CS/HB 743

1	A bill to be entitled
2	An act relating to duties, powers, and liabilities of
3	trustees; amending s. 660.417, F.S.; revising criteria for
4	investments in certain investment instruments; creating s.
5	736.04117, F.S.; providing criteria, requirements, and
6	limitations on a trustee's power to invade the principal
7	of a trust; specifying conditions under which
8	discretionary distributions may be made in further trust;
9	amending s. 736.0802, F.S.; specifying additional trust
10	property transactions not voidable by a beneficiary;
11	revising certain disclosure and applicability
12	requirements; broadening authority for investing in
13	certain investment instruments; revising definitions;
14	excusing trustees from certain compliance requirements
15	under certain circumstances; amending s. 736.0816, F.S.;
16	defining the term "mutual fund" for certain purposes;
17	amending s. 736.1008, F.S.; revising effective dates
18	relating to limitations on proceedings against trustees;
19	amending s. 736.1011, F.S.; providing construction
20	relating to trustee drafts of exculpatory terms in a trust
21	instrument; amending s. 689.071, F.S.; limiting the
22	definition of the term "land trust" to an arrangement in
23	which title to real property is vested in a trustee by a
24	recorded instrument that confers certain authority as
25	prescribed by state law; providing that such a recorded
26	instrument does not itself create an entity; providing
27	that a recorded instrument is effective regardless of
28	whether it refers to beneficiaries of the trust; providing
29	that a recorded instrument vests both legal and equitable
30	title to real property or the interest therein in the
31	trustee; conforming cross-references; amending s. 731.201,
32	F.S.; revising a definition; amending s. 731.303, F.S.;
33	excluding trusts from guidelines regarding administration
34	and judicial proceedings; amending s. 736.0102, F.S.;
35	conforming a cross-reference; amending s. 736.0501, F.S.;
36	limiting the ability of creditors or assignees of a
37	beneficiary to reach the beneficiary's interest in a
38	trust; amending s. 736.0502, F.S.; clarifying the
39	application of restrictions on transferring a
40	beneficiary's interest under a spendthrift provision;
41	amending s. 736.0503, F.S.; providing an exception to a
42	provision authorizing the attachment of trust
43	distributions; amending s. 736.0504, F.S.; defining the
44	term "discretionary distribution"; prohibiting certain
45	creditors from compelling distributions or attaching a
46	beneficiary's interest or expectancy; amending s.
47	736.0813, F.S.; conforming a date of applicability of the
48	accounting provision and corresponding limitations to the
49	effective date of the code; amending s. 736.1106, F.S.;
50	providing that certain antilapse provisions continue to
51	apply to irrevocable trusts created between June 12, 2003,
52	and July 1, 2007; amending s. 736.1204, F.S.; clarifying
53	the use of income interest of a trust; amending ss.
54	736.1209 and 736.1001, F.S., relating to the release of
55	power by a trustee and removal of a trustee; conforming
56	cross-references; providing an effective date.
57
58	Be It Enacted by the Legislature of the State of Florida:
59
60	Section 1.  Subsection (3) of section 660.417, Florida
61	Statutes, as amended by section 18 of chapter 2006-217, Laws of
62	Florida, is amended to read:
63	660.417  Investment of fiduciary funds in investment
64	instruments; permissible activity under certain circumstances;
65	limitations.--
66	(3)  The fact that such bank or trust company or an
67	affiliate of the bank or trust company owns or controls
68	investment instruments shall not preclude the bank or trust
69	company acting as a fiduciary from investing or reinvesting in
70	such investment instruments, provided such investment
71	instruments:
72	(a)  Are held for sale by the bank or trust company or by
73	an affiliate of the bank or trust company in the ordinary course
74	of its business of providing investment services to its
75	customers and do not include any such interests held by the bank
76	or trust company or by an affiliate of the bank or trust company
77	for its own account.
78	(b)  When Are sold primarily to accounts for which the bank
79	or trust company is not acting as a trustee of a trust as
80	defined in s. 731.201(35):
81	1.  Are available for sale to accounts of other customers;
82	and
83	2.  If sold to other customers, are not sold to the trust
84	accounts fiduciary upon terms that are less not more favorable
85	to the buyer than the terms upon which they are normally sold to
86	the other customers accounts for which the bank or trust company
87	is acting as a fiduciary.
