HB 0667

CS

CHAMBER ACTION

1	The Justice Council recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to assets held in benefit plans; amending
7	s. 222.21, F.S.; exempting certain tax-exempt funds or
8	accounts from legal process in favor of creditors under
9	certain circumstances; providing requirements, criteria,
10	and limitations; providing application; amending s.
11	222.22, F.S.; exempting from legal process in favor of
12	creditors or other claimants assets held in qualified
13	tuition programs, in certain health savings accounts and
14	medical savings accounts, in Coverdell education savings
15	accounts, or in hurricane savings accounts; providing a
16	definition; providing for contingent effect; amending s.
17	710.102, F.S.; redefining the term "benefit plan" and
18	defining the term "qualified minor's trust" as used in the
19	Florida Uniform Transfers to Minors Act; amending s.
20	710.104, F.S.; including benefit plans in the types of
21	property that a custodian may be named to receive on
22	behalf of a minor; amending s. 710.108, F.S.; allowing a
23	benefit plan to be transferred to a custodian of a minor
24	who does not have a conservator by an obligor of the
25	minor; raising a threshold above which certain obligor
26	transfers are prohibited; amending s. 710.116, F.S.;
27	allowing a minor's custodian, without court order, to
28	transfer custodial property to a qualified minor's trust;
29	providing implications of the transfer; amending s.
30	733.808, F.S.; providing for the disposition of benefits
31	under a benefit plan after the death of an owner of or
32	participant in the plan; amending s. 744.301, F.S.;
33	providing for the parents or natural guardians of a minor
34	child to collect, receive, manage, and dispose of and make
35	elections regarding the proceeds of an annuity contract
36	payable to a minor child or of a benefit plan of which the
37	minor is a beneficiary, participant, or owner, without
38	appointment, authority, or bond, if the proceeds equal
39	less than a specified maximum amount; providing an
40	effective date.
41
42	Be It Enacted by the Legislature of the State of Florida:
43
44	Section 1.  Section 222.21, Florida Statutes, is amended to
45	read:
46	222.21  Exemption of pension money and certain tax-exempt
47	funds or accounts retirement or profit-sharing benefits from
48	legal processes.--
49	(1)  Money received by any debtor as pensioner of the
50	United States within 3 months next preceding the issuing of an
51	execution, attachment, or garnishment process may not be applied
52	to the payment of the debts of the pensioner when it is made to
53	appear by the affidavit of the debtor or otherwise that the
54	pension money is necessary for the maintenance of the debtor's
55	support or a family supported wholly or in part by the pension
56	money. The filing of the affidavit by the debtor, or the making
57	of such proof by the debtor, is prima facie evidence; and it is
58	the duty of the court in which the proceeding is pending to
59	release all pension moneys held by such attachment or
60	garnishment process, immediately, upon the filing of such
61	affidavit or the making of such proof.
62	(2)(a)  Except as provided in paragraph (d)(b), any money
63	or other assets payable to an owner, a participant, or a
64	beneficiary from, or any interest of any owner, participant, or
65	beneficiary in, a fund or account retirement or profit-sharing
66	plan that is qualified under s. 401(a), s. 403(a), s. 403(b), s.
67	408, s. 408A, or s. 409 of the Internal Revenue Code of 1986, as
68	amended, is exempt from all claims of creditors of the owner,
69	beneficiary, or participant if the fund or account is:
70	1.  Maintained in accordance with a master plan, volume
71	submitter plan, prototype plan, or any other plan or governing
72	instrument that has been preapproved by the Internal Revenue
73	Service as exempt from taxation under s. 401(a), s. 403(a), s.
74	403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b), or s. 501(a)
75	of the Internal Revenue Code of 1986, as amended, unless it has
76	been subsequently determined that the plan or governing
77	instrument is not exempt from taxation in a proceeding that has
78	become final and not subject to appeal;
79	2.  Maintained in accordance with a plan or governing
80	instrument that has been determined by the Internal Revenue
81	Service to be exempt from taxation under s. 401(a), s. 403(a),
82	s. 403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b), or s.
