Florida Senate - 2016 CS for CS for CS for SB 540
By the Committees on Rules; Banking and Insurance; and
Judiciary; and Senator Hukill
595-02130-16 2016540c3
1 A bill to be entitled
2 An act relating to estates; creating s. 731.1055,
3 F.S.; providing that the validity and the effect of a
4 specified disposition of real property be determined
5 by Florida law; amending s. 731.106, F.S.; conforming
6 provisions to changes made by the act; amending s.
7 736.0802, F.S.; defining the term “pleading”;
8 authorizing a trustee to pay attorney fees and costs
9 from the assets of the trust without specified
10 approval or court authorization in certain
11 circumstances; requiring the trustee to serve a
12 written notice of intent upon each qualified
13 beneficiary of the trust before the payment is made;
14 requiring the notice of intent to contain specified
15 information and to be served in a specified manner;
16 providing that specified qualified beneficiaries may
17 be entitled to an order compelling the refund of a
18 specified payment to the trust; requiring the court to
19 award specified attorney fees and costs in certain
20 circumstances; authorizing the court to prohibit a
21 trustee from using trust assets to make a specified
22 payment; authorizing the court to enter an order
23 compelling the return of specified attorney fees and
24 costs to the trust with interest at the statutory
25 rate; requiring the court to deny a specified motion
26 unless the court finds a reasonable basis to conclude
27 that there has been a breach of the trust; authorizing
28 a court to deny the motion if it finds good cause to
29 do so; authorizing the movant to show that a
30 reasonable basis exists, and a trustee to rebut the
31 showing, through specified means; authorizing the
32 court to impose such remedies or sanctions as it deems
33 appropriate; providing that a trustee is authorized to
34 use trust assets in a specified manner if a claim or
35 defense of breach of trust is withdrawn, dismissed, or
36 judicially resolved in a trial court without a
37 determination that the trustee has committed a breach
38 of trust; providing that specified proceedings,
39 remedies, and rights are not limited; amending ss.
40 736.0816 and 736.1007, F.S.; conforming provisions to
41 changes made by the act; providing an effective date.
42
43 Be It Enacted by the Legislature of the State of Florida:
44
45 Section 1. Section 731.1055, Florida Statutes, is created
46 to read:
47 731.1055 Disposition of real property.—The validity and
48 effect of a disposition, whether intestate or testate, of real
49 property in this state shall be determined by Florida law.
50 Section 2. Subsection (2) of section 731.106, Florida
51 Statutes, is amended to read:
52 731.106 Assets of nondomiciliaries.—
53 (2) When a nonresident decedent, whether or not a citizen
54 of the United States, provides by will that the testamentary
55 disposition of tangible or intangible personal property having a
56 situs within this state, or of real property in this state,
57 shall be construed and regulated by the laws of this state, the
58 validity and effect of the dispositions shall be determined by
59 Florida law. The court may, and in the case of a decedent who
60 was at the time of death a resident of a foreign country the
61 court shall, direct the personal representative appointed in
62 this state to make distribution directly to those designated by
63 the decedent’s will as beneficiaries of the tangible or
64 intangible property or to the persons entitled to receive the
65 decedent’s personal estate under the laws of the decedent’s
66 domicile.
67 Section 3. Subsection (10) of section 736.0802, Florida
68 Statutes, is amended to read:
69 736.0802 Duty of loyalty.—
70 (10) Unless otherwise provided in this subsection, payment
71 of costs or attorney attorney’s fees incurred in any proceeding
72 from the assets of the trust may be made by a the trustee from
73 assets of the trust without the approval of any person and
74 without court authorization, unless the court orders otherwise
75 as provided in ss. 736.0816(20) and 736.1007(1) paragraph (b).
76 (a) As used in this subsection, the term “pleading” means a
77 pleading as defined in Rule 1.100 of the Florida Rules of Civil
78 Procedure.
79 (b) If a trustee incurs attorney fees or costs in
80 connection with a claim or defense of breach of trust which is
81 made in a filed pleading, the trustee may pay such attorney fees
82 or costs from trust assets without the approval of any person
83 and without any court authorization. However, the trustee must
84 serve a written notice of intent upon each qualified beneficiary
85 of the trust whose share of the trust may be affected by the
86 payment before such payment is made. The notice of intent does
87 not need to be served upon a qualified beneficiary whose
88 identity or location is unknown to, and not reasonably
89 ascertainable by, the trustee.
