Bill Text: FL S0998 | 2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Trust Administration [SPSC]

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2010-05-27 - Approved by Governor; Chapter No. 2010-122; companion bill(s) passed, see CS/CS/HB 1237 (Ch. 2010-132) [S0998 Detail]

Download: Florida-2010-S0998-Introduced.html

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Florida Senate - 2010                                     SB 998 
 
By Senator Thrasher 
8-00958-10                                             2010998__ 
1                        A bill to be entitled 
2         An act relating to trust administration; amending s. 
3         733.607, F.S.; limiting a personal representative’s 
4         entitlement to payment from a trust of certain estate 
5         expenses and obligations; specifying application of 
6         certain criteria in making certain payments from a 
7         trust; amending s. 733.707, F.S.; specifying 
8         application of additional provisions to liability for 
9         certain estate expense and obligation payments from a 
10         trust; amending s. 736.0206, F.S.; deleting certain 
11         notice requirements relating to court review of a 
12         trustee’s employment of certain persons; authorizing 
13         the award of expert witness fees from trust assets 
14         rather than requiring the award of such fees; 
15         providing a limitation; amending s. 736.0505, F.S.; 
16         revising a value criterion for determining the extent 
17         of treating the holder of a power of withdrawal as the 
18         settlor of a trust; providing criteria for determining 
19         who contributed certain trust assets under certain 
20         circumstances; amending s. 736.05053, F.S.; requiring 
21         application of priorities for pro rata abatement of 
22         nonresiduary trust dispositions together with 
23         nonresiduary devises; amending s. 736.1007, F.S.; 
24         deleting authority for a court to determine an 
25         attorney’s compensation; deleting certain expert 
26         testimony and fee payment provisions; deleting 
27         requirements for certain court compensation 
28         determination proceedings to be part of a trust 
29         administration process and for court determination and 
30         payment of certain estate costs and fees from trust 
31         assets; providing an effective date. 
32 
33  Be It Enacted by the Legislature of the State of Florida: 
34 
35         Section 1. Subsection (2) of section 733.607, Florida 
36  Statutes, is amended to read: 
37         733.607 Possession of estate.— 
38         (2) If, after providing for statutory entitlements and all 
39  devises other than residuary devises, the assets of the 
40  decedent’s estate are insufficient to pay the expenses of the 
41  administration and obligations of the decedent’s estate, the 
42  personal representative is entitled to payment from the trustee 
43  of a trust described in s. 733.707(3), in the amount the 
44  personal representative certifies in writing to be required to 
45  satisfy the insufficiency, subject to the exclusions and 
46  preferences under s. 736.05053. The provisions of s. 733.805 
47  shall apply in determining the amount of any payment required by 
48  this section. 
49         Section 2. Subsection (3) of section 733.707, Florida 
50  Statutes, is amended to read: 
51         733.707 Order of payment of expenses and obligations.— 
52         (3) Any portion of a trust with respect to which a decedent 
53  who is the grantor has at the decedent’s death a right of 
54  revocation, as defined in paragraph (e), either alone or in 
55  conjunction with any other person, is liable for the expenses of 
56  the administration and obligations of the decedent’s estate to 
57  the extent the decedent’s estate is insufficient to pay them as 
58  provided in ss. s. 733.607(2) and 736.05053. 
59         (a) For purposes of this subsection, any trusts established 
60  as part of, and all payments from, either an employee annuity 
61  described in s. 403 of the Internal Revenue Code of 1986, as 
62  amended, an Individual Retirement Account, as described in s. 
63  408 of the Internal Revenue Code of 1986, as amended, a Keogh 
64  (HR-10) Plan, or a retirement or other plan established by a 
65  corporation which is qualified under s. 401 of the Internal 
66  Revenue Code of 1986, as amended, shall not be considered a 
67  trust over which the decedent has a right of revocation. 
68         (b) For purposes of this subsection, any trust described in 
69  s. 664 of the Internal Revenue Code of 1986, as amended, shall 
70  not be considered a trust over which the decedent has a right of 
71  revocation. 
72         (c) This subsection shall not impair any rights an 
73  individual has under a qualified domestic relations order as 
74  that term is defined in s. 414(p) of the Internal Revenue Code 
75  of 1986, as amended. 
76         (d) For purposes of this subsection, property held or 
77  received by a trust to the extent that the property would not 
78  have been subject to claims against the decedent’s estate if it 
79  had been paid directly to a trust created under the decedent’s 
80  will or other than to the decedent’s estate, or assets received 
81  from any trust other than a trust described in this subsection, 
82  shall not be deemed assets of the trust available to the 
83  decedent’s estate. 
84         (e) For purposes of this subsection, a “right of 
85  revocation” is a power retained by the decedent, held in any 
86  capacity, to: 
87         1. Amend or revoke the trust and revest the principal of 
88  the trust in the decedent; or 
89         2. Withdraw or appoint the principal of the trust to or for 
90  the decedent’s benefit. 
91         Section 3. Subsections (1), (5), (6), and (7) of section 
92  736.0206, Florida Statutes, are amended to read: 
