Senate Bill sb1434c1

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    Florida Senate - 2006                           CS for SB 1434

    By the Committee on Banking and Insurance; and Senator Atwater





    597-2360-06

  1                      A bill to be entitled

  2         An act relating to conveyances of land;

  3         creating s. 689.072, F.S.; providing for the

  4         transfer and creation of custodial property in

  5         an individual retirement account or certain

  6         qualified plans; incorporating statutory

  7         provisions into such transfer; providing powers

  8         to the custodian or trustee of such custodial

  9         property; providing protections for persons

10         dealing with the custodian or trustee;

11         exempting certain transfers from specific

12         claims; providing for the disposition of

13         custodian property held in an account, plan or

14         custodianship that is terminated; providing a

15         standard of care for the custodian or trustee;

16         providing for certain declarations to control

17         in specific legal proceedings; providing that

18         the act is inapplicable to a deed, mortgage, or

19         instrument to which s. 689.071, F.S., applies;

20         providing that provisions relating to deeds

21         under statute of uses are not applicable to a

22         transfer by a custodian or trustee under the

23         act; providing for liberal construction;

24         creating s. 694.17, F.S.; providing that

25         conveyances to a custodian or trustee before a

26         specified date are valid notwithstanding the

27         statute of uses; providing an effective date.

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

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    Florida Senate - 2006                           CS for SB 1434
    597-2360-06




 1         Section 1.  Section 689.072, Florida Statutes, is

 2  created to read:

 3         689.072  Real estate interests transferred to or by a

 4  custodian or trustee of an individual retirement account or

 5  qualified plan.--

 6         (1)(a)  A conveyance, deed, mortgage, lease assignment,

 7  or other recorded instrument that transfers an interest in

 8  real property in this state, including a leasehold or

 9  mortgagee interest, to a person who is qualified to act as a

10  custodian or trustee for an individual retirement account

11  under 26 U.S.C. s. 408(a)(2), as amended, in which instrument

12  the transferee is designated "custodian," "as custodian,"

13  "trustee," or "as trustee" and the account owner or

14  beneficiary of the custodianship in the individual retirement

15  account is named, creates custodial property and transfers

16  title to the custodian or trustee when an interest in real

17  property is recorded in the name of the custodian or trustee,

18  followed by the words "as custodian, or trustee, for the

19  benefit of (name of individual retirement account owner or

20  beneficiary) IRA."

21         (b)  This section also applies to a qualified stock

22  bonus, pension, or profit-sharing plan created under 26 U.S.C.

23  s. 401(a), as amended, in which instrument a person is

24  designated "custodian," "as custodian," "trustee," or "as

25  trustee" and the plan, plan participant, or plan beneficiary

26  of the custodianship in the plan also creates custodial

27  property and transfers title to the custodian or trustee when

28  an interest in real property is recorded in the name of the

29  custodian or trustee, followed by the words "as custodian, or

30  trustee, of the (name of plan) for the benefit of (name of

31  plan participant or beneficiary)."

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    Florida Senate - 2006                           CS for SB 1434
    597-2360-06




 1         (2)  A transfer to a custodian or trustee of an

 2  individual retirement account or qualified plan pursuant to

 3  this section incorporates the provisions of this section into

 4  the disposition and grants to the custodian or trustee the

 5  power to protect, conserve, sell, lease, encumber, or

 6  otherwise manage and dispose of the real property described in

 7  the recorded instrument without the joinder of the named

 8  individual retirement account owner, plan participant, or

 9  beneficiary, except as provided in subsection (5).

