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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.
SB667-SSA1,5,2
1(2) (a) If the transferor is married at the time of a qualified disposition, this
2subchapter applies to the following:
SB667-SSA1,5,43 1. Any of the transferor's individual property that is the subject of the qualified
4disposition.
SB667-SSA1,5,85 2. Any marital property that is the subject of the qualified disposition if the
6transferor's spouse at the time of the disposition was provided with notice of the
7qualified disposition as provided in par. (b) or executed a written consent to the
8qualified disposition after being provided the information set forth in the notice.
SB667-SSA1,5,109 (b) All of the following apply to a notice of a qualified disposition under this
10subchapter:
SB667-SSA1,5,1211 1. The notice shall contain the following language, in capital letters, at or near
12the top of the notice:
SB667-SSA1,5,1413 YOUR SPOUSE OR FORMER SPOUSE IS CREATING A PERMANENT
14TRUST INTO WHICH PROPERTY IS BEING TRANSFERRED.
SB667-SSA1,5,1815 YOUR RIGHTS TO THIS PROPERTY MAY BE AFFECTED DURING YOUR
16MARRIAGE, UPON DIVORCE (INCLUDING THE PAYMENT OF CHILD
17SUPPORT OR ALIMONY OR A DIVISION OR DISTRIBUTION OF PROPERTY IN
18A DIVORCE), OR AT THE DEATH OF YOUR SPOUSE OR FORMER SPOUSE.
SB667-SSA1,5,2019 YOU HAVE A VERY LIMITED PERIOD OF TIME TO OBJECT TO THE
20TRANSFER OF PROPERTY INTO THIS TRUST.
SB667-SSA1,5,2221 YOU MAY, UPON REQUEST TO THE TRUSTEE AT THE ADDRESS BELOW,
22BE FURNISHED A COPY OF THE TRUST DOCUMENT.
SB667-SSA1,5,2423 IF YOU HAVE ANY QUESTIONS, YOU SHOULD IMMEDIATELY SEEK
24INDEPENDENT LEGAL ADVICE.
SB667-SSA1,6,2
1IF YOU FAIL TO OBJECT WITHIN 30 DAYS, YOU WILL HAVE
2CONSENTED TO THE TRANSFER OF PROPERTY INTO THIS TRUST.
SB667-SSA1,6,33 .... (address)
SB667-SSA1,6,54 2. The notice shall contain a description of the property that is the subject of
5the qualified disposition.
SB667-SSA1,6,86 3. The notice may require that any person who is eligible to receive information
7under this subsection be bound by the duty of confidentiality that binds the trustee
8before receiving such information from the trustee.
SB667-SSA1,6,109 4. The notice shall be provided by the transferor, the transferor's agent, the
10trustee, or another fiduciary of the legacy trust.
SB667-SSA1,6,1511 (c) If a notice is provided under this subsection before the qualified disposition,
12the period to commence an action under s. 701.1306 (3) begins to run on the date the
13notice is provided. The period to commence an action to challenge a qualified
14disposition under this subsection and s. 701.1306 (3) may not exceed the period set
15forth in s. 893.425.
SB667-SSA1,6,19 16701.1303 Spendthrift provision; legacy trust. (1) Notwithstanding s.
17701.0502 (1), a spendthrift provision of a legacy trust is not invalid because a
18transferor or a person who is treated as a settlor under s. 701.0505 (2) is also a
19beneficiary of the legacy trust.
SB667-SSA1,7,2 20(2) Except as otherwise provided in this section, a spendthrift provision in a
21legacy trust restrains both voluntary and involuntary transfers of a transferor's
22interest in the legacy trust. A spendthrift provision in a legacy trust is enforceable
23under any applicable nonbankruptcy law within the meaning of 11 USC 541 (c) (2)
24regardless of whether the legacy trust instrument makes any reference to that
25enforceability. The terms of a legacy trust, including in a spendthrift provision, may

1provide for any other restraint of alienation that are permitted under the laws of this
2state.
SB667-SSA1,7,4 3(3) Section 701.0503 (2) does not apply to a spendthrift provision in a legacy
4trust.
SB667-SSA1,7,5 5(4) Section 701.0505 (1) (a) 2. does not apply to a legacy trust.
SB667-SSA1,7,8 6(5) Nothing in this section may deprive a beneficiary of any exemption right
7that the beneficiary has under any applicable law after the trust property is received
8by the beneficiary.
SB667-SSA1,7,12 9701.1304 Implied power to revoke or to transfer an interest in a legacy
10trust.
