Senate Bill sb1486c1

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    Florida Senate - 2004                           CS for SB 1486

    By the Committee on Judiciary; and Senators Carlton and Posey





    308-2044-04

  1                      A bill to be entitled

  2         An act relating to assets held in benefit

  3         plans; amending s. 222.22, F.S.; exempting from

  4         legal process in favor of creditors or other

  5         claimants assets held in qualified tuition

  6         programs, in certain medical savings accounts,

  7         or in Coverdell education savings accounts;

  8         amending s. 710.102, F.S.; redefining the term

  9         "benefit plan," and defining the term

10         "qualified minor's trust," as used in the

11         Florida Uniform Transfers to Minors Act;

12         amending s. 710.104, F.S.; including benefit

13         plans in the types of property that a custodian

14         may be named to receive on behalf of a minor;

15         amending s. 710.108, F.S.; allowing a benefit

16         plan to be transferred to a custodian of a

17         minor who does not have a conservator by an

18         obligor of the minor; amending s. 710.116,

19         F.S.; allowing a minor's custodian, without

20         court order, to transfer custodial property to

21         a qualified minor's trust; providing

22         implications of the transfer; amending s.

23         733.808, F.S.; providing for the disposition of

24         benefits under a benefit plan after the death

25         of an owner of or participant in the plan;

26         amending s. 744.301, F.S.; providing for the

27         parents or natural guardians of a minor child

28         to collect, receive, manage, and dispose of and

29         make elections regarding the proceeds of an

30         annuity contract payable to a minor child or of

31         a benefit plan of which the minor is a

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    Florida Senate - 2004                           CS for SB 1486
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 1         beneficiary, participant, or owner, without

 2         appointment, authority, or bond, if the

 3         proceeds equal less than a specified maximum

 4         amount; providing an effective date.

 5  

 6  Be It Enacted by the Legislature of the State of Florida:

 7  

 8         Section 1.  Section 222.22, Florida Statutes, is

 9  amended to read:

10         222.22  Exemption of assets in qualified tuition

11  programs, medical savings accounts, and Coverdell education

12  savings accounts moneys in the Prepaid College Trust Fund or

13  in a Medical Savings Account from legal process.--

14         (1)(a)  Moneys paid into or out of, the assets of, and

15  the income of any validly existing qualified tuition program

16  authorized by s. 529 of the Internal Revenue Code of 1986, as

17  amended, including, but not limited to, the Florida Prepaid

18  College Trust Fund advance payment contracts under s. 1009.98

19  and Florida Prepaid College Trust Fund participation

20  agreements under s. 1009.981 the Florida Prepaid College Trust

21  Fund by or on behalf of a purchaser or qualified beneficiary

22  pursuant to an advance payment contract made under part IV of

23  chapter 1009, which contract has not been terminated, are not

24  liable to attachment, levy, garnishment, or legal process in

25  the state in favor of any creditor of or claimant against any

26  program participant, purchaser, owner or contributor, or

27  program beneficiary the purchaser or beneficiary of such

28  advance payment contract.

29         (2)(b)  Moneys paid into or out of, the assets of, and

30  the income of a medical savings account authorized under s.

31  220 of the Internal Revenue Code of 1986, as amended, are not

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    Florida Senate - 2004                           CS for SB 1486
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 1  liable to attachment, levy, garnishment, or legal process in

 2  this state in favor of any creditor of or claimant against any

 3  account participant, purchaser, owner or contributor, or

 4  account beneficiary.

 5         (3)  Moneys paid into or out of, the assets of, and the

 6  income of any Coverdell education savings account, also known

 7  as an educational IRA, established or existing in accordance

 8  with s. 530 of the Internal Revenue Code of 1986, as amended,

 9  are not liable to attachment, levy, garnishment, or legal

10  process in this state in favor of any creditor of or claimant

11  against any account participant, purchaser, owner or

12  contributor, or account beneficiary. the Prepaid College Trust

13  Fund by or on behalf of a benefactor or designated beneficiary

14  pursuant to a participation agreement made under s. 1009.981,

15  which agreement has not been terminated, are not liable to

16  attachment, garnishment, or legal process in the state in

17  favor of any creditor of the purchaser or beneficiary of such

18  participation agreement.