83	501(a) of the Internal Revenue Code of 1986, as amended, unless
84	it has been subsequently determined that the plan or governing
85	instrument is not exempt from taxation in a proceeding that has
86	become final and not subject to appeal; or
87	3.  Not maintained in accordance with a plan or governing
88	instrument described in subparagraph 1. or 2. if the person
89	claiming exemption under this paragraph proves by a
90	preponderance of the evidence that the fund or account is
91	maintained in accordance with a plan or governing instrument
92	that:
93	a.  Is in substantial compliance with the applicable
94	requirements for tax exemption under s. 401(a), s. 403(a), s.
95	403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b), or s. 501(a)
96	of the Internal Revenue Code of 1986, as amended; or
97	b.  Would have been in substantial compliance with the
98	applicable requirements for tax exemption under s. 401(a), s.
99	403(a), s. 403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b),
100	or s. 501(a) of the Internal Revenue Code of 1986, as amended,
101	but for the negligent or wrongful conduct of a person or persons
102	other than the person who is claiming the exemption under this
103	section.
104	(b)  It is not necessary that a fund or account described
105	in paragraph (a) be maintained in accordance with a plan or
106	governing instrument that is covered by any part of the Employee
107	Retirement Income Security Act of 1974 for money or assets
108	payable from or any interest in that fund or account to be
109	exempt from claims of creditors under that paragraph.
110	(c)  Any money or other assets that are exempt from claims
111	of creditors under paragraph (a) do not cease to qualify for
112	exemption by reason of a direct transfer or eligible rollover
113	that is excluded from gross income under s. 402(c) of the
114	Internal Revenue Code of 1986.
115	(d)(b)  Any fund or account plan or arrangement described
116	in paragraph (a) is not exempt from the claims of an alternate
117	payee under a qualified domestic relations order. However, the
118	interest of any alternate payee under a qualified domestic
119	relations order is exempt from all claims of any creditor, other
120	than the Department of Children and Family Services, of the
121	alternate payee. As used in this paragraph, the terms "alternate
122	payee" and "qualified domestic relations order" have the
123	meanings ascribed to them in s. 414(p) of the Internal Revenue
124	Code of 1986.
125	(e)(c)  This subsection applies The provisions of
126	paragraphs (a) and (b) apply to any proceeding that is filed on
127	or after July October 1, 2005 1987.
128	Section 2.  Section 222.22, Florida Statutes, is amended to
129	read:
130	222.22  Exemption of assets in qualified tuition programs,
131	medical savings accounts, Coverdell education savings accounts,
132	and hurricane savings accounts moneys in the Prepaid College
133	Trust Fund or in a Medical Savings Account from legal process.--
134	(1)(a)  Moneys paid into or out of, the assets of, and the
135	income of any validly existing qualified tuition program
136	authorized by s. 529 of the Internal Revenue Code of 1986, as
137	amended, including, but not limited to, the Florida Prepaid
138	College Trust Fund advance payment contracts under s. 1009.98
139	and Florida Prepaid College Trust Fund participation agreements
140	under s. 1009.981 the Florida Prepaid College Trust Fund by or
141	on behalf of a purchaser or qualified beneficiary pursuant to an
142	advance payment contract made under part IV of chapter 1009,
143	which contract has not been terminated, are not liable to
144	attachment, levy, garnishment, or legal process in the state in
145	favor of any creditor of or claimant against any program
146	participant, purchaser, owner or contributor, or program
147	beneficiary the purchaser or beneficiary of such advance payment
148	contract.
149	(2)(b)  Moneys paid into or out of, the assets of, and the
150	income of a health savings account or medical savings account
151	authorized under ss. 220 and 223 of the Internal Revenue Code of
152	1986, as amended, are not liable to attachment, levy,
153	garnishment, or legal process in this state in favor of any
154	creditor of or claimant against any account participant,
155	purchaser, owner or contributor, or account beneficiary.
156	(3)  Moneys paid into or out of, the assets of, and the
157	income of any Coverdell education savings account, also known as
158	an educational IRA, established or existing in accordance with
159	s. 530 of the Internal Revenue Code of 1986, as amended, are not
160	liable to attachment, levy, garnishment, or legal process in
161	this state in favor of any creditor of or claimant against any
162	account participant, purchaser, owner or contributor, or account
163	beneficiary.
