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.
SB667-SSA1,15,7 6(2) A transferor of a legacy trust may serve as an advisor only in connection
7with investment decisions related to trust assets.
SB667-SSA1,15,9 8(3) Notwithstanding s. 701.0818 (2), an advisor is a fiduciary unless the terms
9of a legacy trust expressly provide otherwise.
SB667-SSA1,15,13 10701.1309 Rules regarding discretion. Except as otherwise provided under
11the terms of a legacy trust, each trustee and each advisor of the legacy trust has the
12greatest discretion permitted by law in connection with all matters of trust
13administration, trust distributions, and any other trustee or advisor decision.
SB667-SSA1,15,18 14701.1310 Discretionary interest not property of a beneficiary. No
15person, including a beneficiary, has a property interest in property of a legacy trust
16to the extent that the distribution of that property is subject to the discretion of a
17qualified trustee or advisor, whether acting alone or in conjunction with another
18person, including a person authorized to veto a distribution from the legacy trust.
SB667-SSA1,15,21 19701.1311 Miscellaneous provisions. (1) If there is a conflict between a
20provision of this subchapter and s. 242.07, the provision of this subchapter shall
21control.
SB667-SSA1,15,25 22(2) A statement in a trust instrument that the trust is governed by “the laws
23of this state" or a statement to similar effect is considered to expressly designate the
24laws of this state to govern the validity, construction, and administration of the trust
25and satisfies s. 701.1301 (8) (b).
SB667-SSA1,16,3
1(3) A disposition by a nonqualified trustee to a qualified trustee of a legacy trust
2is not disqualified from being a qualified disposition on the sole basis that the
3nonqualified trustee is a trustee of a trust that is a nonlegacy trust.
SB667-SSA1,16,9 4(4) A valid lien that is attached to property before the property is the subject
5of a qualified disposition survives the disposition, and the trustee of the legacy trust
6takes the property subject to the lien and subject to any agreements that created or
7perfected the lien. Nothing in this subchapter may be construed to authorize any
8disposition that is prohibited by the terms of an agreement, note, guaranty,
9mortgage, indenture, instrument, undertaking, or other document.
SB667-SSA1,16,11 10(5) A trust administered under the laws of another state or a foreign
11jurisdiction is considered to be a legacy trust if all of the following apply:
SB667-SSA1,16,1412 (a) The trustee of the trust complies with the requirements in the trust
13instrument and any applicable requirements under the laws of the state or foreign
14jurisdiction in which the trust is being administered.
SB667-SSA1,16,1715 (b) 1. The trustee or other person having the power to transfer the domicile of
16the trust declares in writing that the trustee or other person intends to transfer the
17domicile of the trust to this state.
SB667-SSA1,16,1918 2. If the person making the declaration under subd. 1. is a person other than
19the trustee, the declaration is delivered to the trustee.
SB667-SSA1,16,2120 (c) At the time of or immediately following the transfer of the trustee to this
21state, the trust satisfies the definition of a legacy trust under this subchapter.
SB667-SSA1,2 22Section 2 . Initial applicability.
SB667-SSA1,16,2423 (1) This act first applies to qualified dispositions made on the effective date of
24this subsection.
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