19         (2)  Moneys paid into or out of a Medical Savings

20  Account by or on behalf of a person depositing money into such

21  account or a qualified beneficiary are not liable to

22  attachment, garnishment, or legal process in the state in

23  favor of any creditor of such person or beneficiary of such

24  Medical Savings Account.

25         Section 2.  Section 710.102, Florida Statutes, is

26  amended to read:

27         710.102  Definitions.--As used in this act, the term:

28         (1)  "Adult" means an individual who has attained the

29  age of 21 years.

30         (2)  "Benefit plan" means a retirement plan and may

31  include, but is not limited to, any pension, profit-sharing,

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    Florida Senate - 2004                           CS for SB 1486
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 1  stock-bonus, or stock-ownership plan or individual retirement

 2  account an employer's plan for the benefit of an employee or

 3  partner.

 4         (3)  "Broker" means a person lawfully engaged in the

 5  business of effecting transactions in securities or

 6  commodities for the person's own account or for the account of

 7  others.

 8         (4)  "Conservator" means a person appointed or

 9  qualified by a court to act as general, limited, or temporary

10  guardian of a minor's property or a person legally authorized

11  to perform substantially the same functions.

12         (5)  "Court" means the circuit court.

13         (6)  "Custodial property" means any interest in

14  property transferred to a custodian under this act and the

15  income from and proceeds of that interest in property.

16         (7)  "Custodian" means a person so designated under s.

17  710.111 or a successor or substitute custodian designated

18  under s. 710.121.

19         (8)  "Financial institution" means a bank, trust

20  company, savings institution, or credit union, chartered and

21  supervised under state or federal law.

22         (9)  "Legal representative" means an individual's

23  personal representative or conservator.

24         (10)  "Member of the minor's family" means the minor's

25  parent, stepparent, spouse, grandparent, brother, sister,

26  uncle, or aunt, whether of the whole or half blood or by

27  adoption.

28         (11)  "Minor" means an individual who has not attained

29  the age of 21 years.

30         (12)  "Person" means an individual, corporation,

31  organization, or other legal entity.

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    Florida Senate - 2004                           CS for SB 1486
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 1         (13)  "Personal representative" means an executor,

 2  administrator, successor personal representative, or special

 3  administrator of a decedent's estate or a person legally

 4  authorized to perform substantially the same functions.

 5         (14)  "Qualified minor's trust" means a trust that

 6  meets the requirements of s. 2503(c) of the Internal Revenue

 7  Code of 1986, as amended.

 8         (15)(14)  "State" includes any state of the United

 9  States, the District of Columbia, the Commonwealth of Puerto

10  Rico, and any territory or possession subject to the

11  legislative authority of the United States.

12         (16)(15)  "Transfer" means a transaction that creates

13  custodial property under s. 710.111.

14         (17)(16)  "Transferor" means a person who makes a

15  transfer under this act.

16         (18)(17)  "Trust company" means a financial

17  institution, corporation, or other legal entity, authorized to

18  exercise general trust powers.

19         Section 3.  Subsection (1) of section 710.104, Florida

20  Statutes, is amended to read:

21         710.104  Nomination of custodian.--

22         (1)  A person having the right to designate the

23  recipient of property transferable upon the occurrence of a

24  future event may revocably nominate a custodian to receive the

25  property for a minor beneficiary upon the occurrence of the

26  event by naming the custodian followed in substance by the

27  words:  "as custodian for (name of minor) under the Florida

28  Uniform Transfers to Minors Act."  The nomination may name one

29  or more persons as substitute custodians to whom the property

30  must be transferred, in the order named, if the first

31  nominated custodian dies before the transfer or is unable,

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    Florida Senate - 2004                           CS for SB 1486
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 1  declines, or is ineligible to serve.  The nomination may be

 2  made in a will, a trust, a deed, an instrument exercising a

 3  power of appointment, or in a writing designating a

 4  beneficiary of contractual rights, including, but not limited

 5  to, the right to a benefit plan, which is registered with or

 6  delivered to the payor, issuer, or other obligor of the

 7  contractual rights.