90 (c) The notice of intent must identify the judicial
91 proceeding in which the claim or defense of breach of trust has
92 been made in a filed pleading and must inform the person served
93 of his or her right under paragraph (e) to apply to the court
94 for an order prohibiting the trustee from using trust assets to
95 pay attorney fees or costs as provided in paragraph (b) or
96 compelling the return of such attorney fees and costs to the
97 trust. The notice of intent must be served by any commercial
98 delivery service or form of mail requiring a signed receipt; the
99 manner provided in the Florida Rules of Civil Procedure for
100 service of process; or, as to any party over whom the court has
101 already acquired jurisdiction in that judicial proceeding, in
102 the manner provided for service of pleadings and other documents
103 by the Florida Rules of Civil Procedure.
104 (d) If a trustee has used trust assets to pay attorney fees
105 or costs described in paragraph (b) before service of a notice
106 of intent, any qualified beneficiary who is not barred under s.
107 736.1008 and whose share of the trust may have been affected by
108 such payment is entitled, upon the filing of a motion to compel
109 the return of such payment to the trust, to an order compelling
110 the return of such payment, with interest at the statutory rate.
111 The court shall award attorney fees and costs incurred in
112 connection with the motion to compel as provided in s. 736.1004.
113 (e) Upon the motion of any qualified beneficiary who is not
114 barred under s. 736.1008 and whose share of the trust may be
115 affected by the use of trust assets to pay attorney fees or
116 costs as provided in paragraph (b), the court may prohibit the
117 trustee from using trust assets to make such payment and, if
118 such payment has been made from trust assets after service of a
119 notice of intent, the court may enter an order compelling the
120 return of the attorney fees and costs to the trust, with
121 interest at the statutory rate. In connection with any hearing
122 on a motion brought under this paragraph:
123 1. The court shall deny the motion unless it finds a
124 reasonable basis to conclude that there has been a breach of
125 trust. If the court finds there is a reasonable basis to
126 conclude there has been a breach of trust, the court may still
127 deny the motion if it finds good cause to do so.
128 2. The movant may show that such reasonable basis exists,
129 and the trustee may rebut any such showing by presenting
130 affidavits, answers to interrogatories, admissions, depositions,
131 and any evidence otherwise admissible under the Florida Evidence
132 Code.
133 (f) If a trustee fails to comply with an order of the court
134 prohibiting the use of trust assets to pay attorney fees or
135 costs described in paragraph (b) or fails to comply with an
136 order compelling that such payment be refunded to the trust, the
137 court may impose such remedies or sanctions as the court deems
138 appropriate, including, without limitation, striking the
139 defenses or pleadings filed by the trustee.
140 (g) Notwithstanding the entry of an order prohibiting the
141 use of trust assets to pay attorney fees and costs as provided
142 in paragraph (b), or compelling the return of such attorney fees
143 or costs, if a claim or defense of breach of trust is withdrawn,
144 dismissed, or judicially resolved in the trial court without a
145 determination that the trustee has committed a breach of trust,
146 the trustee is authorized to use trust assets to pay attorney
147 fees and costs as provided in paragraph (b) and may do so
148 without service of a notice of intent or order of the court. The
149 attorney fees and costs may include fees and costs that were
150 refunded to the trust pursuant to an order of the court.
151 (h) This subsection does not limit proceedings under s.
152 736.0206 or remedies for breach of trust under s. 736.1001, or
153 the right of any interested person to challenge or object to the
154 payment of compensation or costs from the trust.
155 (a) If a claim or defense based upon a breach of trust is
156 made against a trustee in a proceeding, the trustee shall
157 provide written notice to each qualified beneficiary of the
158 trust whose share of the trust may be affected by the payment of
159 attorney’s fees and costs of the intention to pay costs or
160 attorney’s fees incurred in the proceeding from the trust prior
161 to making payment. The written notice shall be delivered by
162 sending a copy by any commercial delivery service requiring a
163 signed receipt, by any form of mail requiring a signed receipt,
164 or as provided in the Florida Rules of Civil Procedure for
165 service of process. The written notice shall inform each
166 qualified beneficiary of the trust whose share of the trust may
167 be affected by the payment of attorney’s fees and costs of the
168 right to apply to the court for an order prohibiting the trustee
169 from paying attorney’s fees or costs from trust assets. If a
170 trustee is served with a motion for an order prohibiting the
171 trustee from paying attorney’s fees or costs in the proceeding
172 and the trustee pays attorney’s fees or costs before an order is
173 entered on the motion, the trustee and the trustee’s attorneys
174 who have been paid attorney’s fees or costs from trust assets to
175 defend against the claim or defense are subject to the remedies
176 in paragraphs (b) and (c).
