HB 361

1
A bill to be entitled
2An act relating to trust administration; amending s.
3733.607, F.S.; limiting a personal representative's
4entitlement to payment from a trust of certain estate
5expenses and obligations; specifying application of
6certain criteria in making certain payments from a trust;
7amending s. 733.707, F.S.; specifying application of
8additional provisions to liability for certain estate
9expense and obligation payments from a trust; amending s.
10736.0206, F.S.; deleting certain notice requirements
11relating to court review of a trustee's employment of
12certain persons; authorizing the award of expert witness
13fees from trust assets rather than requiring the award of
14such fees; providing a limitation; amending s. 736.0505,
15F.S.; revising a value criterion for determining the
16extent of treating the holder of a power of withdrawal as
17the settlor of a trust; providing criteria for determining
18who contributed certain trust assets under certain
19circumstances; amending s. 736.05053, F.S.; requiring
20application of priorities for pro rata abatement of
21nonresiduary trust dispositions together with nonresiduary
22devises; amending s. 736.1007, F.S.; deleting authority
23for a court to determine an attorney's compensation;
24deleting certain expert testimony and fee payment
25provisions; deleting requirements for certain court
26compensation determination proceedings to be part of a
27trust administration process and for court determination
28and payment of certain estate costs and fees from trust
29assets; providing an effective date.
30
31Be It Enacted by the Legislature of the State of Florida:
32
33     Section 1.  Subsection (2) of section 733.607, Florida
34Statutes, is amended to read:
35     733.607  Possession of estate.-
36     (2)  If, after providing for statutory entitlements and all
37devises other than residuary devises, the assets of the
38decedent's estate are insufficient to pay the expenses of the
39administration and obligations of the decedent's estate, the
40personal representative is entitled to payment from the trustee
41of a trust described in s. 733.707(3), in the amount the
42personal representative certifies in writing to be required to
43satisfy the insufficiency, subject to the exclusions and
44preferences under s. 736.05053. The provisions of s. 733.805
45shall apply in determining the amount of any payment required by
46this section.
47     Section 2.  Subsection (3) of section 733.707, Florida
48Statutes, is amended to read:
49     733.707  Order of payment of expenses and obligations.-
50     (3)  Any portion of a trust with respect to which a
51decedent who is the grantor has at the decedent's death a right
52of revocation, as defined in paragraph (e), either alone or in
53conjunction with any other person, is liable for the expenses of
54the administration and obligations of the decedent's estate to
55the extent the decedent's estate is insufficient to pay them as
56provided in ss. s. 733.607(2) and 736.05053.
57     (a)  For purposes of this subsection, any trusts
58established as part of, and all payments from, either an
59employee annuity described in s. 403 of the Internal Revenue
60Code of 1986, as amended, an Individual Retirement Account, as
61described in s. 408 of the Internal Revenue Code of 1986, as
62amended, a Keogh (HR-10) Plan, or a retirement or other plan
63established by a corporation which is qualified under s. 401 of
64the Internal Revenue Code of 1986, as amended, shall not be
65considered a trust over which the decedent has a right of
66revocation.
67     (b)  For purposes of this subsection, any trust described
68in s. 664 of the Internal Revenue Code of 1986, as amended,
69shall not be considered a trust over which the decedent has a
70right of revocation.
71     (c)  This subsection shall not impair any rights an
72individual has under a qualified domestic relations order as
73that term is defined in s. 414(p) of the Internal Revenue Code
74of 1986, as amended.
75     (d)  For purposes of this subsection, property held or
76received by a trust to the extent that the property would not
77have been subject to claims against the decedent's estate if it
78had been paid directly to a trust created under the decedent's
79will or other than to the decedent's estate, or assets received
80from any trust other than a trust described in this subsection,
81shall not be deemed assets of the trust available to the
82decedent's estate.
83     (e)  For purposes of this subsection, a "right of
84revocation" is a power retained by the decedent, held in any
85capacity, to:
86     1.  Amend or revoke the trust and revest the principal of
87the trust in the decedent; or
88     2.  Withdraw or appoint the principal of the trust to or
89for the decedent's benefit.
90     Section 3.  Subsections (1), (5), (6), and (7) of section
91736.0206, Florida Statutes, are amended to read:
92     736.0206  Proceedings for review of employment of agents
93and review of compensation of trustee and employees of trust.-
94     (1)  After notice to all interested persons, The court may
95review the propriety of the employment by a trustee of any
96person, including any attorney, auditor, investment adviser, or
97other specialized agent or assistant, and the reasonableness of
98any compensation paid to that person or to the trustee.
