AB490,68,2420 (b) Except as otherwise provided by the trustee of the first trust, the
21appointment of part but not all of the assets of the first trust in favor of the 2nd trust
22does not include subsequently discovered assets belonging to the first trust or assets
23paid to or acquired by the first trust subsequent to the appointment in favor of the
242nd trust, which remain the assets of the first trust.
AB490,69,3
1(7) Liability. (a) This section does not create or imply a duty on a trustee to
2appoint assets to a 2nd trust under sub. (2). A trustee that does not appoint assets
3to a 2nd trust under sub. (2) is not liable for the failure to do so.
AB490,69,64 (b)   A trustee who appoints assets to a 2nd trust under sub. (2) is not liable to
5any beneficiary for any loss related to the appointment unless the trustee did not
6appoint the assets in good faith.
AB490,69,8 7(8) Miscellaneous provisions. (a) The appointment of assets to a 2nd trust
8under sub. (2) is not an exercise of a general power of appointment.
AB490,69,119 (b) A trustee may appoint assets to a 2nd trust under sub. (2) even if the first
10trust includes a spendthrift clause or a provision that prohibits amendment or
11revocation of the trust.
AB490,69,1512 (c) This section does not limit a trustee who has a power to invade principal to
13appoint property in further trust to the extent the power arises under the terms of
14the first trust or under any other section of this chapter or under another provision
15of law or under common law.
AB490,69,2016 (d) The restriction relating to a trustee under sub. (3) (c) does not preclude a
17cotrustee who does not have a beneficial interest in the first trust from appointing
18assets to a 2nd trust under sub. (2) even if the terms of the first trust, applicable law,
19or other circumstances would otherwise require the majority or unanimous action of
20the trustees of the first trust.
AB490,69,2321 (e) For purposes of this section, if beneficiaries of a first trust are defined as a
22class of persons, the class shall include any person who falls within the class of
23persons after the trustee appoints assets to the 2nd trust.
AB490,70,3
1(f) Notwithstanding s. 701.0103 (23), a trustee of a first trust who appoints
2assets to a 2nd trust under sub. (2) or creates a 2nd trust instrument under sub. (4)
3is not the settlor of the 2nd trust.
AB490,70,74 (g) To the extent a directing party or trust protector has the power to invade
5the principal of a first trust, as described in sub. (2), this section applies to the
6directing party or trust protector as if the directing party or trust protector is a
7trustee.
AB490,93 8Section 93. 701.05 of the statutes is repealed.
AB490,94 9Section 94. Subchapter V (title) of chapter 701 [precedes 701.0501] of the
10statutes is created to read:
AB490,70,1111 chapter 701
AB490,70,1212 subchapter v
AB490,70,1413 creditor's claims; spendthrift
14 and discretionary trusts
AB490,95 15Section 95. 701.0501 of the statutes is created to read:
AB490,70,21 16701.0501 Rights of beneficiary's creditor or assignee. (1) (a) To the
17extent a beneficiary's interest is not protected by a spendthrift provision, the court
18may authorize a judgment creditor or an assignee of the beneficiary to reach the
19beneficiary's interest by attachment of present or future distributions to or for the
20benefit of the beneficiary or other means. The court may limit the award to such
21relief as is appropriate under the circumstances.
AB490,70,2222 (b) This subsection does not apply to a trust for an individual with a disability.
AB490,70,24 23(2) A trustee is not liable to any creditor of a beneficiary for any distributions
24made to or for the benefit of the beneficiary if any of the following applies:
AB490,70,2525 (a) The beneficiary's interest is protected by a spendthrift provision.
AB490,71,1
1(b) The trust is a trust for an individual with a disability.
AB490,96 2Section 96. 701.0502 of the statutes is created to read:
AB490,71,4 3701.0502 Spendthrift provision. (1) A spendthrift provision is valid only
4if any of the following applies:
AB490,71,65 (a) The beneficiary is a person other than the settlor and is not treated as the
6settlor under s. 701.0505 (2).
AB490,71,77 (b) The trust is a trust for an individual with a disability.
AB490,71,10 8(2) Subject to sub. (1), a term of a trust providing that the interest of a
9beneficiary is held subject to a spendthrift trust, or words of similar import, restrains
10both a voluntary and involuntary transfer of the beneficiary's interest.
