SB667,11,13 11(8) (a) Subject to s. 699.10 (4), no person may bring an action of any kind related
12to a qualified disposition if the period under sub. (3) in which a creditor may bring
13an action against the qualified disposition that is the basis of the action has expired.
SB667,11,2314 (b) An action barred under par. (a) includes an action to enforce a judgment
15entered by a court or other authorized adjudicative body, in law or equity, against a
16trustee or advisor of a legacy trust or against any person involved in the counseling
17in connection with, or the drafting, preparation, execution, administration, or
18funding of a legacy trust. For purposes of this paragraph, “counseling in connection
19with, or the drafting, preparation, execution, administration, or funding of a legacy
20trust" includes any of those actions related to any limited partnership, limited
21liability company, corporation, or similar entity if the limited partnership interests,
22limited liability company interests, stock, or other similar ownership interests in the
23relevant entity are subsequently the subject of a qualified disposition.
SB667,11,25 24(9) If more than one qualified disposition is made to a legacy trust, all of the
25following apply:
SB667,12,3
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.
SB667,12,54 (b) For purposes of determining the order in which property is paid, applied,
5or distributed from a legacy trust, all of the following apply:
SB667,12,86 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.
SB667,12,129 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.
SB667,12,1413 (c) A distribution to a beneficiary is considered to have been made from the most
14recent transfer to the legacy trust.
SB667,12,17 15699.06 Creditor claims against qualified dispositions. (1) If a creditor's
16claim against a qualified disposition under s. 699.05 is successful, in whole or in part,
17all of the following apply:
SB667,12,2018 (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.
SB667,12,2421 (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. 699.05.
SB667,13,3
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. 699.05, all
3of the following apply:
SB667,13,74 1. The trustee has a first lien against the property that was the subject of the
5claim under s. 699.05 in an amount equal to the entire cost, including attorney fees,
6properly incurred by the trustee in defense of the action or proceedings against the
7qualified disposition.
SB667,13,108 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.
SB667,13,1611 (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.
SB667,13,1917 (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.
SB667,13,2220 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.
SB667,13,2423 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.
SB667,14,3
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. 699.05.
SB667,14,5 4699.07 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.
SB667,14,7 6(2) A transferor of a legacy trust may serve as an advisor only in connection
7with investment decisions related to trust assets.
SB667,14,9 8(3) Notwithstanding s. 701.0818 (2), an advisor is a fiduciary unless the terms
9of a legacy trust expressly provide otherwise.
SB667,14,13 10699.08 Rules regarding discretion. Except as otherwise provided under the
11terms 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.
SB667,14,18 14699.09 Discretionary interest not property of a beneficiary. No person,
15including a beneficiary, has a property interest in property of a legacy trust to the
16extent that the distribution of that property is subject to the discretion of a qualified
17trustee or advisor, whether acting alone or in conjunction with another person,
18including a person authorized to veto a distribution from the legacy trust.
SB667,14,20 19699.10 Miscellaneous provisions. (1) If there is a conflict between a
20provision of this chapter and s. 242.07, the provision of this chapter shall control.
SB667,14,24 21(2) A statement in a trust instrument that the trust is governed by “the laws
22of this state" or a statement to similar effect is considered to expressly designate the
23laws of this state to govern the validity, construction, and administration of the trust
24and satisfies s. 699.01 (9) (b).
SB667,15,3
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.
SB667,15,9 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 chapter 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.
SB667,15,11 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:
SB667,15,1412 (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.
SB667,15,1715 (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.
SB667,15,1918 2. If the person making the declaration under subd. 1. is a person other than
19the trustee, the declaration is delivered to the trustee.
SB667,15,2120 (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 chapter.
SB667,2 22Section 2. Initial applicability.
SB667,15,2423 (1) This act first applies to qualified dispositions made on the effective date of
24this subsection.
SB667,15,2525 (End)
Loading...
Loading...