164	(4)(a)  Moneys paid into or out of, the assets of, and the
165	income of any hurricane savings account established by an
166	insurance policyholder for residential property in this state
167	equal to twice the deductible sum of such insurance to cover an
168	insurance deductible or other uninsured portion of the risks of
169	loss from a hurricane, rising flood waters, or other
170	catastrophic windstorm event are not liable to attachment, levy,
171	garnishment, or legal process in this state in favor of any
172	creditor of or claimant against any account participant,
173	purchaser, owner or contributor, or account beneficiary.
174	(b)  As used in this subsection, the term "hurricane
175	savings account" means an account established by the owner of
176	residential real property in this state, which meets the
177	requirements of homestead exemption under s. 4, Art. X of the
178	State Constitution, who specifies that the purpose of the
179	account is to cover the amount of insurance deductibles and
180	other uninsured portions of the risks of loss from hurricanes,
181	rising flood waters, or other catastrophic windstorm events.
182	(c)  This subsection shall take effect only when the
183	Federal Government provides tax-exempt or tax-deferred status to
184	a hurricane savings account, disaster savings account, or other
185	similar account created to cover an insurance deductible or
186	other uninsured portion of the risks of loss from a hurricane,
187	rising flood waters, or other catastrophic windstorm event the
188	Prepaid College Trust Fund by or on behalf of a benefactor or
189	designated beneficiary pursuant to a participation agreement
190	made under s. 1009.981, which agreement has not been terminated,
191	are not liable to attachment, garnishment, or legal process in
192	the state in favor of any creditor of the purchaser or
193	beneficiary of such participation agreement.
194	(2)  Moneys paid into or out of a Medical Savings Account
195	by or on behalf of a person depositing money into such account
196	or a qualified beneficiary are not liable to attachment,
197	garnishment, or legal process in the state in favor of any
198	creditor of such person or beneficiary of such Medical Savings
199	Account.
200	Section 3.  Section 710.102, Florida Statutes, is amended
201	to read:
202	710.102  Definitions.--As used in this act, the term:
203	(1)  "Adult" means an individual who has attained the age
204	of 21 years.
205	(2)  "Benefit plan" means a retirement plan and may
206	include, but is not limited to, any pension, profit-sharing,
207	stock-bonus, or stock-ownership plan or individual retirement
208	account an employer's plan for the benefit of an employee or
209	partner.
210	(3)  "Broker" means a person lawfully engaged in the
211	business of effecting transactions in securities or commodities
212	for the person's own account or for the account of others.
213	(4)  "Conservator" means a person appointed or qualified by
214	a court to act as general, limited, or temporary guardian of a
215	minor's property or a person legally authorized to perform
216	substantially the same functions.
217	(5)  "Court" means the circuit court.
218	(6)  "Custodial property" means any interest in property
219	transferred to a custodian under this act and the income from
220	and proceeds of that interest in property.
221	(7)  "Custodian" means a person so designated under s.
222	710.111 or a successor or substitute custodian designated under
223	s. 710.121.
224	(8)  "Financial institution" means a bank, trust company,
225	savings institution, or credit union, chartered and supervised
226	under state or federal law.
227	(9)  "Legal representative" means an individual's personal
228	representative or conservator.
229	(10)  "Member of the minor's family" means the minor's
230	parent, stepparent, spouse, grandparent, brother, sister, uncle,
231	or aunt, whether of the whole or half blood or by adoption.
232	(11)  "Minor" means an individual who has not attained the
233	age of 21 years.
234	(12)  "Person" means an individual, corporation,
235	organization, or other legal entity.
236	(13)  "Personal representative" means an executor,
237	administrator, successor personal representative, or special
238	administrator of a decedent's estate or a person legally
239	authorized to perform substantially the same functions.
240	(14)  "Qualified minor's trust" means a trust that meets
241	the requirements of s. 2503(c) of the Internal Revenue Code of
242	1986, as amended.
