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A bill to be entitled

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An act relating to trust administration; amending s.

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736.0703, F.S.; providing exceptions to duties and

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liabilities of cotrustees for excluded cotrustees under

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certain circumstances; relieving excluded cotrustees from

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specified liabilities and obligations under certain

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circumstances; providing for liabilities and obligations

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of included cotrustees; amending s. 736.0802, F.S.;

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providing an exception for trustee payments of costs and

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attorney's fees from trust assets except pursuant to court

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order under certain circumstances; requiring trustees to

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provide certain notice to beneficiaries; providing notice

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requirements; providing requirements for obtaining such a

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court order; specifying remedies; providing for specified

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refunds and sanctions; preserving certain court remedies;

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amending s. 736.1008, F.S.; specifying periods of repose

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barring claims by a beneficiary against a trustee;

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providing construction; providing an effective date.

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

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     Section 1.  Subsection (7) of section 736.0703, Florida

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Statutes, is amended, and subsection (9) is added to that

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section, to read:

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     736.0703  Cotrustees.--

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     (7) Except as otherwise provided in subsection (9), each

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cotrustee shall exercise reasonable care to:

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     (a)  Prevent a cotrustee from committing a breach of trust.

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     (b)  Compel a cotrustee to redress a breach of trust.

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     (9) If the terms of a trust instrument provide for the

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appointment of more than one trustee but confer upon one or more

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of the trustees, to the exclusion of the others, the power to

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direct or prevent specified actions of the trustees, the excluded

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trustees shall act in accordance with the exercise of the power.

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Except in cases of willful misconduct on the part of the directed

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trustee of which the excluded trustee has actual knowledge, an

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excluded trustee is not liable, individually or as a fiduciary,

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for any consequence that results from compliance with the

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exercise of the power, regardless of the information available to

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the excluded trustees. The excluded trustees are relieved of any

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obligation to review, inquire, investigate, or make

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recommendations or evaluations with respect to the exercise of

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the power. The trustee or trustees having the power to direct or

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prevent actions of the trustees shall be liable to the

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beneficiaries with respect to the exercise of the power as if the

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excluded trustees were not in office and shall have the exclusive

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obligation to account to and to defend any action brought by the

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beneficiaries with respect to the exercise of the power.

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     Section 2.  Subsection (10) of section 736.0802, Florida

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Statutes, is amended to read:

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     736.0802  Duty of loyalty.--

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     (10)  Payment of costs or attorney's fees incurred in any

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trust proceeding from the assets of the trust may be made by the

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trustee without the approval of any person and without court

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authorization, unless the court orders otherwise as provided in

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paragraph (b) except that court authorization shall be required

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if an action has been filed or defense asserted against the

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trustee based upon a breach of trust. Court authorization is not

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required if the action or defense is later withdrawn or dismissed

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by the party that is alleging a breach of trust or resolved

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without a determination by the court that the trustee has

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committed a breach of trust.

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     (a) If a claim or defense based upon a breach of trust is

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made against a trustee in a proceeding, the trustee shall provide

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written notice to each qualified beneficiary of the trust whose

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share of the trust may be affected by the payment of attorney's

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fees and costs of the intention to pay costs or attorney's fees

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incurred in the proceeding from the trust prior to making

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payment. The written notice shall be delivered by sending a copy

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by any commercial delivery service requiring a signed receipt, by

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any form of mail requiring a signed receipt, or as provided in

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the Florida Rules of Civil Procedure for service of process. The

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written notice shall inform each qualified beneficiary of the

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trust whose share of the trust may be affected by the payment of

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attorney's fees and costs of the right to apply to the court for

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an order prohibiting the trustee from paying attorney's fees or

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costs from trust assets. If a trustee is served with a motion for

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an order prohibiting the trustee from paying attorney's fees or

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costs in the proceeding and the trustee pays attorney's fees or

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costs before an order is entered on the motion, the trustee and

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the trustee's attorneys who have been paid attorney's fees or

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costs from trust assets to defend against the claim or defense

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are subject to the remedies in paragraphs (b) and (c).