88	Section 2.  Section 736.04117, Florida Statutes, is created
89	to read:
90	736.04117  Trustee's power to invade principal in trust.--
91	(1)(a)  Unless the trust instrument expressly provides
92	otherwise, a trustee who has absolute power under the terms of a
93	trust to invade the principal of the trust, referred to in this
94	section as the "first trust," to make distributions to or for
95	the benefit of one or more persons may instead exercise the
96	power by appointing all or part of the principal of the trust
97	subject to the power in favor of a trustee of another trust,
98	referred to in this section as the "second trust," for the
99	current benefit of one or more of such persons under the same
100	trust instrument or under a different trust instrument;
101	provided:
102	1.  The beneficiaries of the second trust may include only
103	beneficiaries of the first trust;
104	2.  The second trust may not reduce any fixed income,
105	annuity, or unitrust interest in the assets of the first trust;
106	and
107	3.  If any contribution to the first trust qualified for a
108	marital or charitable deduction for federal income, gift, or
109	estate tax purposes under the Internal Revenue Code of 1986, as
110	amended, the second trust shall not contain any provision which,
111	if included in the first trust, would have prevented the first
112	trust from qualifying for such a deduction or would have reduced
113	the amount of such deduction.
114	(b)  For purposes of this subsection, an absolute power to
115	invade principal shall include a power to invade principal that
116	is not limited to specific or ascertainable purposes, such as
117	health, education, maintenance, and support, whether or not the
118	term "absolute" is used. A power to invade principal for
119	purposes such as best interests, welfare, comfort, or happiness
120	shall constitute an absolute power not limited to specific or
121	ascertainable purposes.
122	(2)  The exercise of a power to invade principal under
123	subsection (1) shall be by an instrument in writing, signed and
124	acknowledged by the trustee, and filed with the records of the
125	first trust.
126	(3)  The exercise of a power to invade principal under
127	subsection (1) shall be considered the exercise of a power of
128	appointment, other than a power to appoint to the trustee, the
129	trustee's creditors, the trustee's estate, or the creditors of
130	the trustee's estate, and shall be subject to the provisions of
131	s. 689.225 covering the time at which the permissible period of
132	the rule against perpetuities begins and the law that determines
133	the permissible period of the rule against perpetuities of the
134	first trust.
135	(4)  The trustee shall notify all qualified beneficiaries
136	of the first trust, in writing, at least 60 days prior to the
137	effective date of the trustee's exercise of the trustee's power
138	to invade principal pursuant to subsection (1), of the manner in
139	which the trustee intends to exercise the power. A copy of the
140	proposed instrument exercising the power shall satisfy the
141	trustee's notice obligation under this subsection. If all
142	qualified beneficiaries waive the notice period by signed
143	written instrument delivered to the trustee, the trustee's power
144	to invade principal shall be exercisable immediately. The
145	trustee's notice under this subsection shall not limit the right
146	of any beneficiary to object to the exercise of the trustee's
147	power to invade principal except as provided in other applicable
148	provisions of this code.
149	(5)  The exercise of the power to invade principal under
150	subsection (1) is not prohibited by a spendthrift clause or by a
151	provision in the trust instrument that prohibits amendment or
152	revocation of the trust.
153	(6)  Nothing in this section is intended to create or imply
154	a duty to exercise a power to invade principal and no inference
155	of impropriety shall be made as a result of a trustee not
156	exercising the power to invade principal conferred under
157	subsection (1).
158	(7)  The provisions of this section shall not be construed
159	to abridge the right of any trustee who has a power of invasion
160	to appoint property in further trust that arises under the terms
161	of the first trust or under any other section of this code or
162	under another provision of law or under common law.
163	Section 3.  Subsections (2) and (5) of section 736.0802,
164	Florida Statutes, are amended to read:
165	736.0802  Duty of loyalty.--
166	(2)  Subject to the rights of persons dealing with or
167	assisting the trustee as provided in s. 736.1016, a sale,
168	encumbrance, or other transaction involving the investment or
169	management of trust property entered into by the trustee for the
170	trustee's own personal account or which is otherwise affected by
171	a conflict between the trustee's fiduciary and personal
172	interests is voidable by a beneficiary affected by the
173	transaction unless:
174	(a)  The transaction was authorized by the terms of the
175	trust;
176	(b)  The transaction was approved by the court;
177	(c)  The beneficiary did not commence a judicial proceeding
178	within the time allowed by s. 736.1008;
179	(d)  The beneficiary consented to the trustee's conduct,
180	ratified the transaction, or released the trustee in compliance
181	with s. 736.1012;
182	(e)  The transaction involves a contract entered into or
183	claim acquired by the trustee when that person had not become or
184	contemplated becoming trustee; or
185	(f)  The transaction was consented to in writing by a
186	settlor of the trust while the trust was revocable; or.