 8         Section 4.  Section 710.108, Florida Statutes, is

 9  amended to read:

10         710.108  Transfer by obligor.--

11         (1)  Subject to subsections (2) and (3), a person not

12  subject to s. 710.106 or s. 710.107 who holds property,

13  including, but not limited to, a benefit plan, of a minor not

14  having a conservator, or who owes a liquidated debt to, a

15  minor not having a conservator, may make an irrevocable

16  transfer to a custodian for the benefit of the minor pursuant

17  to s. 710.111.

18         (2)  If a person having the right to do so under s.

19  710.104 has nominated a custodian under that section to

20  receive the custodial property, the transfer must be made to

21  that person.

22         (3)  If no custodian has been nominated under s.

23  710.104, or all persons so nominated as custodian die before

24  the transfer or are unable, decline, or are ineligible to

25  serve, a transfer under this section may be made to an adult

26  member of the minor's family or to a trust company unless the

27  property exceeds $15,000 $10,000 in value.

28         Section 5.  Section 710.116, Florida Statutes, is

29  amended to read:

30         710.116  Use of custodial property.--

31  

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    Florida Senate - 2004                           CS for SB 1486
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 1         (1)  A custodian may deliver or pay to the minor or

 2  expend for the minor's benefit so much of the custodial

 3  property as the custodian considers advisable for the use and

 4  benefit of the minor, without court order and without regard

 5  to the duty or ability of the custodian personally or of any

 6  other person to support the minor, or to any other income or

 7  property of the minor which may be applicable or available for

 8  that purpose.

 9         (2)  A custodian may, without court order, transfer all

10  or part of the custodial property to a qualified minor's

11  trust. A transfer of property pursuant to this subsection

12  terminates the custodianship to the extent of the property

13  transferred.

14         (3)(2)  On petition of an interested person or the

15  minor if the minor has attained the age of 14 years, the court

16  may order the custodian to deliver or pay to the minor or

17  expend for the minor's benefit so much of the custodial

18  property as the court considers advisable for the use and

19  benefit of the minor.

20         (4)(3)  A delivery, payment, or expenditure under this

21  section is in addition to, not in substitution for, and does

22  not affect any obligation of a person to support the minor.

23         Section 6.  Section 733.808, Florida Statutes, is

24  amended to read:

25         733.808  Death benefits; disposition of proceeds.--

26         (1)  Death benefits of any kind, including, but not

27  limited to, proceeds of:

28         (a)  An individual life insurance policy;

29         (b)  A group life insurance policy;

30         (c)  A benefit plan as defined by s. 710.102 An

31  employees' trust or under a contract purchased by an

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    Florida Senate - 2004                           CS for SB 1486
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 1  employees' trust forming part of a pension, stock bonus, or

 2  profit-sharing plan;

 3         (d)  An annuity or endowment contract; and

 4         (e)  A health or and accident policy,

 5  

 6  may be made payable to the trustee under a trust agreement or

 7  declaration of trust in existence at the time of the death of

 8  the insured, employee, or annuitant or the owner of or

 9  participant in the benefit plan. The death benefits shall be

10  held and disposed of by the trustee in accordance with the

11  terms of the trust as they appear in writing on the date of

12  the death of the insured, employee, or annuitant, owner, or

13  participant. It shall not be necessary to the validity of the

14  trust agreement or declaration of trust, whether revocable or

15  irrevocable, that it have a trust corpus other than the right

16  of the trustee to receive death benefits.

17         (2)  Death benefits of any kind, including, but not

18  limited to, proceeds of:

19         (a)  An individual life insurance policy;

20         (b)  A group life insurance policy;

21         (c)  A benefit plan as defined by s. 710.102 An

22  employees' trust, or under a contract purchased by an

23  employees' trust, forming part of a pension, stock bonus, or

24  profit-sharing plan;

25         (d)  An annuity or endowment contract; and

26         (e)  A health or and accident policy,

27  

28  may be made payable to the trustee named, or to be named, in a

29  written instrument that is admitted to probate as the last

30  will of the insured, the owner of the policy, the employee,

31  owner, or participant covered by the plan or contract, or any

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    Florida Senate - 2004                           CS for SB 1486
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 1  other person, whether or not the will is in existence at the

 2  time of designation.  Upon the admission of the will to

 3  probate, the death benefits shall be paid to the trustee, to

 4  be held, administered, and disposed of in accordance with the

 5  terms of the trust or trusts created by the will.