177 (b) If a claim or defense based upon breach of trust is
178 made against a trustee in a proceeding, a party must obtain a
179 court order to prohibit the trustee from paying costs or
180 attorney’s fees from trust assets. To obtain an order
181 prohibiting payment of costs or attorney’s fees from trust
182 assets, a party must make a reasonable showing by evidence in
183 the record or by proffering evidence that provides a reasonable
184 basis for a court to conclude that there has been a breach of
185 trust. The trustee may proffer evidence to rebut the evidence
186 submitted by a party. The court in its discretion may defer
187 ruling on the motion, pending discovery to be taken by the
188 parties. If the court finds that there is a reasonable basis to
189 conclude that there has been a breach of trust, unless the court
190 finds good cause, the court shall enter an order prohibiting the
191 payment of further attorney’s fees and costs from the assets of
192 the trust and shall order attorney’s fees or costs previously
193 paid from assets of the trust to be refunded. An order entered
194 under this paragraph shall not limit a trustee’s right to seek
195 an order permitting the payment of some or all of the attorney’s
196 fees or costs incurred in the proceeding from trust assets,
197 including any fees required to be refunded, after the claim or
198 defense is finally determined by the court. If a claim or
199 defense based upon a breach of trust is withdrawn, dismissed, or
200 resolved without a determination by the court that the trustee
201 committed a breach of trust after the entry of an order
202 prohibiting payment of attorney’s fees and costs pursuant to
203 this paragraph, the trustee may pay costs or attorney’s fees
204 incurred in the proceeding from the assets of the trust without
205 further court authorization.
206 (c) If the court orders a refund under paragraph (b), the
207 court may enter such sanctions as are appropriate if a refund is
208 not made as directed by the court, including, but not limited
209 to, striking defenses or pleadings filed by the trustee. Nothing
210 in this subsection limits other remedies and sanctions the court
211 may employ for the failure to refund timely.
212 (d) Nothing in this subsection limits the power of the
213 court to review fees and costs or the right of any interested
214 persons to challenge fees and costs after payment, after an
215 accounting, or after conclusion of the litigation.
216 (e) Notice under paragraph (a) is not required if the
217 action or defense is later withdrawn or dismissed by the party
218 that is alleging a breach of trust or resolved without a
219 determination by the court that the trustee has committed a
220 breach of trust.
221 Section 4. Subsection (20) of section 736.0816, Florida
222 Statutes, is amended to read:
223 736.0816 Specific powers of trustee.—Except as limited or
224 restricted by this code, a trustee may:
225 (20) Employ persons, including, but not limited to,
226 attorneys, accountants, investment advisers, or agents, even if
227 they are the trustee, an affiliate of the trustee, or otherwise
228 associated with the trustee, to advise or assist the trustee in
229 the exercise of any of the trustee’s powers and pay reasonable
230 compensation and costs incurred in connection with such
231 employment from the assets of the trust, subject to s.
232 736.0802(10) with respect to attorney fees and costs, and act
233 without independent investigation on the recommendations of such
234 persons.
235 Section 5. Subsection (1) of section 736.1007, Florida
236 Statutes, is amended to read:
237 736.1007 Trustee’s attorney’s fees.—
238 (1) If the trustee of a revocable trust retains an attorney
239 to render legal services in connection with the initial
240 administration of the trust, the attorney is entitled to
241 reasonable compensation for those legal services, payable from
242 the assets of the trust, subject to s. 736.0802(10), without
243 court order. The trustee and the attorney may agree to
244 compensation that is determined in a manner or amount other than
245 the manner or amount provided in this section. The agreement is
246 not binding on a person who bears the impact of the compensation
247 unless that person is a party to or otherwise consents to be
248 bound by the agreement. The agreement may provide that the
249 trustee is not individually liable for the attorney attorney’s
250 fees and costs.
251 Section 6. This act shall take effect July 1, 2016.