187	(g)  The transaction is one by a corporate trustee that
188	involves a money market mutual fund, mutual fund, or a common
189	trust fund described in s. 736.0816(3).
190	(5)(a)  An investment by a trustee authorized by lawful
191	authority to engage in trust business, as defined in s.
192	658.12(20), in investment instruments, as defined in s.
193	660.25(6), that are owned or controlled by the trustee or its
194	affiliate, or from which the trustee or its affiliate receives
195	compensation for providing services in a capacity other than as
196	trustee, is not presumed to be affected by a conflict between
197	personal and fiduciary interests provided the investment
198	otherwise complies with chapters 518 and 660 and the trustee
199	complies with the disclosure requirements of this subsection.
200	(b)  A trustee who, pursuant to this subsection, invests
201	trust funds in investment instruments that are owned or
202	controlled by the trustee or its affiliate shall disclose the
203	following to all qualified beneficiaries:
204	1.  Notice that the trustee has invested trust funds in
205	investment instruments owned or controlled by the trustee or its
206	affiliate.
207	2.  The identity of the investment instruments.
208	3.  The identity and relationship to the trustee of any
209	affiliate that owns or controls the investment instruments.
210	(c)  A trustee who, pursuant to this subsection, invests
211	trust funds in investment instruments with respect to which the
212	trustee or its affiliate receives compensation for providing
213	services in a capacity other than as trustee shall disclose to
214	all qualified beneficiaries, the nature of the services provided
215	by the trustee or its affiliate, and all compensation,
216	including, but not limited to, fees or commissions paid or to be
217	paid by the account and received or to be received by an
218	affiliate arising from such affiliated investment.
219	(d)  Disclosure required by this subsection shall be made
220	at least annually unless there has been no change in the method
221	or increase in the rate at which such compensation is calculated
222	since the most recent disclosure. The disclosure may be given in
223	a trust disclosure document as defined in s. 736.1008, in a copy
224	of the prospectus for the investment instrument, in any other
225	written disclosure prepared for the investment instrument under
226	applicable federal or state law, or in a written summary that
227	includes all compensation received or to be received by the
228	trustee and any affiliate of the trustee and an explanation of
229	the manner in which such compensation is calculated, either as a
230	percentage of the assets invested or by some other method.
231	(e)  This subsection shall apply as follows:
232	1.  This subsection does not apply to qualified investment
233	instruments or to a trust for which a right of revocation
234	exists.
235	2.  For investment instruments other than qualified
236	investment instruments, paragraphs (a), (b), (c), and (d) shall
237	apply to irrevocable trusts created on or after July 1, 2007,
238	which expressly authorize the trustee, by specific reference to
239	this subsection, to invest in investment instruments owned or
240	controlled by the trustee or its affiliate.
241	3.  For investment instruments other than qualified
242	investment instruments, paragraphs (a), (b), (c), and (d) shall
243	apply to irrevocable trusts created on or after July 1, 2007,
244	that are not described in subparagraph 2. and to irrevocable
245	trusts created prior to July 1, 2007, only as follows:
246	a.  Such paragraphs shall not apply until 60 days after the
247	statement required in paragraph (f) is provided and a majority
248	of the qualified beneficiaries have provided written consent.
249	All consents must be obtained within 90 days after the date of
250	delivery of the written request. Once given, consent shall be
251	valid as to all investment instruments acquired pursuant to the
252	consent prior to the date of any withdrawal of the consent no
253	objection is made or any objection which is made has been
254	terminated.
255	(I)  An objection is made if, within 60 days after the date
256	of the statement required in paragraph (f), a super majority of
257	the eligible beneficiaries deliver to the trustee written
258	objections to the application of this subsection to such trust.
259	An objection shall be deemed to be delivered to the trustee on
260	the date the objection is mailed to the mailing address listed
261	in the notice provided in paragraph (f).
262	(II)  An objection is terminated upon the earlier of the
263	receipt of consent from a super majority of eligible
264	beneficiaries of the class that made the objection or the
265	resolution of the objection pursuant to this subparagraph.