AB490,71,14 11(3) A beneficiary may not transfer an interest in a trust in violation of a valid
12spendthrift provision and, except as otherwise provided in this subchapter, a creditor
13or assignee of the beneficiary may not attach, garnish, execute on, or otherwise reach
14the interest or a distribution by the trustee before its receipt by the beneficiary.
AB490,71,19 15(4) Real property or tangible personal property that is owned by the trust but
16that is made available for a beneficiary's occupancy or use in accordance with the
17trustee's authority under the trust instrument may not be considered to have been
18distributed by the trustee or received by the beneficiary for purposes of allowing a
19creditor or assignee of the beneficiary to reach the property.
AB490,97 20Section 97. 701.0503 (title) of the statutes is created to read:
AB490,71,21 21701.0503 (title) Exceptions to spendthrift provision.
AB490,98 22Section 98. 701.0504 of the statutes is created to read:
AB490,72,2 23701.0504 Discretionary trusts; effect of standard. (1) For purposes of this
24subchapter, and except as provided in sub. (3), a beneficiary's interest in a trust that
25is subject to the trustee's discretion does not constitute an interest in property or an

1enforceable right even if the discretion is expressed in the form of a standard of
2distribution or the beneficiary is then serving as sole trustee or cotrustee.
AB490,72,7 3(2)   Except as provided in this subchapter, a creditor or other claimant may not
4attach present or future distributions from a beneficiary's interest in property or an
5enforceable right, obtain an order from a court forcing the judicial sale of the interest
6or compelling the trustee to make distributions, or reach the interest or right by any
7other means, even if the trustee has abused the trustee's discretion.
AB490,72,11 8(3) Subsections (1) and (2) do not apply if a beneficiary is acting as sole trustee
9of a trust for his or her benefit and his or her discretion to make distributions to
10himself or herself is not limited by an ascertainable standard or the consent of a party
11holding an adverse interest to the beneficiary.
AB490,72,14 12(4)   (a) Except as provided in par. (b), this section does not limit the right of a
13beneficiary to maintain a judicial proceeding against a trustee for an abuse of
14discretion or failure to comply with a standard for distribution.
AB490,72,1615 (b) The right of a beneficiary described in par. (a) may not be exercised by a
16creditor.
AB490,99 17Section 99. 701.0505 of the statutes is created to read:
AB490,72,20 18701.0505 Creditor's claim against settlor. (1) (a) Whether or not the terms
19of a trust include a spendthrift provision and except as provided in par. (b), the
20following rules apply to claims of a settlor's creditors:
AB490,72,2221 1. During the lifetime of the settlor, the property of a revocable trust is subject
22to claims of the settlor's creditors.
AB490,73,523 2. With respect to an irrevocable trust that is not a trust for an individual with
24a disability, upon application of a judgment creditor of the settlor, the court may, if
25the trust instrument requires or authorizes the trustee to make payments of income

1or principal to or for the settlor, order the trustee to satisfy part or all of the judgment
2out of part or all of the payments of income or principal as they are due, presently
3or in the future, or which are payable in the trustee's discretion. If a trust has more
4than one settlor, the amount the judgment creditor of a particular settlor may reach
5may not exceed the settlor's interest in the trust.
AB490,73,126 3. After the death of a settlor, and subject to the settlor's right to direct the
7source from which liabilities will be paid, the property of a trust that was revocable
8at the settlor's death is subject to claims of the settlor's creditors, costs of
9administration of the settlor's estate, the expenses of the settlor's funeral and
10disposal of remains, and statutory allowances to a surviving spouse and children to
11the extent the settlor's probate estate is inadequate to satisfy those claims, costs,
12expenses, and allowances.
AB490,73,1413 (b) Assets of a trust that are exempt from claims of creditors under other
14statutes are not subject to par. (a).
AB490,73,15 15(2) For purposes of this subchapter, all of the following apply:
AB490,73,1816 (a) During the period the power may be exercised, the holder of a power of
17withdrawal is treated in the same manner as the settlor of a revocable trust to the
18extent of the property subject to the power.
AB490,73,2019 (e) 1. Contributions to the following trusts are not considered to have been
20contributed by the settlor:
AB490,73,2421 a. An irrevocable marital trust that is treated as qualified terminable interest
22property under section 2523 (f) of the Internal Revenue Code if after the death of the
23settlor's spouse the settlor is a beneficiary of the trust or an irrevocable trust that
24receives property from the trust.