93         736.0206 Proceedings for review of employment of agents and 
94  review of compensation of trustee and employees of trust.— 
95         (1) After notice to all interested persons, The court may 
96  review the propriety of the employment by a trustee of any 
97  person, including any attorney, auditor, investment adviser, or 
98  other specialized agent or assistant, and the reasonableness of 
99  any compensation paid to that person or to the trustee. 
100         (5) The court may determine reasonable compensation for a 
101  trustee or any person employed by a trustee without receiving 
102  expert testimony. Any party may offer expert testimony after 
103  notice to interested persons. If expert testimony is offered, a 
104  reasonable expert witness fee may shall be awarded by the court 
105  and paid from the assets of the trust unless the court finds 
106  that the expert testimony did not assist the court. The court 
107  shall direct from which part of the trust assets the fee shall 
108  be paid. 
109         (6) Persons given notice as provided in this section shall 
110  be bound by all orders entered on the complaint. 
111         (6)(7) In a proceeding pursuant to subsection (2), the 
112  petitioner may serve formal notice as provided in the Florida 
113  Probate Rules, and such notice shall be sufficient for the court 
114  to acquire jurisdiction over the person receiving the notice to 
115  the extent of the person’s interest in the trust. 
116         Section 4. Paragraph (b) of subsection (2) of section 
117  736.0505, Florida Statutes, is amended, and subsection (3) is 
118  added to that section, to read: 
119         736.0505 Creditors’ claims against settlor.— 
120         (2) For purposes of this section: 
121         (b) Upon the lapse, release, or waiver of the power, the 
122  holder is treated as the settlor of the trust only to the extent 
123  the value of the property affected by the lapse, release, or 
124  waiver exceeds the greater of the amount specified in: 
125         1. Section 2041(b)(2) or s. 2514(e); or 
126         2. Section 2503(b) and, if the donor was married at the 
127  time of the transfer to which the power of withdrawal applies, 
128  twice the amount specified in s. 2503(b), 
129 
130  of the Internal Revenue Code of 1986, as amended. 
131         (3) Subject to the provisions of s. 726.105, for purposes 
132  of this section, the assets in: 
133         (a) A trust described in s. 2523(e) of the Internal Revenue 
134  Code of 1986, as amended, or a trust for which the election 
135  described in s. 2523(f) of the Internal Revenue Code of 1986, as 
136  amended, has been made; and 
137         (b) Another trust, to the extent that the assets in the 
138  other trust are attributable to a trust described in paragraph 
139  (a), 
140 
141  shall, after the death of the settlor’s spouse, be deemed to 
142  have been contributed by the settlor’s spouse and not by the 
143  settlor. 
144         Section 5. Subsection (5) is added to section 736.05053, 
145  Florida Statutes, to read: 
146         736.05053 Trustee’s duty to pay expenses and obligations of 
147  settlor’s estate.— 
148         (5) Nonresiduary trust dispositions shall abate pro rata 
149  with nonresiduary devises pursuant to the priorities specified 
150  in this section and s. 733.805, determined as if the 
151  beneficiaries of the will and trust, other than the estate or 
152  trust itself, were taking under a common instrument. 
153         Section 6. Subsections (7) through (10) of section 
154  736.1007, Florida Statutes, are amended to read: 
155         736.1007 Trustee’s attorney’s fees.— 
156         (7) The court may determine reasonable attorney’s 
157  compensation without receiving expert testimony. Any party may 
158  offer expert testimony after notice to interested persons. If 
159  expert testimony is offered, an expert witness fee may be 
160  awarded by the court and paid from the assets of the trust. The 
161  court shall direct from what part of the trust the fee is to be 
162  paid. 
163         (7)(8) If a separate written agreement regarding 
164  compensation exists between the attorney and the settlor, the 
165  attorney shall furnish a copy to the trustee prior to 
166  commencement of employment and, if employed, shall promptly file 
167  and serve a copy on all interested persons. A separate agreement 
168  or a provision in the trust suggesting or directing the trustee 
169  to retain a specific attorney does not obligate the trustee to 
170  employ the attorney or obligate the attorney to accept the 
171  representation but, if the attorney who is a party to the 
172  agreement or who drafted the trust is employed, the compensation 
173  paid shall not exceed the compensation provided in the 
174  agreement. 
175         (9) Court proceedings to determine compensation, if 
176  required, are a part of the trust administration process, and 
177  the costs, including fees for the trustee’s attorney, shall be 
178  determined by the court and paid from the assets of the trust 
179  unless the court finds the attorney’s fees request to be 
180  substantially unreasonable. The court shall direct from what 
181  part of the trust the fees are to be paid. 
182         (8)(10) As used in this section, the term “initial trust 
183  administration” means administration of a revocable trust during 
184  the period that begins with the death of the settlor and ends on 
185  the final distribution of trust assets outright or to continuing 
186  trusts created under the trust agreement but, if an estate tax 
187  return is required, not until after issuance of an estate tax 
188  closing letter or other evidence of termination of the estate 
189  tax proceeding. This initial period is not intended to include 
190  continued regular administration of the trust. 
191         Section 7. This act shall take effect July 1, 2010.