266	(III)  If an objection is delivered to the trustee, the
267	trustee may petition the court for an order overruling the
268	objection and authorizing the trustee to make investments under
269	this subsection. The burden shall be on the trustee to show good
270	cause for the relief sought.
271	(I)(IV)  Any qualified beneficiary may petition the court
272	for an order to prohibit, limit, or restrict a trustee's
273	authority to make investments under this subsection. The burden
274	shall be upon the petitioning beneficiary to show good cause for
275	the relief sought.
276	(II)(V)  The court may award costs and attorney's fees
277	relating to any petition under this subparagraph in the same
278	manner as in chancery actions. When costs and attorney's fees
279	are to be paid out of the trust, the court, in its discretion,
280	may direct from which part of the trust such costs and fees
281	shall be paid.
282	b.  The consent objection of a majority of the qualified
283	super majority of eligible beneficiaries under this subparagraph
284	may thereafter be withdrawn prospectively removed by the written
285	notice consent of a super majority of any one of the class or
286	classes of the qualified those eligible beneficiaries that made
287	the objection.
288	(f)1.  The trustee of a trust described in s. 731.201(35)
289	may request authority to invest in Any time prior to initially
290	investing in any investment instruments instrument described in
291	this subsection other than a qualified investment instrument, by
292	providing the trustee of a trust described in subparagraph (e)3.
293	shall provide to all qualified beneficiaries a written request
294	statement containing the following:
295	a.  The name, telephone number, street address, and mailing
296	address of the trustee and of any individuals who may be
297	contacted for further information.
298	b.  A statement that the investment or investments cannot
299	be made without the consent of a majority of each class of the
300	qualified beneficiaries, unless a super majority of the eligible
301	beneficiaries objects to the application of this subsection to
302	the trust within 60 days after the date the statement pursuant
303	to this subsection was delivered, this subsection shall apply to
304	the trust.
305	c.  A statement that, if a majority of each class of
306	qualified beneficiaries consent this subsection applies to the
307	trust, the trustee will have the right to make investments in
308	investment instruments, as defined in s. 660.25(6), which are
309	owned or controlled by the trustee or its affiliate, or from
310	which the trustee or its affiliate receives compensation for
311	providing services in a capacity other than as trustee, that
312	such investment instruments may include investment instruments
313	sold primarily to trust accounts, and that the trustee or its
314	affiliate may receive fees in addition to the trustee's
315	compensation for administering the trust.
316	d.  A statement that the consent may be withdrawn
317	prospectively at any time by written notice given by a majority
318	of any class of the qualified beneficiaries.
319
320	A statement by the trustee is not delivered if the statement is
321	accompanied by another written communication other than a
322	written communication by the trustee that refers only to the
323	statement.
324	2.  For purposes of paragraph (e) and this paragraph:
325	a.  "Eligible beneficiaries" means:
326	(I)  If at the time the determination is made there are one
327	or more beneficiaries as described in s. 736.0103(14)(c), the
328	beneficiaries described in s. 736.0103(14)(a) and (c); or
329	(II)  If there is no beneficiary described in s.
330	736.0103(14)(c), the beneficiaries described in s.
331	736.0103(14)(a) and (b).
332	a.b.  "Super Majority of the qualified eligible
333	beneficiaries" means:
334	(I)  If at the time the determination is made there are one
335	or more beneficiaries as described in s. 736.0103(14)(c), at
336	least a majority two-thirds in interest of the beneficiaries
337	described in s. 736.0103(14)(a), at least a majority in interest
338	of the beneficiaries described in s. 736.0103(14)(b), and at
339	least a majority or two-thirds in interest of the beneficiaries
340	described in s. 736.0103(14)(c), if the interests of the
341	beneficiaries are reasonably ascertainable; otherwise, a
342	majority two-thirds in number of each either such class; or
343	(II)  If there is no beneficiary as described in s.
344	736.0103(14)(c), at least a majority two-thirds in interest of
345	the beneficiaries described in s. 736.0103(14)(a) and at least a
346	majority or two-thirds in interest of the beneficiaries
347	described in s. 736.0103(14)(b), if the interests of the
348	beneficiaries are reasonably ascertainable; otherwise, a
349	majority two-thirds in number of each either such class.
350	b.c.  "Qualified investment instrument" means a mutual
351	fund, common trust fund, or money market fund described in and
352	governed by s. 736.0816(3).