None of the following is considered to be, including in combination, a power
11to revoke a legacy trust or to voluntarily or involuntarily transfer an interest in the
12legacy trust:
SB667-SSA1,7,14 13(1) A transferor's power to veto a distribution of income or principal from the
14legacy trust.
SB667-SSA1,7,17 15(2) A special power of appointment, as defined in s. 702.02 (7), exercisable by
16a transferor by will or another written document that is effective during the lifetime
17of the transferor or upon the death of the transferor.
SB667-SSA1,7,19 18(3) The right of a transferor to receive income from the legacy trust in
19accordance with the terms of the legacy trust.
SB667-SSA1,7,25 20(4) That a transferor is a beneficiary of the legacy trust regardless of whether
21the trust qualifies as a charitable remainder annuity trust under 26 USC 664 (d) (1)
22or as a charitable remainder unitrust under 26 USC 664 (d) (2), even if the transferor
23has the right to release the transferor's retained interest, in whole or in part, in the
24charitable remainder annuity trust or charitable remainder unitrust at any time in
25favor of one or more of the remainder beneficiaries of the legacy trust.
SB667-SSA1,8,6
1(5) A transferor's annual receipt of a percentage of the value of the legacy trust
2assets, as determined in accordance with the terms of the trust, as long as the amount
3the transferor receives in a year is not more than the amount defined as the income
4of the legacy trust under 26 USC 643 (b) or, for any qualified retirement plan or
5eligible deferred compensation plan that is an asset of the legacy trust, the minimum
6required distribution, as defined in 26 USC 4974 (b).
SB667-SSA1,8,8 7(6) A transferor's potential or actual receipt or use of principal or income of the
8legacy trust if the potential or actual receipt or use is the result of any of the following:
SB667-SSA1,8,129 (a) A qualified trustee's discretion. For purposes of this paragraph, a qualified
10trustee has discretion with respect to the distribution and use of the principal and
11income of a legacy trust unless the terms of the legacy trust expressly provide
12otherwise.
SB667-SSA1,8,1413 (b) A qualified trustee applying a standard that governs the distribution or use
14of principal or income of the legacy trust.
SB667-SSA1,8,1915 (c) A qualified trustee acting at the direction of an advisor if the advisor's
16direction is discretionary or pursuant to a standard that governs the distribution or
17use of principal or income under the terms of the legacy trust. For purposes of this
18paragraph, an advisor's direction is discretionary unless the terms of the legacy trust
19expressly provide otherwise.
SB667-SSA1,8,21 20(7) A transferor's potential or actual right to use real or tangible personal
21property owned by the legacy trust.
SB667-SSA1,8,24 22(8) A transferor's right to possess and enjoy a qualified interest, as defined in
2326 USC 2702 (b), or property held under a qualified personal residence trust, as
24described in 26 USC 2702 (c).
SB667-SSA1,9,3
1(9) A qualified trustee's mandatory or discretionary power to use the income
2or principal of the legacy trust to pay, in whole or in part, income taxes due on the
3income of the legacy trust.
SB667-SSA1,9,6 4(10) That a qualified trustee, whether pursuant to the qualified trustee's
5discretion, the terms of the legacy trust, or the direction of an advisor pays any of the
6following:
SB667-SSA1,9,77 (a) A transferor's debt that is outstanding at the time of the transferor's death.
SB667-SSA1,9,88 (b) The expenses of administering the transferor's estate.
SB667-SSA1,9,109 (c) Any estate, gift, generation-skipping transfer, or inheritance tax on behalf
10of the transferor or the transferor's estate.
SB667-SSA1,9,12 11(11) A provision in the legacy trust that transfers all or part of the trust assets
12to the transferor's estate or revocable trust.
SB667-SSA1,9,16 13(12) A transferor is a beneficiary of the legacy trust and is authorized to receive
14a payment of income or principal from a qualified annuity interest, as defined in 26
15CFR 25.2702-3 (b)
, or a qualified unitrust interest, as defined in 26 CFR 25.2702-3
16(c)
.
SB667-SSA1,9,21 17701.1305 Transferor's powers. (1) A transferor of a legacy trust has only
18the powers and rights that are granted to the transferor by the trust instrument. An
19agreement or understanding, express or implied, between the transferor and a
20trustee that attempts to grant or permit the retention of greater rights or authority
21than is stated in the trust instrument is void.
SB667-SSA1,9,24 22(2) Notwithstanding s. 701.1304, the terms of a legacy trust may grant a
23transferor, whether or not the transferor is a trustee, the power to do any of the
24following:
SB667-SSA1,9,2525 (a) Remove and replace a trustee.
