Wisconsin Statutes 702.502 – Creditor claim: general power not created by powerholder
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Terms Used In Wisconsin Statutes 702.502
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Decedent: A deceased person.
- Following: when used by way of reference to any statute section, means the section next following that in which the reference is made. See Wisconsin Statutes 990.01
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Person: includes all partnerships, associations and bodies politic or corporate. See Wisconsin Statutes 990.01
- Property: includes real and personal property. See Wisconsin Statutes 990.01
- Revocable trust: A trust agreement that can be canceled, rescinded, revoked, or repealed by the grantor (person who establishes the trust).
- Trustee: A person or institution holding and administering property in trust.
(1) Except as otherwise provided in sub. (2), appointive property subject to a general power of appointment created by a person other than the powerholder is subject to a claim of a creditor of any of the following:
(a) If the power of appointment is a presently exercisable power of appointment, the powerholder to the extent the powerholder’s property is insufficient.
(b) If the power of appointment is exercisable at the powerholder’s death, the powerholder’s estate or revocable trust, subject to the right of a decedent to direct the source from which liabilities are paid, but only to the extent of the powerholder’s exercise of that general power of appointment and only to the extent that the claim of the creditor has been filed and allowed in the powerholder’s estate or filed with and approved by the trustee of a revocable trust but not paid because the assets of the estate or revocable trust are insufficient. For purposes of this paragraph, a revocable trust is a trust that is revocable, as defined in s. 701.0103 (22), by the powerholder or jointly by the powerholder and the powerholder’s spouse.
(2) Subject to s. 702.504 (3), a power of appointment created by a person other than the powerholder that is subject to an ascertainable standard relating to an individual’s health, education, support, or maintenance within the meaning of 26 U.S. Code § 2041 (b) (1) (A) or 2514 (c) (1), is considered for purposes of this subchapter as a nongeneral power of appointment.
(3) If during the powerholder’s lifetime, the powerholder exercises a general power of appointment created by a person other than the powerholder, a creditor of the powerholder can reach the appointed interests to the same extent that under the law relating to fraudulent conveyances the creditor could reach property that the powerholder has owned and transferred during the powerholder’s lifetime.