 6         (3)  In the event no trustee makes proper claim to the

 7  proceeds from the insurance company or other obligor within a

 8  period of 6 months after the date of the death of the insured,

 9  employee, or annuitant, owner, or participant, or if

10  satisfactory evidence is furnished to the insurance company or

11  obligor within that period that there is, or will be, no

12  trustee to receive the proceeds, payment shall be made by the

13  insurance company or obligor to the personal representative of

14  the person making the designation, unless otherwise provided

15  by agreement with the insurer or obligor during the lifetime

16  of the insured, employee, or annuitant, owner, or participant.

17         (4)  Death benefits payable as provided in subsection

18  (1), subsection (2), or subsection (3), unless paid to a

19  personal representative under the provisions of subsection

20  (3), shall not be deemed to be part of the decedent's estate,

21  and shall not be subject to any obligation to pay the expenses

22  of the administration and obligations of the decedent's estate

23  or for contribution required from a trust under s. 733.607(2)

24  to any greater extent than if the proceeds were payable

25  directly to the beneficiaries named in the trust.

26         (5)  The death benefits held in trust may be commingled

27  with any other assets that may properly come into the trust.

28         (6)  Nothing in This section does not shall affect the

29  validity of any designation of a beneficiary of proceeds

30  previously made that designates as beneficiary the trustee of

31  

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    Florida Senate - 2004                           CS for SB 1486
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 1  any trust established under a trust agreement or declaration

 2  of trust or by will.

 3         Section 7.  Subsection (2) of section 744.301, Florida

 4  Statutes, is amended to read:

 5         744.301  Natural guardians.--

 6         (2)  The natural guardian or guardians are authorized,

 7  on behalf of any of their minor children, to:

 8         (a)  Settle and consummate a settlement of any claim or

 9  cause of action accruing to any of their minor children for

10  damages to the person or property of any of said minor

11  children; and to

12         (b)  Collect, receive, manage, and dispose of the

13  proceeds of any such settlement; and

14         (c)  Collect, receive, manage, and dispose of any other

15  real or personal property distributed from an estate or trust;

16  or

17         (d)  Collect, receive, manage, and dispose of and make

18  elections regarding the proceeds from a life insurance policy

19  or annuity contract payable to, or otherwise accruing to the

20  benefit of, the child; and

21         (e)  Collect, receive, manage, dispose of, and make

22  elections regarding the proceeds of any benefit plan as

23  defined by s. 710.102, of which the minor is a beneficiary,

24  participant, or owner,

25  

26  without appointment, authority, or bond during minority, when

27  the amount involved in any instance does not exceed $15,000,

28  without appointment, authority, or bond.

29         Section 8.  This act shall take effect upon becoming a

30  law.

31  

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    Florida Senate - 2004                           CS for SB 1486
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 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1486

 3                                 

 4  -    Amends the Florida Uniform Minors Act to expand the scope
         of authority to manage or transfer monies for or on
 5       behalf of a minor by expanding the category of plan
         proceeds that may be made payable to a trust to include
 6       stock ownership plans, individual retirement accounts and
         other options, to expand the authority of a custodian to
 7       transfer part or all of custodial account funds into a s.
         2503(c) Qualified Minor's Trust, to allow for the
 8       nomination of a custodian in any benefit plan as
         redefined in the Act, and to increase from $10,000 to
 9       $15,000 which may be transferred under specified
         circumstances,directly to a family member or trust
10       company.

11  -    Amends the Probate Code to add to the categories of plans
         or policies from which death benefit proceeds may be
12       payable to a trust to recognize that these type of
         proceeds may be payable from any type of benefit plan as
13       is newly redefined in the Florida Uniform Transfer to
         Minor's Act.
14  
    -    Amends the Florida Guardianship Law to expand a natural
15       guardian's authority to act without a court order on
         legal monetary matters relating to a minor consistent
16       with the changes made to the Florida Uniform Transfers to
         Minors Act, but without exceeding the statutory threshold
17       of $15,000.

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