10         (3)  A person dealing with the custodian or trustee

11  does not have a duty to inquire into the qualifications of the

12  custodian or trustee and may rely on the powers of the

13  custodian or trustee for the custodial property created under

14  this section regardless of whether such powers are specified

15  in the recorded instrument. A grantee, mortgagee, lessee,

16  transferee, assignee, or person obtaining a satisfaction or

17  release or otherwise dealing with the custodian or trustee

18  regarding such custodial property is not required to:

19         (a)  Inquire into the identification or status of any

20  named individual retirement account owner, plan participant,

21  or beneficiary of the individual retirement account or

22  qualified plan or his or her heirs or assigns to whom the

23  custodian or trustee may be accountable under the provisions

24  of the individual retirement account agreement or qualified

25  plan document;

26         (b)  Inquire into the authority of the custodian or

27  trustee to act within and exercise the powers granted under

28  the individual retirement account agreement or qualified plan

29  document;

30         (c)  Inquire into the adequacy or disposition or any

31  consideration provided to the custodian or trustee in

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    Florida Senate - 2006                           CS for SB 1434
    597-2360-06




 1  connection with any interest acquired from such custodian or

 2  trustee; or

 3         (d)  Inquire into any provision of an individual

 4  retirement account agreement or qualified plan document.

 5         (4)  A person dealing with the custodian or trustee

 6  under the recorded instrument takes any interest transferred

 7  by such custodian or trustee, within the authority provided

 8  under this section, free of claims of the named owner, plan

 9  participant, or beneficiary of the individual retirement

10  account or qualified plan or of anyone claiming by, through,

11  or under such owner, plan participant, or beneficiary.

12         (5)  If notice of the revocation or termination of an

13  individual retirement account agreement, qualified plan, or

14  custodianship established under such individual retirement

15  account or qualified plan is recorded, any disposition or

16  encumbrance of the custodian property must be by an instrument

17  executed by the custodian or trustee or the successor and the

18  respective owner, plan participant, or beneficiary of the

19  individual retirement account or qualified plan.

20         (6)  In dealing with custodial property created under

21  this section, a custodian or trustee must observe the standard

22  of care of a prudent person dealing with the property of

23  another person. This section does not relieve the custodian or

24  trustee from liability for breach of the individual retirement

25  account agreement, custodial agreement, or qualified plan

26  document.

27         (7)  A provision of the recorded instrument which

28  defines and declares the interest of the owner, plan

29  participant, or beneficiary of the individual retirement

30  account or qualified plan to be personal property controls

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    Florida Senate - 2006                           CS for SB 1434
    597-2360-06




 1  only if a determination becomes an issue in any legal

 2  proceeding.

 3         (8)  As used in this section, the term "beneficiary"

 4  applies only when the individual account owner or qualified

 5  plan participant is deceased.

 6         (9)(a)  This section does not apply to any deed,

 7  mortgage, or instrument to which s. 689.071 applies.

 8         (b)  Section 689.09 does not apply to transfers of real

 9  property interests to a custodian or trustee under this

10  section.

11         (10)  This section is remedial and shall be liberally

12  construed to effectively carry out its purposes.

13         Section 2.  Section 694.17, Florida Statutes, is

14  created to read:

15         694.17  Validation of conveyances to custodian or

16  trustee of an individual retirement account or qualified

17  plan.--A conveyance, deed, mortgage, lease assignment, or

18  other recorded instrument transferring an interest in real

19  property in this state to a custodian or trustee which was

20  recorded before July 1, 2006, but which would be within the

21  scope of s. 689.072 if recorded after that date, is ratified,

22  confirmed, and validated in all respects, and shall be deemed

23  to have vested such interest in the custodian or trustee

24  without reversion or impairment as if such instrument had been

25  recorded after July 1, 2006, and s. 689.09 does not apply to

26  any such instrument regardless of when recorded.

27         Section 3.  This act shall take effect July 1, 2006.

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    Florida Senate - 2006                           CS for SB 1434
    597-2360-06




 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1434

 3                                 

 4  1.   The committee substitute provides for retroactivity in
         applying the provisions of the bill to transfers
 5       involving existing Individual Retirement Accounts (IRA)
         or qualifying plans, which were recorded before July 1,
 6       2006, the effective date of the bill.

 7  2.   The bill also clarifies that the provisions relating to
         the real estate interests transferred to or by a
 8       custodian or trustee of an IRA or qualified plan do not
         apply to any deed, mortgage, or instrument to which
 9       provisions relating to land transfer under s. 689.071,
         F.S.
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