SB667,5,3
1(b) If the trustee is a trust company or a bank, the trust company or bank is
2organized under federal law, state law, or the laws of another state, and the trust
3company or bank maintains an office in this state.
SB667,5,4 4(18) “Spendthrift provision" has the meaning given in s. 701.0103 (25).
SB667,5,6 5(19) “Transferor" means a person who directly or indirectly makes a disposition
6to a legacy trust, including a settlor, as defined in s. 701.0103 (23).
SB667,5,7 7(20) “Valid lien" has the meaning given in s. 242.01 (13).
SB667,5,11 8699.015 Applicability. Unless the terms of a legacy trust provide otherwise,
9this chapter governs the construction, operation, and enforcement in this state of a
10legacy trust, whether created in this state or any other state, if any of the following
11applies:
SB667,5,13 12(1) Any of the land, rents, issues, or profits that are the subject of a qualified
13disposition are located in this state.
SB667,5,15 14(2) Any portion of personal property, interest of money, or dividends of stock
15that is the subject of a qualified disposition is located in this state.
SB667,5,16 16(3) The transferor's legal residence is in this state.
SB667,5,19 17(4) A qualified trustee of the legacy trust has the power to maintain records and
18prepare income tax returns for the trust, and all or part of the administration of the
19trust is performed in this state.
SB667,5,23 20699.02 Spendthrift provision; legacy trust. (1) Notwithstanding s.
21701.0502 (1), a spendthrift provision of a legacy trust is not invalid because a
22transferor or a person who is treated as a settlor under s. 701.0505 (2) is also a
23beneficiary of the legacy trust.
SB667,6,6 24(2) Except as otherwise provided in this section, a spendthrift provision in a
25legacy trust restrains both voluntary and involuntary transfers of a transferor's

1interest in the legacy trust. A spendthrift provision in a legacy trust is enforceable
2under any applicable nonbankruptcy law within the meaning of 11 USC 541 (c) (2)
3regardless of whether the legacy trust instrument makes any reference to that
4enforceability. The terms of a legacy trust, including in a spendthrift provision, may
5provide for any other restraint of alienation that are permitted under the laws of this
6state.
SB667,6,8 7(3) Section 701.0503 (2) does not apply to a spendthrift provision in a legacy
8trust.
SB667,6,9 9(4) Section 701.0505 (1) (a) 2. does not apply to a legacy trust.
SB667,6,12 10(5) Nothing in this section may deprive a beneficiary of any exemption right
11that the beneficiary has under any applicable law after the trust property is received
12by the beneficiary.
SB667,6,16 13699.03 Implied power to revoke or to transfer an interest in a legacy
14trust.
None of the following is considered to be, including in combination, a power
15to revoke a legacy trust or to voluntarily or involuntarily transfer an interest in the
16legacy trust:
SB667,6,18 17(1) A transferor's power to veto a distribution of income or principal from the
18legacy trust.
SB667,6,21 19(2) A special power of appointment, as defined in s. 702.02 (7), exercisable by
20a transferor by will or another written document that is effective during the lifetime
21of the transferor or upon the death of the transferor.
SB667,6,23 22(3) The right of a transferor to receive income from the legacy trust in
23accordance with the terms of the legacy trust.
SB667,7,4 24(4) That a transferor is a beneficiary of the legacy trust regardless of whether
25the trust qualifies as a charitable remainder annuity trust under 26 USC 664 (d) (1)