353	c.d.  An irrevocable trust is created upon execution of the
354	trust instrument. If a trust that was revocable when created
355	thereafter becomes irrevocable, the irrevocable trust is created
356	when the right of revocation terminates.
357	(g)  Nothing in this chapter is intended to create or imply
358	a duty for the trustee to seek the application of this
359	subsection to invest in investment instruments described in
360	paragraph (a), and no inference of impropriety may be made as a
361	result of a trustee electing not to invest trust assets in
362	investment instruments described in paragraph (a).
363	(h)  This subsection is not the exclusive authority under
364	this code for investing in investment instruments described in
365	paragraph (a). A trustee who invests trust funds in investment
366	instruments described in paragraph (a) is not required to comply
367	with paragraph (b), paragraph (c), or paragraph (f) if the
368	trustee is permitted to invest in such investment instruments
369	pursuant to subsection (2).
370	Section 4.  Subsection (3) of section 736.0816, Florida
371	Statutes, is amended to read:
372	736.0816  Specific powers of trustee.--Except as limited or
373	restricted by this code, a trustee may:
374	(3)  Acquire an undivided interest in a trust asset,
375	including, but not limited to, a money market mutual fund,
376	mutual fund, or common trust fund, in which asset the trustee
377	holds an undivided interest in any trust capacity, including any
378	money market or other mutual fund from which the trustee or any
379	affiliate or associate of the trustee is entitled to receive
380	reasonable compensation for providing necessary services as an
381	investment adviser, portfolio manager, or servicing agent. A
382	trustee or affiliate or associate of the trustee may receive
383	compensation for such services in addition to fees received for
384	administering the trust provided such compensation is fully
385	disclosed in writing to all qualified beneficiaries. As used in
386	this subsection, the term "mutual fund" includes an open-end or
387	closed-end management investment company or investment trust
388	registered under the Investment Company Act of 1940, 15 U.S.C.
389	ss. 80a-1 et seq., as amended.
390	Section 5.  Subsection (6) of section 736.1008, Florida
391	Statutes, is amended to read:
392	736.1008  Limitations on proceedings against trustees.--
393	(6)  This section applies to trust accountings for
394	accounting periods beginning on or after July January 1, 2007
395	2008, and to written reports, other than trust accountings,
396	received by a beneficiary on or after July January 1, 2007 2008.
397	Section 6.  Subsection (2) of section 736.1011, Florida
398	Statutes, is amended to read:
399	736.1011  Exculpation of trustee.--
400	(2)  An exculpatory term drafted or caused to be drafted by
401	the trustee is invalid as an abuse of a fiduciary or
402	confidential relationship unless:
403	(a)  The trustee proves that the exculpatory term is fair
404	under the circumstances.
405	(b)  and that The term's existence and contents were
406	adequately communicated directly to the settlor or the
407	independent attorney of the settlor. This paragraph applies only
408	to trusts created on or after July 1, 2007.
409	Section 7.  Paragraph (d) of subsection (2), subsections
410	(3) and (7), and paragraph (a) of subsection (9) of section
411	689.071, Florida Statutes, as amended by section 21 of chapter
412	2006-217, Laws of Florida, are amended to read:
413	689.071  Florida Land Trust Act.--
414	(2)  DEFINITIONS.--As used in this section, the term:
415	(d)  "Land trust" is not the creation of an entity, but
416	means any express written agreement or arrangement by which a
417	use, confidence, or trust is declared of any land, or of any
418	charge upon land, for the use or benefit of any beneficiary,
419	under which the title to real property, both legal and
420	equitable, is vested in a trustee by a recorded instrument that
421	confers on the trustee the power and authority prescribed in
422	subsection (3). The recorded instrument does not itself create
423	an entity, regardless of whether the relationship among the
424	beneficiaries and the trustee is deemed to be an entity under
425	other applicable law held by a trustee, subject only to the
426	execution of the trust, which may be enforced by the
427	beneficiaries.
