The Florida Senate

737.2041  Trustee's attorney's fees.--

(1)  If the trustee of a trust described in s. 733.707(3) retains an attorney to render legal services in connection with the initial administration of the trust, the attorney is entitled to reasonable compensation for those legal services, payable from the assets of the trust without court order. If the trustee of a trust described in s. 733.707(3) retains an attorney to render legal services in connection with the initial administration of a trust, the trustee and the attorney may agree to compensation that is determined in a manner or amount other than the manner or amount provided in this section. The agreement is not binding upon a person who bears the impact of the compensation unless that person is a party to or otherwise consents to be bound by the agreement. The agreement may provide that the trustee is not individually liable for the attorney's fees and costs.

(2)  Unless otherwise agreed, compensation based upon the value of the trust assets immediately following the settlor's death and the income earned by the trust during initial administration at the rate of 75 percent of the schedule provided in s. 733.6171(3)(a)-(h) is presumed to be reasonable total compensation for ordinary services of all attorneys employed generally to advise trustees concerning their duties in initial trust administration.

(3)  An attorney who is retained to render only limited and specifically defined legal services shall be compensated as provided in the retaining agreement. If the amount or method of determining compensation is not provided in the agreement, the attorney is entitled to a reasonable fee, taking into account the factors set forth in subsection (6).

(4)  Ordinary services of the attorney in an initial trust administration include legal advice and representation concerning the trustee's duties relating to:

(a)  Review of the trust instrument and each amendment for legal sufficiency and interpretation.

(b)  Implementation of substitution of the successor trustee.

(c)  Persons who must or should be served with required notices and the method and timing of such service.

(d)  The obligation of a successor to require a former trustee to account.

(e)  The trustee's duty to protect, insure, and manage trust assets and the trustee's liability relating to these duties.

(f)  The trustee's duty regarding investments imposed by the prudent investor rule.

(g)  Contributions due to the personal representative of settlor's estate for payment of administrative expenses or creditor claims and estate taxes.

(h)  The trustee's obligation to inform and account to beneficiaries and the method of satisfaction of these obligations; the liability of the trust and trustee to the settlor's creditors; the advisability or necessity for probate proceedings to bar creditors; and the contribution requirements to the settlor's probate estate.

(i)  Identifying tax returns required to be filed by the trustee, the trustee's liability for payment of taxes, and the due date of returns.

(j)  Obtaining nontaxable certificate and receipt, if not done by a personal representative.

(k)  Order of payment of expenses of administration of the trust and order and priority of abatement of bequests and legacies in the trust.

(l)  Distribution of income or principal to beneficiaries or funding of further trusts provided in the governing instrument.

(m)  Preparation of any legal documents required to effect distribution.

(n)  Fiduciary duties, avoidance of self-dealing, conflicts of interest, duty of impartiality, and obligations to beneficiaries.

(o)  If there is a conflict of interest between a trustee who is a beneficiary and other beneficiaries of the trust, advice to the trustee on limitations of certain authority of the trustee regarding discretionary distributions or exercise of certain powers and alternatives for appointment of an independent trustee and appropriate procedures.

(p)  Procedures for trustee's discharge from liability for administration of trust upon termination or resignation.

(5)  In addition to the attorney's fees for ordinary services, the attorney for the trustee shall be allowed further reasonable compensation for any extraordinary service. What is an extraordinary service may vary depending on many factors, including the size of the trust. Extraordinary services may include, but are not limited to:

(a)  Involvement in a trust contest, trust construction, a proceeding for determination of beneficiaries, a contested claim, elective share proceedings, apportionment of estate taxes, or other adversary proceedings or litigation by or against the trust.

(b)  Representation of the trustee in audit or any proceeding for adjustment, determination, or collection of any taxes.

(c)  Tax advice on postmortem tax planning, including, but not limited to, disclaimer, renunciation of fiduciary commission, alternate valuation date, allocation of administrative expenses between tax returns, the QTIP or reverse QTIP election, allocation of GST exemption, qualification for Internal Revenue Code ss. 303 and 6166 privileges, deduction of last illness expenses, distribution planning, asset basis considerations, throwback rules, handling income or deductions in respect of a decedent, valuation discounts, special use and other valuation, handling employee benefit or retirement proceeds, prompt assessment request, or request for release of personal liability for payment of tax.