SB667-SSA1,10,1
1(b) Remove and replace an advisor.
SB667-SSA1,10,22 (c) Direct trust investments.
SB667-SSA1,10,33 (d) Execute any other managerial duties.
SB667-SSA1,10,5 4701.1306 Limitations on actions, remedies, and claims. (1) In this
5section:
SB667-SSA1,10,66 (a) “Cash" means the coins or currency of the United States or any other nation.
SB667-SSA1,10,157 (b) “Cash equivalent" means a monetary instrument or device that is commonly
8or routinely accepted instead of cash, including a certified or uncertified check;
9money order; bank draft; electronic transfer of funds; negotiable instrument or an
10instrument endorsed in blank or in bearer form; securities issued or guaranteed by
11the United States, a state, or a state or federal agency; funds on deposit in a savings
12or checking account or any similar account; funds on deposit in a money market
13account or similar account; or demand deposit account, time deposit account, or
14savings deposit account at any bank, savings and loan association, brokerage house,
15or similar institution.
SB667-SSA1,10,1716 (c) “Fungible asset" means an asset other than money that is interchangeable
17for commercial purposes and the properties of which are essentially identical.
SB667-SSA1,10,1818 (d) “Money" means cash or a cash equivalent.
SB667-SSA1,11,2 19(2) Subject to sub. (3) and s. 701.1311 (4), a creditor may not bring an action
20of any kind, including an action to enforce a judgment, an action at law or in equity,
21or an action for an attachment or other final or provisional remedy, against a person
22who made or received a qualified disposition, against a trustee of a legacy trust, or
23against or involving any property that is the subject of a qualified disposition or is
24otherwise held by a legacy trust, except that, subject to s. 701.1307, a creditor may

1bring an action against a qualified disposition of an asset if the transferor made the
2qualified disposition with the intent to hinder, delay, or defraud the creditor.
SB667-SSA1,11,4 3(3) A creditor may bring an action against a qualified disposition under sub.
4(2) only if the creditor satisfies one of the following:
SB667-SSA1,11,65 (a) The creditor was a creditor of the transferor when the qualified disposition
6was made and the creditor commences the action within the later of the following:
SB667-SSA1,11,77 1. Eighteen months after the qualified disposition.
SB667-SSA1,11,108 2. Six months after the creditor discovers or reasonably should have discovered
9the qualified disposition. For purposes of this subdivision, a creditor is considered
10to have discovered a transfer at the time a public record is made of the transfer.
SB667-SSA1,11,1311 (b) The creditor becomes a creditor after the qualified disposition is made, and
12the creditor commences the action no later than 18 months after the qualified
13disposition.
SB667-SSA1,11,20 14(4) In an action against a qualified disposition under sub. (2), each creditor has
15the burden of proving by clear and convincing evidence that the transferor made the
16qualified disposition with the intent to hinder, delay, or defraud the creditor. Proof
17by one creditor that a transferor made a qualified disposition with the intent to
18hinder, delay, or defraud that creditor is not proof that the transferor made a
19qualified disposition with the intent to hinder, delay, or defraud any other creditor
20and does not invalidate any other transfer of property to the legacy trust.
SB667-SSA1,11,22 21(5) Subject to s. 701.1311 (4), with respect to a qualified disposition, a creditor
22has only the rights and remedies that are provided in this section and s. 701.1307.
SB667-SSA1,12,2 23(6) Subject to sub. (8), an advisor may not be found liable for damages a person
24suffers in connection with a legacy trust unless the person demonstrates by clear and
25convincing evidence that the advisor's actions violated the laws of this state, that the

1advisor acted knowingly and in bad faith, and that the advisor's actions directly
2caused the damages suffered by the person.
SB667-SSA1,12,7 3(7) Subject to sub. (8), a trustee of a legacy trust may not be found liable to a
4person who is not a beneficiary or a transferor of the legacy trust unless the person
5demonstrates by clear and convincing evidence that the trustee's actions violated the
6laws of this state, that the trustee acted knowingly and in bad faith, and that the
7trustee's actions directly caused the damages suffered by the person.
SB667-SSA1,12,11 8(8) (a) Subject to s. 701.1311 (4), no person may bring an action of any kind
9related to a qualified disposition if the period under sub. (3) in which a creditor may
10bring an action against the qualified disposition that is the basis of the action has
11expired.