428	(3)  OWNERSHIP VESTS IN TRUSTEE.--Every conveyance, deed,
429	mortgage, lease assignment, or other instrument heretofore or
430	hereafter made, hereinafter referred to as the "the recorded
431	instrument," transferring any interest in real property in this
432	state, including, but not limited to, a leasehold or mortgagee
433	interest, to any person or any corporation, bank, trust company,
434	or other entity duly formed under the laws of its state of
435	qualification, in which recorded instrument the person,
436	corporation, bank, trust company, or other entity is designated
437	"trustee," or "as trustee," without therein naming the
438	beneficiaries of such trust, whether or not reference is made in
439	the recorded instrument to the beneficiaries of such trust or to
440	any separate collateral unrecorded declarations or agreements,
441	is effective to vest, and is hereby declared to have vested, in
442	such trustee both legal and equitable title, and full rights of
443	ownership, over the real property or interest therein, with full
444	power and authority as granted and provided in the recorded
445	instrument to deal in and with the property or interest therein
446	or any part thereof; provided, the recorded instrument confers
447	on the trustee the power and authority either to protect, to
448	conserve, and to sell, or to lease, or to encumber, or otherwise
449	to manage and dispose of the real property described in the
450	recorded instrument.
451	(7)  TRUSTEE LIABILITY.--In addition to any other
452	limitation on personal liability existing pursuant to statute or
453	otherwise, the provisions of ss. 736.08125 and 736.1013 s.
454	736.1013 apply to the trustee of a land trust created pursuant
455	to this section.
456	(9)  SUCCESSOR TRUSTEE.--
457	(a)  The provisions of s. 736.0705 s. 737.309 relating to
458	the resignation of a trustee do not apply to the appointment of
459	a successor trustee under this section.
460	Section 8.  Subsection (35) of section 731.201, Florida
461	Statutes, as amended by section 29 of chapter 2006-217, Laws of
462	Florida, is amended to read:
463	731.201  General definitions.--Subject to additional
464	definitions in subsequent chapters that are applicable to
465	specific chapters or parts, and unless the context otherwise
466	requires, in this code, in s. 409.9101, and in chapters 736,
467	738, 739, and 744, the term:
468	(35)  "Trust" means an express trust, private or
469	charitable, with additions to it, wherever and however created.
470	It also includes a trust created or determined by a judgment or
471	decree under which the trust is to be administered in the manner
472	of an express trust. "Trust" excludes other constructive trusts,
473	and it excludes resulting trusts; conservatorships; custodial
474	arrangements pursuant to the Florida Uniform Transfers to Minors
475	Act; business trusts providing for certificates to be issued to
476	beneficiaries; common trust funds; land trusts under s. 689.071,
477	except to the extent provided in s. 689.071(7) 689.05; trusts
478	created by the form of the account or by the deposit agreement
479	at a financial institution; voting trusts; security
480	arrangements; liquidation trusts; trusts for the primary purpose
481	of paying debts, dividends, interest, salaries, wages, profits,
482	pensions, or employee benefits of any kind; and any arrangement
483	under which a person is nominee or escrowee for another.
484	Section 9.  Section 731.303, Florida Statutes, as amended
485	by section 30 of chapter 2006-217, Laws of Florida, is amended
486	to read:
487	731.303  Representation.--In the administration of or in
488	judicial proceedings involving estates of decedents or trusts,
489	the following apply:
490	(1)  Persons are bound by orders binding others in the
491	following cases:
492	(a)1.  Orders binding the sole holder or all coholders of a
493	power of revocation or a general, special, or limited power of
494	appointment, including one in the form of a power of amendment
495	or revocation to the extent that the power has not become
496	unexercisable in fact, bind all persons to the extent that their
497	interests, as persons who may take by virtue of the exercise or
498	nonexercise of the power, are subject to the power.
499	2.  Subparagraph 1. does not apply to:
500	a.  Any matter determined by the court to involve fraud or
501	bad faith by the trustee;
502	b.  A power of a trustee to distribute trust property; or
503	c.  A power of appointment held by a person while the
504	person is the sole trustee.
505	(b)  To the extent there is no conflict of interest between
506	them or among the persons represented:
507	1.  Orders binding a guardian of the property bind the
508	ward.
509	2.  Orders binding a trustee bind beneficiaries of the
510	trust in proceedings to probate a will, in establishing or
511	adding to a trust, in reviewing the acts or accounts of a prior
512	fiduciary, and in proceedings involving creditors or other third
513	parties. However, for purposes of this section, a conflict of
514	interest shall be deemed to exist when each trustee of a trust
515	that is a beneficiary of the estate is also a personal
516	representative of the estate.
517	3.  Orders binding a personal representative bind persons
518	interested in the undistributed assets of a decedent's estate,
519	in actions or proceedings by or against the estate.
