that is not a legacy trust.
SB667-SSA1,4,1
1(11) “Nonqualified trustee" means a trustee who is not a qualified trustee.
SB667-SSA1,4,3 2(12) “Qualified disposition" means a disposition by a transferor to any trustee
3of a legacy trust.
SB667-SSA1,4,5 4(13) “Qualified trustee" means a trustee who is not a transferor and to whom
5one of the following applies:
SB667-SSA1,4,76 (a) If the trustee is an individual, the individual resides and is domiciled in this
7state.
SB667-SSA1,4,108 (b) If the trustee is a trust company or a bank, the trust company or bank is
9organized under federal law, state law, or the laws of another state, and the trust
10company or bank maintains an office in this state.
SB667-SSA1,4,12 11(14) “Transferor" means a person who directly or indirectly makes a disposition
12to a legacy trust, including a settlor, as defined in s. 701.0103 (23).
SB667-SSA1,4,13 13(15) “Valid lien" has the meaning given in s. 242.01 (13).
SB667-SSA1,4,17 14701.1302 Applicability. (1) Unless the terms of a legacy trust provide
15otherwise, this subchapter governs the construction, operation, and enforcement in
16this state of a legacy trust, whether created in this state or any other state, if any of
17the following applies:
SB667-SSA1,4,1918 (a) Any of the land, rents, issues, or profits that are the subject of a qualified
19disposition are located in this state.
SB667-SSA1,4,2120 (b) Any portion of personal property, interest of money, or dividends of stock
21that is the subject of a qualified disposition is located in this state.
SB667-SSA1,4,2222 (c) The transferor's legal residence is in this state.
SB667-SSA1,4,2523 (d) A qualified trustee of the legacy trust has the power to maintain records and
24prepare income tax returns for the trust, and all or part of the administration of the
25trust is performed in this state.
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