(d)  Review of estate tax return and preparation or review of other tax returns required to be filed by the trustee.

(e)  Preparation of decedent's federal estate tax return. If this return is prepared by the attorney, a fee of one-half of 1 percent up to a value of $10 million and one-fourth of 1 percent on the value in excess of $10 million, of the gross estate as finally determined for federal estate tax purposes, is presumed to be reasonable compensation for the attorney for this service. These fees shall include services for routine audit of the return, not beyond the examining agent level, if required.

(f)  Purchase, sale, lease, or encumbrance of real property by the trustee or involvement in zoning, land use, environmental, or other similar matters.

(g)  Legal advice regarding carrying on of decedent's business or conducting other commercial activity by the trustee.

(h)  Legal advice regarding claims for damage to the environment or related procedures.

(i)  Legal advice regarding homestead status of trust real property or proceedings involving the status.

(j)  Involvement in fiduciary, employee, or attorney compensation disputes.

(k)  Considerations of special valuation of trust assets, including discounts for blockage, minority interests, lack of marketability, and environmental liability.

(6)  Upon petition of any interested person in a proceeding to review the compensation paid or to be paid to the attorney for the trustee, the court may increase or decrease the compensation for ordinary services of the attorney for the trustee or award compensation for extraordinary services if the facts and circumstances of the particular administration warrant. In determining reasonable compensation, the court shall consider all of the following factors giving such weight to each as it may determine to be appropriate:

(a)  The promptness, efficiency, and skill with which the initial administration was handled by the attorney.

(b)  The responsibilities assumed by, and potential liabilities of, the attorney.

(c)  The nature and value of the assets that are affected by the decedent's death.

(d)  The benefits or detriments resulting to the trust or its beneficiaries from the attorney's services.

(e)  The complexity or simplicity of the administration and the novelty of issues presented.

(f)  The attorney's participation in tax planning for the estate, the trust, and the trust's beneficiaries and tax return preparation or review and approval.

(g)  The nature of the trust assets, the expenses of administration, and the claims payable by the trust and the compensation paid to other professionals and fiduciaries.

(h)  Any delay in payment of the compensation after the services were furnished.

(i)  Any other relevant factors.

(7)  The court may determine reasonable attorney's compensation without receiving expert testimony. Any party may offer expert testimony after notice to interested persons. If expert testimony is offered, an expert witness fee may be awarded by the court and paid from the assets of the trust. The court may, in its discretion, direct from what part of the trust it shall be paid.

(8)  If a separate written agreement regarding compensation exists between the attorney and the settlor, the attorney shall furnish a copy to the trustee prior to commencement of employment and, if employed, shall promptly file and serve a copy on all interested persons. Neither a separate agreement nor a provision in the trust suggesting or directing the trustee to retain a specific attorney will obligate the trustee to employ the attorney or obligate the attorney to accept the representation, but if the attorney who is a party to the agreement or who drafted the trust is employed, the compensation paid shall not exceed the compensation provided in the agreement.

(9)  Court proceedings to determine compensation, if required, are a part of the trust administration process, and the costs, including fees for the trustee's attorney, shall be determined by the court and paid from the assets of the trust unless the court finds the attorney's fees request to be substantially unreasonable. The court shall direct from which part of the trust they shall be paid.

(10)  "Initial trust administration" as used in this section means administration of a trust described in s. 733.707(3) during the period which begins with the death of the settlor and ends upon the final distribution of trust assets outright or to continuing trusts created under the trust agreement, but if an estate tax return is required, not until after issuance of an estate tax closing letter or other evidence of termination of the estate tax proceeding. This initial period is not intended to include continued regular administration of the trust.

(11)  This section shall apply to trusts of settlors who die on or after July 1, 1995.

History.--s. 4, ch. 95-401; s. 5, ch. 97-240.