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     (b) If a claim or defense based upon breach of trust is

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made against a trustee in a proceeding, a party must obtain a

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court order to prohibit the trustee from paying costs or

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attorney's fees from trust assets. To obtain an order prohibiting

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payment of costs or attorney's fees from trust assets, a party

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must make a reasonable showing by evidence in the record or by

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proffering evidence that provides a reasonable basis for a court

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to conclude that there has been a breach of trust. The trustee

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may proffer evidence to rebut the evidence submitted by a party.

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The court in its discretion may defer ruling on the motion,

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pending discovery to be taken by the parties. If the court finds

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that there is a reasonable basis to conclude that there has been

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a breach of trust, unless the court finds good cause, the court

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shall enter an order prohibiting the payment of further

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attorney's fees and costs from the assets of the trust and shall

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order attorney's fees or costs previously paid from assets of the

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trust to be refunded. An order entered under this paragraph shall

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not limit a trustee's right to seek an order permitting the

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payment of some or all of the attorney's fees or costs incurred

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in the proceeding from trust assets, including any fees required

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to be refunded, after the claim or defense is finally determined

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by the court. If a claim or defense based upon a breach of trust

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is withdrawn, dismissed, or resolved without a determination by

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the court that the trustee committed a breach of trust after the

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entry of an order prohibiting payment of attorney's fees and

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costs pursuant to this paragraph, the trustee may pay costs or

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attorneys' fees incurred in the proceeding from the assets of the

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trust without further court authorization.

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     (c) If the court orders a refund under paragraph (b), the

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court may enter such sanctions as are appropriate if a refund is

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not made as directed by the court, including, but not limited to,

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striking defenses or pleadings filed by the trustee. Nothing in

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this subsection limits other remedies and sanctions the court may

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employ for the failure to refund timely.

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     (d) Nothing in this subsection limits the power of the

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court to review fees and costs or the right of any interested

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persons to challenge fees and costs after payment, after an

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accounting, or after conclusion of the litigation.

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     (e) Notice under paragraph (a) is not required if the

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action or defense is later withdrawn or dismissed by the party

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that is alleging a breach of trust or resolved without a

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determination by the court that the trustee has committed a

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breach of trust.

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     Section 3.  Subsection (3) of section 736.1008, Florida

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Statutes, is amended, subsection (6) of that section is

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renumbered as subsection (7), and new subsection (6) is added to

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that section, to read:

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     736.1008  Limitations on proceedings against trustees.--

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     (3)  When a trustee has not issued a final trust accounting

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or has not given written notice to the beneficiary of the

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availability of the trust records for examination and that claims

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with respect to matters not adequately disclosed may be barred, a

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claim against the trustee for breach of trust based on a matter

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not adequately disclosed in a trust disclosure document is barred

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as provided in chapter 95 and accrues when the beneficiary has

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actual knowledge of:

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     (a) The facts upon which the claim is based if such actual

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knowledge is established by clear and convincing evidence; or

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     (b) The trustee's repudiation of the trust or adverse

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possession of trust assets, and is barred as provided in chapter

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95.

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Paragraph (a) applies to claims based upon acts or omissions

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occurring on or after July 1, 2008.

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     (6)(a) Notwithstanding subsections (1), (2), and (3), all

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claims by a beneficiary against a trustee are barred:

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     1. Upon the later of:

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     a. Ten years after the date the trust terminates, the

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trustee resigns, or the fiduciary relationship between the

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trustee and the beneficiary otherwise ends if the beneficiary had

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actual knowledge of the existence of the trust and the

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beneficiary's status as a beneficiary throughout the 10-year

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period; or

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     b. Twenty years after the date of the act or omission of

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the trustee that is complained of if the beneficiary had actual

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knowledge of the existence of the trust and the beneficiary's

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status as a beneficiary throughout the 20-year period; or

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     2. Forty years after the date the trust terminates, the

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trustee resigns, or the fiduciary relationship between the

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trustee and the beneficiary otherwise ends.

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     (b) When a beneficiary shows by clear and convincing

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evidence that a trustee actively concealed facts supporting a

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cause of action, any existing applicable statute of repose shall

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be extended by 30 years.

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     (c) For purposes of sub-subparagraph (a)1.b., the failure

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of the trustee to take corrective action is not a separate act or

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omission and does not extend the period of repose established by

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this subsection.

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     (d) This subsection applies to claims based upon acts or

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omissions occurring on or after July 1, 2008.

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     Section 4.  This act shall take effect July 1, 2008.