520	(c)  An unborn or unascertained person, or a minor or any
521	other person under a legal disability, who is not otherwise
522	represented is bound by an order to the extent that person's
523	interest is represented by another party having the same or
524	greater quality of interest in the proceeding.
525	(2)  Orders binding a guardian of the person shall not bind
526	the ward.
527	(3)  In proceedings involving the administration of estates
528	or trusts, notice is required as follows:
529	(a)  Notice as prescribed by law shall be given to every
530	interested person, or to one who can bind the interested person
531	as described in paragraph (1)(a) or paragraph (1)(b). Notice may
532	be given both to the interested person and to another who can
533	bind him or her.
534	(b)  Notice is given to unborn or unascertained persons who
535	are not represented pursuant to paragraph (1)(a) or paragraph
536	(1)(b) by giving notice to all known persons whose interests in
537	the proceedings are the same as, or of a greater quality than,
538	those of the unborn or unascertained persons.
539	(4)  If the court determines that representation of the
540	interest would otherwise be inadequate, the court may, at any
541	time, appoint a guardian ad litem to represent the interests of
542	an incapacitated person, an unborn or unascertained person, a
543	minor or any other person otherwise under a legal disability, or
544	a person whose identity or address is unknown. If not precluded
545	by conflict of interest, a guardian ad litem may be appointed to
546	represent several persons or interests.
547	(5)  The holder of a power of appointment over property not
548	held in trust may represent and bind persons whose interests, as
549	permissible appointees, takers in default, or otherwise, are
550	subject to the power. Representation under this subsection does
551	not apply to:
552	(a)  Any matter determined by the court to involve fraud or
553	bad faith by the trustee;
554	(b)  A power of a trustee to distribute trust property; or
555	(c)  A power of appointment held by a person while the
556	person is the sole trustee.
557	Section 10.  Section 736.0102, Florida Statutes, is amended
558	to read:
559	736.0102  Scope.--This code applies to express trusts,
560	charitable or noncharitable, and trusts created pursuant to a
561	law, judgment, or decree that requires the trust to be
562	administered in the manner of an express trust. This code does
563	not apply to constructive or resulting trusts; conservatorships;
564	custodial arrangements pursuant to the Florida Uniform Transfers
565	to Minors Act; business trusts providing for certificates to be
566	issued to beneficiaries; common trust funds; land trusts under
567	s. 689.071, except to the extent provided in s. 689.071(7) s.
568	689.05; trusts created by the form of the account or by the
569	deposit agreement at a financial institution; voting trusts;
570	security arrangements; liquidation trusts; trusts for the
571	primary purpose of paying debts, dividends, interest, salaries,
572	wages, profits, pensions, or employee benefits of any kind; and
573	any arrangement under which a person is nominee or escrowee for
574	another.
575	Section 11.  Section 736.0501, Florida Statutes, is amended
576	to read:
577	736.0501  Rights of beneficiary's creditor or
578	assignee.--Except as provided in s. 736.0504, to the extent a
579	beneficiary's interest is not subject to a spendthrift
580	provision, the court may authorize a creditor or assignee of the
581	beneficiary to reach the beneficiary's interest by attachment of
582	present or future distributions to or for the benefit of the
583	beneficiary or by other means. The court may limit the award to
584	such relief as is appropriate under the circumstances.
585	Section 12.  Subsection (1) of section 736.0502, Florida
586	Statutes, is amended to read:
587	736.0502  Spendthrift provision.--
588	(1)  A spendthrift provision is valid only if the provision
589	restrains both voluntary and involuntary transfer of a
590	beneficiary's interest. This subsection does not apply to any
591	trust the terms of which are included in an instrument executed
592	before in existence on the effective date of this code.
593	Section 13.  Subsection (3) of section 736.0503, Florida
594	Statutes, is amended to read:
595	736.0503  Exceptions to spendthrift provision.--
596	(3)  Except as otherwise provided in this subsection and in
597	s. 736.0504, a claimant against which a spendthrift provision
598	may not be enforced may obtain from a court, or pursuant to the
599	Uniform Interstate Family Support Act, an order attaching
600	present or future distributions to or for the benefit of the
601	beneficiary. The court may limit the award to such relief as is
602	appropriate under the circumstances. Notwithstanding this
603	subsection, the remedies provided in this subsection apply to a
604	claim by a beneficiary's child, spouse, former spouse, or a
605	judgment creditor described in paragraph (2)(a) or paragraph
606	(2)(b) only as a last resort upon an initial showing that
607	traditional methods of enforcing the claim are insufficient.