SB667-SSA1,12,2112 (b) An action barred under par. (a) includes an action to enforce a judgment
13entered by a court or other authorized adjudicative body, in law or equity, against a
14trustee or advisor of a legacy trust or against any person involved in the counseling
15in connection with, or the drafting, preparation, execution, administration, or
16funding of a legacy trust. For purposes of this paragraph, “counseling in connection
17with, or the drafting, preparation, execution, administration, or funding of a legacy
18trust" includes any of those actions related to any limited partnership, limited
19liability company, corporation, or similar entity if the limited partnership interests,
20limited liability company interests, stock, or other similar ownership interests in the
21relevant entity are subsequently the subject of a qualified disposition.
SB667-SSA1,12,23 22(9) If more than one qualified disposition is made to a legacy trust, all of the
23following apply:
SB667-SSA1,13,3
1(a) For purposes of determining whether a creditor's claim against a qualified
2disposition is barred under sub. (3), each qualified disposition shall be evaluated
3individually without regard to any subsequent qualified disposition.
SB667-SSA1,13,54 (b) For purposes of determining the order in which property is paid, applied,
5or distributed from a legacy trust, all of the following apply:
SB667-SSA1,13,86 1. A payment, application, or distribution of money is considered to be made
7from or with the money most recently received or acquired by any trustee of a legacy
8trust except to the extent that it is proven otherwise beyond a reasonable doubt.
SB667-SSA1,13,129 2. A payment, application, or distribution of a fungible asset is considered to
10be made from or with the fungible asset most recently received or acquired by any
11trustee of a legacy trust except to the extent that it is proven otherwise by clear and
12convincing evidence.
SB667-SSA1,13,1413 (c) A distribution to a beneficiary is considered to have been made from the most
14recent transfer to the legacy trust.
SB667-SSA1,13,17 15701.1307 Creditor claims against qualified dispositions. (1) If a
16creditor's claim against a qualified disposition under s. 701.1306 is successful, in
17whole or in part, all of the following apply:
SB667-SSA1,13,2018 (a) The creditor may recover damages from trust assets only to the extent
19necessary to satisfy a transferor's debt to the creditor and any part of the qualified
20disposition that is not used to satisfy the debt remains subject to the legacy trust.
SB667-SSA1,13,2421 (b) Any other qualified disposition to a trustee of the legacy trust and the legacy
22trust remain valid, including a qualified disposition of a partial, co-ownership, or
23undivided interest in property by a transferor whose transfer was the subject of a
24creditor claim under s. 701.1306.
SB667-SSA1,14,3
1(c) If a court is satisfied that the trustee did not act in bad faith in accepting
2or administering the property that was the subject of the claim under s. 701.1306,
3all of the following apply:
SB667-SSA1,14,74 1. The trustee has a first lien against the property that was the subject of the
5claim under s. 701.1306 in an amount equal to the entire cost, including attorney
6fees, properly incurred by the trustee in defense of the action or proceedings against
7the qualified disposition.
SB667-SSA1,14,108 2. Any recovery for damages under par. (a) is subject to the fees, costs, and
9preexisting rights, claims, and interests of the trustee and of any predecessor trustee
10that has not acted in bad faith.
SB667-SSA1,14,1611 (d) If a court is satisfied that a beneficiary of the legacy trust did not act in bad
12faith in receiving a distribution from the legacy trust, the creditor's recovery of the
13qualified disposition is subject to the right of the beneficiary to retain that
14distribution if the distribution was the result of an exercise of a trust power or of
15discretion vested in a trustee or advisor and that power or discretion was exercised
16before the creditor commenced the action against the qualified disposition.
SB667-SSA1,14,1917 (e) 1. For purposes of par. (c), a trustee is not considered to have acted in bad
18faith solely because the trustee accepted the property that is the subject of the
19recoverable qualified disposition.
SB667-SSA1,14,2220 2. For purposes of par. (d), a beneficiary, including a beneficiary who is a
21transferor, is not considered to have acted in bad faith solely because the beneficiary
22accepted a distribution made in accordance with the terms of the legacy trust.
SB667-SSA1,14,2423 3. For purposes of pars. (c) and (d), a creditor has the burden of proving by clear
24and convincing evidence that a trustee or a beneficiary acted in bad faith.
SB667-SSA1,15,3
1(2) A court shall award costs and reasonable attorney fees to a prevailing party
2in a final judgment in an action that is wholly or partially brought under this section
3or s. 701.1306.
SB667-SSA1,15,5 4701.1308 Trust advisors; eligibility; default fiduciary status. (1) Except
5as provided in sub. (2), any person is eligible to serve as an advisor of a legacy trust.
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