1or as a charitable remainder unitrust under 26 USC 664 (d) (2), even if the transferor
2has the right to release the transferor's retained interest, in whole or in part, in the
3charitable remainder annuity trust or charitable remainder unitrust at any time in
4favor of one or more of the remainder beneficiaries of the legacy trust.
SB667,7,10 5(5) A transferor's annual receipt of a percentage of the value of the legacy trust
6assets, as determined in accordance with the terms of the trust, as long as the amount
7the transferor receives in a year is not more than the amount defined as the income
8of the legacy trust under 26 USC 643 (b) or, for any qualified retirement plan or
9eligible deferred compensation plan that is an asset of the legacy trust, the minimum
10required distribution, as defined in 26 USC 4974 (b).
SB667,7,12 11(6) A transferor's potential or actual receipt or use of principal or income of the
12legacy trust if the potential or actual receipt or use is the result of any of the following:
SB667,7,1613 (a) A qualified trustee's discretion. For purposes of this paragraph, a qualified
14trustee has discretion with respect to the distribution and use of the principal and
15income of a legacy trust unless the terms of the legacy trust expressly provide
16otherwise.
SB667,7,1817 (b) A qualified trustee applying a standard that governs the distribution or use
18of principal or income of the legacy trust.
SB667,7,2319 (c) A qualified trustee acting at the direction of an advisor if the advisor's
20direction is discretionary or pursuant to a standard that governs the distribution or
21use of principal or income under the terms of the legacy trust. For purposes of this
22paragraph, an advisor's direction is discretionary unless the terms of the legacy trust
23expressly provide otherwise.
SB667,7,25 24(7) A transferor's potential or actual right to use real or tangible personal
25property owned by the legacy trust.
SB667,8,3
1(8) A transferor's right to possess and enjoy a qualified interest, as defined in
226 USC 2702 (b), or property held under a qualified personal residence trust, as
3described in 26 USC 2702 (c).
SB667,8,6 4(9) A qualified trustee's mandatory or discretionary power to use the income
5or principal of the legacy trust to pay, in whole or in part, income taxes due on the
6income of the legacy trust.
SB667,8,9 7(10) That a qualified trustee, whether pursuant to the qualified trustee's
8discretion, the terms of the legacy trust, or the direction of an advisor pays any of the
9following:
SB667,8,1010 (a) A transferor's debt that is outstanding at the time of the transferor's death.
SB667,8,1111 (b) The expenses of administering the transferor's estate.
SB667,8,1312 (c) Any estate, gift, generation-skipping transfer, or inheritance tax on behalf
13of the transferor or the transferor's estate.
SB667,8,15 14(11) A provision in the legacy trust that transfers all or part of the trust assets
15to the transferor's estate or revocable trust.
SB667,8,19 16(12) A transferor is a beneficiary of the legacy trust and is authorized to receive
17a payment of income or principal from a qualified annuity interest, as defined in 26
18CFR 25.2702-3 (b)
, or a qualified unitrust interest, as defined in 26 CFR 25.2702-3
19(c)
.
SB667,8,24 20699.04 Transferor's powers. (1) A transferor of a legacy trust has only the
21powers and rights that are granted to the transferor by the trust instrument. An
22agreement or understanding, express or implied, between the transferor and a
23trustee that attempts to grant or permit the retention of greater rights or authority
24than is stated in the trust instrument is void.
SB667,9,3
1(2) Notwithstanding s. 699.03, the terms of a legacy trust may grant a
2transferor, whether or not the transferor is a trustee, the power to do any of the
3following:
SB667,9,44 (a) Remove and replace a trustee.
SB667,9,55 (b) Remove and replace an advisor.
SB667,9,66 (c) Direct trust investments.
SB667,9,77 (d) Execute any other managerial duties.
SB667,9,8 8699.05 Limitations on actions, remedies, and claims. (1) In this section:
SB667,9,99 (a) “Cash" means the coins or currency of the United States or any other nation.
SB667,9,1810 (b) “Cash equivalent" means a monetary instrument or device that is commonly
11or routinely accepted instead of cash, including a certified or uncertified check;
12money order; bank draft; electronic transfer of funds; negotiable instrument or an
13instrument endorsed in blank or in bearer form; securities issued or guaranteed by
14the United States, a state, or a state or federal agency; funds on deposit in a savings
15or checking account or any similar account; funds on deposit in a money market
16account or similar account; or demand deposit account, time deposit account, or
17savings deposit account at any bank, savings and loan association, brokerage house,
18or similar institution.
SB667,9,2019 (c) “Fungible asset" means an asset other than money that is interchangeable
20for commercial purposes and the properties of which are essentially identical.
SB667,9,2121 (d) “Money" means cash or a cash equivalent.
SB667,9,25 22(2) Subject to sub. (3) and s. 699.10 (4), a creditor may not bring an action of
23any kind, including an action to enforce a judgment, an action at law or in equity, or
24an action for an attachment or other final or provisional remedy, against a person
25who made or received a qualified disposition, against a trustee of a legacy trust, or

1against or involving any property that is the subject of a qualified disposition or is
2otherwise held by a legacy trust, except that, subject to s. 699.06, a creditor may bring
3an action against a qualified disposition of an asset if the transferor made the
4qualified disposition with the intent to hinder, delay, or defraud the creditor.
SB667,10,6 5(3) A creditor may bring an action against a qualified disposition under sub.
6(2) only if the creditor satisfies one of the following:
SB667,10,87 (a) The creditor was a creditor of the transferor when the qualified disposition
8was made and the creditor commences the action within the later of the following:
SB667,10,99 1. Eighteen months after the qualified disposition.
SB667,10,1210 2. Six months after the creditor discovers or reasonably should have discovered
11the qualified disposition. For purposes of this subdivision, a creditor is considered
12to have discovered a transfer at the time a public record is made of the transfer.
SB667,10,1513 (b) The creditor becomes a creditor after the qualified disposition is made, and
14the creditor commences the action no later than 18 months after the qualified
15disposition.
SB667,10,22 16(4) In an action against a qualified disposition under sub. (2), each creditor has
17the burden of proving by clear and convincing evidence that the transferor made the
18qualified disposition with the intent to hinder, delay, or defraud the creditor. Proof
19by one creditor that a transferor made a qualified disposition with the intent to
20hinder, delay, or defraud that creditor is not proof that the transferor made a
21qualified disposition with the intent to hinder, delay, or defraud any other creditor
22and does not invalidate any other transfer of property to the legacy trust.
SB667,10,24 23(5) Subject to s. 699.10 (4), with respect to a qualified disposition, a creditor has
24only the rights and remedies that are provided in this section and s. 699.06.
SB667,11,5
1(6) Subject to sub. (8), an advisor may not be found liable for damages a person
2suffers in connection with a legacy trust unless the person demonstrates by clear and
3convincing evidence that the advisor's actions violated the laws of this state, that the
4advisor acted knowingly and in bad faith, and that the advisor's actions directly
5caused the damages suffered by the person.
SB667,11,10 6(7) Subject to sub. (8), a trustee of a legacy trust may not be found liable to a
7person who is not a beneficiary or a transferor of the legacy trust unless the person
8demonstrates by clear and convincing evidence that the trustee's actions violated the
9laws of this state, that the trustee acted knowingly and in bad faith, and that the
10trustee's actions directly caused the damages suffered by the person.
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.
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