Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB667

Introduced
11/9/23  
Refer
11/9/23  
Report Pass
2/9/24  
Engrossed
2/20/24  
Refer
2/20/24  
Enrolled
3/21/24  
Vetoed
3/29/24  

Caption

Domestic asset protection trusts.

Impact

The implications of SB667 on state laws are significant. By allowing the creation of these safety net trusts, the bill provides individuals and families with a means to structure their estates in a way that limits creditor access to trust assets. It alters existing legal frameworks around asset protection, making it more favorable for individuals to protect their wealth from potential legal or financial liabilities. The new rules would facilitate estate planning strategies, particularly for individuals with considerable assets or those in professions with higher risks of lawsuits.

Summary

Senate Bill 667 introduces the concept of a legacy trust, an irrevocable trust that is designed to offer protection against creditor claims. This new type of trust mandates that it must contain a spendthrift provision, which inhibits beneficiaries from selling or pledging their interests in the trust. The bill specifies that assets within a legacy trust are generally not subject to claims for public support and only remain open to child support claims. This change aims to provide more robust safeguarding of assets for the beneficiaries, particularly in the context of financial difficulties or potential litigation.

Contention

Debate surrounding SB667 may arise primarily around concerns regarding the potential for misuse of these trusts. Critics might argue that the provisions can enable individuals to shield assets from creditors inappropriately, undermining the ability of creditors to recover debts. This concern hinges on the bill’s stipulation that a creditor may not initiate an action if the assets transferred to the legacy trust were not intended to defraud or hinder creditors, raising questions about the implications of intent and the risk of fraudulent transfers. Therefore, while advocates argue that SB667 enhances financial security, detractors may emphasize the need for checks to prevent abuse.

Companion Bills

No companion bills found.

Previously Filed As

WI AB648

Domestic asset protection trusts.

WI HB1394

To Update The Law On Spendthrift Trusts; And To Allow For The Creation Of A Domestic Asset Protection Trust.

WI HB4058

Relating to self-settled asset protection trusts.

WI HB4376

Relating to self-settled asset protection trusts.

WI SB2317

Relating to self-settled asset protection trusts.

WI SB387

Relating to trusts and certain other forms of asset protection.

WI SB500

Relating to self-settled asset protection trusts.

WI SB759

Trust administration, the Uniform Powers of Appointment Act, the Uniform Trust Decanting Act, disclosure of certain digital property, and the classification of certain digital property as individual property for purposes of determining marital property. (FE)

WI HB1850

Trust; creating the Uniform Trust Code; definitions; creditor claims; revocable trusts; trustees; duties and powers of trustee; trustee liability; severability; effective date.

WI SB1231

In trusts, further providing for definitions - UTC 103, for trust instrument controls and mandatory rules - UTC 105, for governing law - UTC 107, for situs of trust, for nonjudicial settlement agreements - UTC 111, for charitable purposes; enforcement - UTC 405, for trust for care of animal - UTC 408, for noncharitable trust without ascertainable beneficiary - UTC 409, for reformation to correct mistakes - UTC 415, for modification to achieve settlor's tax objectives - UTC 416, for spendthrift provision - UTC 502, for creditor's claim against settlor - UTC 505(a), for overdue distribution - UTC 506, for revocation or amendment of revocable trust - UTC 602, for trustee's duties and powers of withdrawal - UTC 603, for accepting or declining trusteeship - UTC 701, for trustee's bond - UTC 702, for cotrustees - UTC 703, for vacancy in trusteeship and appointment of successor - UTC 704, for resignation of trustee and filing resignation, for compensation of trustee - UTC 708, for duty to administer trust - UTC 801, for duty of loyalty - UTC 802, for powers to direct - UTC 808, for duty to inform and report, for discretionary powers and for powers of trustees - UTC 815, providing for directed trusts, further providing for remedies for breach of trust--UTC 1001, providing for nonjudicial account settlement and further providing for reliance on trust instrument - UTC 1006, for exculpation of trustee - UTC 1008, for certification of trust - UTC 1013 and for title of purchaser.

Similar Bills

WI AB648

Domestic asset protection trusts.

CT SB00397

An Act Concerning Adoption Of The Uniform Trust Code, The Connecticut Uniform Directed Trust Act And The Connecticut Qualified Dispositions In Trust Act.

OK HB3962

Trust; Oklahoma Trust Reform Act of 2024; directed trust; qualified dispositions; duration of trust; effective date.

KY HB720

AN ACT relating to disposition of property.

TX HB2428

Relating to the adoption of the Texas Uniform Disclaimer of Property Interests Act.

CT HB07104

An Act Concerning Adoption Of The Connecticut Uniform Trust Code.

NC S160

Transfer on Death Deeds

HI HB186

Relating To The Uniform Trust Code.