243	(15)(14)  "State" includes any state of the United States,
244	the District of Columbia, the Commonwealth of Puerto Rico, and
245	any territory or possession subject to the legislative authority
246	of the United States.
247	(16)(15)  "Transfer" means a transaction that creates
248	custodial property under s. 710.111.
249	(17)(16)  "Transferor" means a person who makes a transfer
250	under this act.
251	(18)(17)  "Trust company" means a financial institution,
252	corporation, or other legal entity, authorized to exercise
253	general trust powers.
254	Section 4.  Subsection (1) of section 710.104, Florida
255	Statutes, is amended to read:
256	710.104  Nomination of custodian.--
257	(1)  A person having the right to designate the recipient
258	of property transferable upon the occurrence of a future event
259	may revocably nominate a custodian to receive the property for a
260	minor beneficiary upon the occurrence of the event by naming the
261	custodian followed in substance by the words: "as custodian for
262	(name of minor)   under the Florida Uniform Transfers to Minors
263	Act." The nomination may name one or more persons as substitute
264	custodians to whom the property must be transferred, in the
265	order named, if the first nominated custodian dies before the
266	transfer or is unable, declines, or is ineligible to serve. The
267	nomination may be made in a will, a trust, a deed, an instrument
268	exercising a power of appointment, or in a writing designating a
269	beneficiary of contractual rights, including, but not limited
270	to, the right to a benefit plan, which is registered with or
271	delivered to the payor, issuer, or other obligor of the
272	contractual rights.
273	Section 5.  Section 710.108, Florida Statutes, is amended
274	to read:
275	710.108  Transfer by obligor.--
276	(1)  Subject to subsections (2) and (3), a person not
277	subject to s. 710.106 or s. 710.107 who holds property,
278	including, but not limited to, a benefit plan, of a minor not
279	having a conservator, or who owes a liquidated debt to, a minor
280	not having a conservator, may make an irrevocable transfer to a
281	custodian for the benefit of the minor pursuant to s. 710.111.
282	(2)  If a person having the right to do so under s. 710.104
283	has nominated a custodian under that section to receive the
284	custodial property, the transfer must be made to that person.
285	(3)  If no custodian has been nominated under s. 710.104,
286	or all persons so nominated as custodian die before the transfer
287	or are unable, decline, or are ineligible to serve, a transfer
288	under this section may be made to an adult member of the minor's
289	family or to a trust company unless the property exceeds $15,000
290	$10,000 in value.
291	Section 6.  Section 710.116, Florida Statutes, is amended
292	to read:
293	710.116  Use of custodial property.--
294	(1)  A custodian may deliver or pay to the minor or expend
295	for the minor's benefit so much of the custodial property as the
296	custodian considers advisable for the use and benefit of the
297	minor, without court order and without regard to the duty or
298	ability of the custodian personally or of any other person to
299	support the minor, or to any other income or property of the
300	minor which may be applicable or available for that purpose.
301	(2)  A custodian may, without court order, transfer all or
302	part of the custodial property to a qualified minor's trust. A
303	transfer of property pursuant to this subsection terminates the
304	custodianship to the extent of the property transferred.
305	(3)(2)  On petition of an interested person or the minor if
306	the minor has attained the age of 14 years, the court may order
307	the custodian to deliver or pay to the minor or expend for the
308	minor's benefit so much of the custodial property as the court
309	considers advisable for the use and benefit of the minor.
310	(4)(3)  A delivery, payment, or expenditure under this
311	section is in addition to, not in substitution for, and does not
312	affect any obligation of a person to support the minor.
313	Section 7.  Section 733.808, Florida Statutes, is amended
314	to read:
315	733.808  Death benefits; disposition of proceeds.--
316	(1)  Death benefits of any kind, including, but not limited
317	to, proceeds of:
318	(a)  An individual life insurance policy;
319	(b)  A group life insurance policy;
320	(c)  A benefit plan as defined by s. 710.102 An employees'
321	trust or under a contract purchased by an employees' trust
322	forming part of a pension, stock bonus, or profit-sharing plan;
323	(d)  An annuity or endowment contract; and
324	(e)  A health or and accident policy,
325
326	may be made payable to the trustee under a trust agreement or
327	declaration of trust in existence at the time of the death of
328	the insured, employee, or annuitant or the owner of or
329	participant in the benefit plan. The death benefits shall be
330	held and disposed of by the trustee in accordance with the terms
331	of the trust as they appear in writing on the date of the death
332	of the insured, employee, or annuitant, owner, or participant.