AB490,74,4
1b. An irrevocable marital trust that is treated as a general power of
2appointment trust under section 2523 (e) of the Internal Revenue Code if after the
3death of the settlor's spouse the settlor is a beneficiary of the trust or an irrevocable
4trust that receives property from the trust.
AB490,74,75 c. An irrevocable trust for the settlor's spouse if after the death of the settlor's
6spouse the settlor is a beneficiary of the trust or an irrevocable trust that receives
7property from the trust.
AB490,74,108 d. An irrevocable trust for the benefit of a person, the settlor of which is the
9person's spouse, regardless of whether or when the person was the settlor of an
10irrevocable trust for the benefit of that spouse.
AB490,74,1211 e. An irrevocable trust for the benefit of a person to the extent that the property
12of the trust was subject to a general power of appointment in another person.
AB490,74,1413 2. A person who would otherwise be treated as a settlor of a trust described in
14subd. 1. a. to e. is not treated as a settlor of the trust.
AB490,74,1815 3. For purposes of this paragraph, notwithstanding s. 701.0103 (3),
16"beneficiary" means a person who satisfies s. 701.0103 (3) (a) or (b) and who is
17designated in a trust instrument or through the exercise of a special or general power
18of appointment.
AB490,74,20 19(3) Any order entered by a court under this section is subject to modification
20upon application of an interested person.
AB490,100 21Section 100. 701.0506 of the statutes is created to read:
AB490,75,2 22701.0506 Overdue distribution. (1) In this section, "mandatory
23distribution" means a distribution of income or principal that the trustee is required
24to make to a beneficiary under the terms of the trust, including a distribution upon

1termination of the trust. "Mandatory distribution" does not include a distribution
2subject to the exercise of the trustee's discretion even if any of the following applies:
AB490,75,33 (a) The discretion is expressed in the form of a standard of distribution.
AB490,75,54 (b) The terms of the trust authorizing a distribution couple language of
5discretion with language of direction.
AB490,75,10 6(2) Whether or not a trust contains a spendthrift provision, a creditor or
7assignee of a beneficiary may reach a mandatory distribution of income or principal,
8including a distribution upon termination of the trust, if the trustee has not made
9the distribution to the beneficiary within a reasonable time after the designated
10distribution date.
AB490,101 11Section 101. 701.0507 of the statutes is created to read:
AB490,75,14 12701.0507 Personal obligations of trustee. Trust property is not subject to
13personal obligations of the trustee, even if the trustee becomes insolvent or
14bankrupt.
AB490,102 15Section 102. 701.06 (title), (1), (2), (3) and (6) (title) and (a) of the statutes are
16repealed.
AB490,103 17Section 103. 701.06 (4) of the statutes is renumbered 701.0503 (1), and
18701.0503 (1) (intro.) and (b), as renumbered, is amended to read:
AB490,75,2219 701.0503 (1) Claims for child support. (intro.) Notwithstanding any provision
20in the creating instrument or subs. (1) and (2)
s. 701.0502, upon application of a
21person having a valid order directing a beneficiary to make payment for support of
22the beneficiary's child, the court may do any of the following:
AB490,76,223 (b) In If the case of a beneficiary under a discretionary may receive income or
24principal at the trustee's discretion under the
trust, order the trustee to satisfy part
25or all of the claim out of part or all of future payments of income or principal which

1that are to be made pursuant to the exercise of the trustee's discretion in favor of such
2beneficiary.
AB490,104 3Section 104. 701.06 (5) (intro.) and (a) of the statutes are renumbered
4701.0503 (2) (intro.) and (a) and amended to read:
AB490,76,125 701.0503 (2) Claims for public support. (intro.) Notwithstanding any
6provision in the creating instrument or subs. (1) and (2)
s. 701.0502 and except as
7provided in sub. (3)
, if the settlor is legally obligated to pay for the public support of
8a beneficiary under s. 46.10, 49.345, or 301.12 or the beneficiary is legally obligated
9to pay for the beneficiary's public support or that for support furnished to the
10beneficiary's spouse or minor child under s. 46.10, 49.345, or 301.12, upon
11application by the appropriate state department or county official, the court may do
12any of the following
:
AB490,76,1513 (a) If such the beneficiary is entitled to receive income or principal under the
14trust, order the trustee to satisfy part or all of the liability out of part or all of
15payments of income or principal as they are due, presently or in the future;
AB490,105 16Section 105. 701.06 (5) (b) of the statutes is renumbered 701.0503 (2) (b) 1. and
17amended to read:
AB490,76,2318 701.0503 (2) (b) 1. Except as otherwise provided in par. (c), in the case of a
19beneficiary under a discretionary trust
subd. 2., if the beneficiary may receive income
20or principal at the trustee's discretion under the trust
, order the trustee to satisfy
21part or all of the liability out of part or all of future payments of income or principal
22which are to be made pursuant to the exercise of the trustee's discretion in favor of
23such the beneficiary; .