99     (5)  The court may determine reasonable compensation for a
100trustee or any person employed by a trustee without receiving
101expert testimony. Any party may offer expert testimony after
102notice to interested persons. If expert testimony is offered, a
103reasonable expert witness fee may shall be awarded by the court
104and paid from the assets of the trust unless the court finds
105that the expert testimony did not assist the court. The court
106shall direct from which part of the trust assets the fee shall
107be paid.
108     (6)  Persons given notice as provided in this section shall
109be bound by all orders entered on the complaint.
110     (6)(7)  In a proceeding pursuant to subsection (2), the
111petitioner may serve formal notice as provided in the Florida
112Probate Rules, and such notice shall be sufficient for the court
113to acquire jurisdiction over the person receiving the notice to
114the extent of the person's interest in the trust.
115     Section 4.  Paragraph (b) of subsection (2) of section
116736.0505, Florida Statutes, is amended, and subsection (3) is
117added to that section, to read:
118     736.0505  Creditors' claims against settlor.-
119     (2)  For purposes of this section:
120     (b)  Upon the lapse, release, or waiver of the power, the
121holder is treated as the settlor of the trust only to the extent
122the value of the property affected by the lapse, release, or
123waiver exceeds the greater of the amount specified in:
124     1.  Section 2041(b)(2) or s. 2514(e); or
125     2.  Section 2503(b) and, if the donor was married at the
126time of the transfer to which the power of withdrawal applies,
127twice the amount specified in s. 2503(b),
128
129of the Internal Revenue Code of 1986, as amended.
130     (3)  Subject to the provisions of s. 726.105, for purposes
131of this section, the assets in:
132     (a)  A trust described in s. 2523(e) of the Internal
133Revenue Code of 1986, as amended, or a trust for which the
134election described in s. 2523(f) of the Internal Revenue Code of
1351986, as amended, has been made; and
136     (b)  Another trust, to the extent that the assets in the
137other trust are attributable to a trust described in paragraph
138(a),
139
140shall, after the death of the settlor's spouse, be deemed to
141have been contributed by the settlor's spouse and not by the
142settlor.
143     Section 5.  Subsection (5) is added to section 736.05053,
144Florida Statutes, to read:
145     736.05053  Trustee's duty to pay expenses and obligations
146of settlor's estate.-
147     (5)  Nonresiduary trust dispositions shall abate pro rata
148with nonresiduary devises pursuant to the priorities specified
149in this section and s. 733.805, determined as if the
150beneficiaries of the will and trust, other than the estate or
151trust itself, were taking under a common instrument.
152     Section 6.  Subsections (7) through (10) of section
153736.1007, Florida Statutes, are amended to read:
154     736.1007  Trustee's attorney's fees.-
155     (7)  The court may determine reasonable attorney's
156compensation without receiving expert testimony. Any party may
157offer expert testimony after notice to interested persons. If
158expert testimony is offered, an expert witness fee may be
159awarded by the court and paid from the assets of the trust. The
160court shall direct from what part of the trust the fee is to be
161paid.
162     (7)(8)  If a separate written agreement regarding
163compensation exists between the attorney and the settlor, the
164attorney shall furnish a copy to the trustee prior to
165commencement of employment and, if employed, shall promptly file
166and serve a copy on all interested persons. A separate agreement
167or a provision in the trust suggesting or directing the trustee
168to retain a specific attorney does not obligate the trustee to
169employ the attorney or obligate the attorney to accept the
170representation but, if the attorney who is a party to the
171agreement or who drafted the trust is employed, the compensation
172paid shall not exceed the compensation provided in the
173agreement.
174     (9)  Court proceedings to determine compensation, if
175required, are a part of the trust administration process, and
176the costs, including fees for the trustee's attorney, shall be
177determined by the court and paid from the assets of the trust
178unless the court finds the attorney's fees request to be
179substantially unreasonable. The court shall direct from what
180part of the trust the fees are to be paid.
181     (8)(10)  As used in this section, the term "initial trust
182administration" means administration of a revocable trust during
183the period that begins with the death of the settlor and ends on
184the final distribution of trust assets outright or to continuing
185trusts created under the trust agreement but, if an estate tax
186return is required, not until after issuance of an estate tax
187closing letter or other evidence of termination of the estate
188tax proceeding. This initial period is not intended to include
189continued regular administration of the trust.
190     Section 7.  This act shall take effect July 1, 2010.


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