333	It shall not be necessary to the validity of the trust agreement
334	or declaration of trust, whether revocable or irrevocable, that
335	it have a trust corpus other than the right of the trustee to
336	receive death benefits.
337	(2)  Death benefits of any kind, including, but not limited
338	to, proceeds of:
339	(a)  An individual life insurance policy;
340	(b)  A group life insurance policy;
341	(c)  A benefit plan as defined by s. 710.102 An employees'
342	trust, or under a contract purchased by an employees' trust,
343	forming part of a pension, stock bonus, or profit-sharing plan;
344	(d)  An annuity or endowment contract; and
345	(e)  A health or and accident policy,
346
347	may be made payable to the trustee named, or to be named, in a
348	written instrument that is admitted to probate as the last will
349	of the insured, the owner of the policy, the employee, owner, or
350	participant covered by the plan or contract, or any other
351	person, whether or not the will is in existence at the time of
352	designation. Upon the admission of the will to probate, the
353	death benefits shall be paid to the trustee, to be held,
354	administered, and disposed of in accordance with the terms of
355	the trust or trusts created by the will.
356	(3)  In the event no trustee makes proper claim to the
357	proceeds from the insurance company or other obligor within a
358	period of 6 months after the date of the death of the insured,
359	employee, or annuitant, owner, or participant, or if
360	satisfactory evidence is furnished to the insurance company or
361	obligor within that period that there is, or will be, no trustee
362	to receive the proceeds, payment shall be made by the insurance
363	company or obligor to the personal representative of the person
364	making the designation, unless otherwise provided by agreement
365	with the insurer or obligor during the lifetime of the insured,
366	employee, or annuitant, owner, or participant.
367	(4)  Death benefits payable as provided in subsection (1),
368	subsection (2), or subsection (3), unless paid to a personal
369	representative under the provisions of subsection (3), shall not
370	be deemed to be part of the decedent's estate, and shall not be
371	subject to any obligation to pay the expenses of the
372	administration and obligations of the decedent's estate or for
373	contribution required from a trust under s. 733.607(2) to any
374	greater extent than if the proceeds were payable directly to the
375	beneficiaries named in the trust.
376	(5)  The death benefits held in trust may be commingled
377	with any other assets that may properly come into the trust.
378	(6)  Nothing in This section does not shall affect the
379	validity of any designation of a beneficiary of proceeds
380	previously made that designates as beneficiary the trustee of
381	any trust established under a trust agreement or declaration of
382	trust or by will.
383	Section 8.  Subsection (2) of section 744.301, Florida
384	Statutes, is amended to read:
385	744.301  Natural guardians.--
386	(2)  The natural guardian or guardians are authorized, on
387	behalf of any of their minor children, to:
388	(a)  Settle and consummate a settlement of any claim or
389	cause of action accruing to any of their minor children for
390	damages to the person or property of any of said minor children;
391	(b)  and to Collect, receive, manage, and dispose of the
392	proceeds of any such settlement;
393	(c)  Collect, receive, manage, and dispose and of any other
394	real or personal property distributed from an estate or trust;
395	(d)  Collect, receive, manage, and dispose of and make
396	elections regarding the or proceeds from a life insurance policy
397	or annuity contract payable to, or otherwise accruing to the
398	benefit of, the child; and
399	(e)  Collect, receive, manage, dispose of, and make
400	elections regarding the proceeds of any benefit plan as defined
401	by s. 710.102, of which the minor is a beneficiary, participant,
402	or owner,
403
404	without appointment, authority, or bond during minority, when
405	the amount involved in any instance does not exceed $15,000,
406	without appointment, authority, or bond.
407	Section 9.  This act shall take effect upon becoming a law.

CODING: Words stricken are deletions; words underlined are additions.