608	Section 14.  Section 736.0504, Florida Statutes, is amended
609	to read:
610	736.0504  Discretionary trusts; effect of standard.--
611	(1)  As used in this section, the term "discretionary
612	distribution" means a distribution that is subject to the
613	trustee's discretion whether or not the discretion is expressed
614	in the form of a standard of distribution and whether or not the
615	trustee has abused the discretion.
616	(2)  Whether or not a trust contains a spendthrift
617	provision, if a trustee may make discretionary distributions to
618	or for the benefit of a beneficiary, a creditor of the
619	beneficiary, including a creditor as described in s.
620	736.0503(2), may not:
621	(a)  Compel a distribution that is subject to the trustee's
622	discretion; or
623	(b)  Attach or otherwise reach the interest, if any, which
624	the beneficiary might have as a result of the trustee's
625	authority to make discretionary distributions to or for the
626	benefit of the beneficiary. Whether or not a trust contains a
627	spendthrift provision, a creditor of a beneficiary may not
628	compel a distribution that is subject to the trustee's
629	discretion, even if:
630	(a)  The discretion is expressed in the form of a standard
631	of distribution; or
632	(b)  The trustee has abused the discretion.
633	(3)(2)  If the trustee's discretion to make distributions
634	for the trustee's own benefit is limited by an ascertainable
635	standard, a creditor may not reach or compel distribution of the
636	beneficial interest except to the extent the interest would be
637	subject to the creditor's claim were the beneficiary not acting
638	as trustee.
639	(4)(3)  This section does not limit the right of a
640	beneficiary to maintain a judicial proceeding against a trustee
641	for an abuse of discretion or failure to comply with a standard
642	for distribution.
643	Section 15.  Subsection (5) of section 736.0813, Florida
644	Statutes, is amended to read:
645	736.0813  Duty to inform and account.--The trustee shall
646	keep the qualified beneficiaries of the trust reasonably
647	informed of the trust and its administration.
648	(5)  This section applies to trust accountings rendered for
649	accounting periods beginning on or after July 1, 2007 January 1,
650	2008.
651	Section 16.  Subsection (5) of section 736.1106, Florida
652	Statutes, is amended to read:
653	736.1106  Antilapse; survivorship with respect to future
654	interests under terms of inter vivos and testamentary trusts;
655	substitute takers.--
656	(5)  Subsections (1) through (4) apply This section applies
657	to all trusts other than trusts that were irrevocable before the
658	effective date of this code. Sections 732.603, 732.604, and
659	737.6035, as they exist on June 30, 2007, continue to apply to
660	other trusts executed on or after June 12, 2003.
661	Section 17.  Paragraph (a) of subsection (4) of section
662	736.1204, Florida Statutes, is amended to read:
663	736.1204  Powers and duties of trustee of a private
664	foundation trust or a split interest trust.--
665	(4)  Paragraphs (3)(b) and (c) shall not apply to a split
666	interest trust if:
667	(a)  All the income interest from income, and none of the
668	remainder interest, of the trust is devoted solely to one or
669	more of the purposes described in s. 170(c)(2)(B) of the
670	Internal Revenue Code, and all amounts in the trust for which a
671	deduction was allowed under s. 170, s. 545(b)(2), s. 556(b)(2),
672	s. 642(c), s. 2055, s. 2106(a)(2), or s. 2522 of the Internal
673	Revenue Code have an aggregate fair market value of not more
674	than 60 percent of the aggregate fair market value of all
675	amounts in the trust; or
676	Section 18.  Section 736.1209, Florida Statutes, is amended
677	to read:
678	736.1209  Election to come under this part.--With the
679	consent of that organization or organizations, a trustee of a
680	trust for the benefit of a public charitable organization or
681	organizations may come under s. 736.1208(5) s. 736.0838(5) by
682	filing with the state attorney an election, accompanied by the
683	proof of required consent. Thereafter the trust shall be subject
684	to s. 736.1208(5).
685	Section 19.  Paragraph (g) of subsection (2) of section
686	736.1001, Florida Statutes, is amended to read:
687	736.1001  Remedies for breach of trust.--
688	(2)  To remedy a breach of trust that has occurred or may
689	occur, the court may:
690	(g)  Remove the trustee as provided in s. 736.0706 s.
691	736.706;
692	Section 20.  This act shall take effect July 1, 2007.

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