AB490,106 24Section 106. 701.06 (5) (c) of the statutes is renumbered 701.0503 (2) (b) 2. and
25amended to read:
AB490,77,5
1701.0503 (2) (b) 2. In the case of a beneficiary under a discretionary trust who
2may receive income or principal of the trust at the trustee's discretion and
who is a
3settlor or a spouse or minor child of the settlor, order the trustee to satisfy part or all
4of the liability without regard to whether the trustee has then exercised or may
5thereafter exercise the trustee's discretion in favor of the beneficiary.
AB490,107 6Section 107. 701.06 (5m) of the statutes is renumbered 701.0503 (3) and
7amended to read:
AB490,77,168 701.0503 (3) Trust for disabled an individual with a disability. Subsection
9(5) (2) does not apply to any trust that is established for the benefit of an individual
10who has with a disability which has continued or can be expected to continue
11indefinitely, substantially impairs the individual from adequately providing for his
12or her own care or custody, and constitutes a substantial handicap to the afflicted
13individual if the trust does not result in ineligibility for public assistance under ch.
1449. A trustee of a trust which is exempt from claims for public support under this
15subsection shall notify the county department under s. 46.215 or 46.22 in the county
16where the disabled beneficiary resides of the existence of the trust
.
AB490,108 17Section 108. 701.06 (6) (b) of the statutes is renumbered 701.0505 (2) (b), and
18701.0505 (2) (b) 2., as renumbered, is amended to read:
AB490,77,2119 701.0505 (2) (b) 2. The beneficiary's right to withdraw part of the trust
20property, to the extent that the value of the property affected by the lapse, waiver,
21or release in any year does not exceed the greater of the amount in following:
AB490,77,2322 a. Section The amount referenced in section 2041 (b) (2) or 2514 (e), of the
23Internal Revenue Code of 1986.
AB490,78,224 b. Section The amount referenced in section 2503 (b), of the Internal Revenue
25Code of 1986 for each individual other than the beneficiary who makes a transfer to

1the trust or who is deemed to make a transfer to the trust pursuant to an election to
2split gifts under section 2513 (a) of the Internal Revenue Code
.
AB490,109 3Section 109. 701.06 (6) (c) of the statutes is renumbered 701.0505 (2) (c), and
4701.0505 (2) (c) (intro.), 1. a. and b. and 4., as renumbered, are amended to read:
AB490,78,95 701.0505 (2) (c) (intro.) A beneficiary of a trust is not a settlor, has not made a
6voluntary or involuntary transfer of the beneficiary's interest in the trust, or and
7does not have the power to make a voluntary or involuntary transfer of the
8beneficiary's interest in the trust solely because the beneficiary holds or, exercises,
9or allows in any capacity, any of the following:
AB490,78,1110 1. a. Exercisable only on with the consent of another person holding an interest
11adverse to the beneficiary's interest.
AB490,78,1312 b. Limited by an ascertainable standard, such as health, education, support,
13or maintenance
of the beneficiary.
AB490,78,1414 4. A presently exercisable right described in par. (b) 2. sub. (2) (b).
AB490,110 15Section 110. 701.06 (6) (d) of the statutes is renumbered 701.0505 (2) (d).
AB490,111 16Section 111. 701.06 (7) of the statutes is renumbered 701.0503 (4) and
17amended to read:
AB490,78,2018 701.0503 (4) Subsequent modification of court's order. Any order entered by
19a court under sub. (4), (5) (1) or (6) (a) is subject to modification (2) may be modified
20upon application of an interested person.
AB490,112 21Section 112. 701.06 (8) of the statutes is renumbered 701.0503 (5) and
22amended to read:
AB490,78,2523 701.0503 (5) Exempt assets. Assets of a trust, to the extent they that are
24exempt from claims of creditors under other statutes, shall are not be subject to sub.
25(4), (5), (1) or (6) (a) (2).
AB490,113
1Section 113. Subchapter VI (title) of chapter 701 [precedes 701.0601] of the
2statutes is created to read:
AB490,79,33 chapter 701
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