January 25, 2020
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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.

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