Senate Bill 2068

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    Florida Senate - 1999                                  SB 2068

    By Senator Grant





    13-801B-99

  1                      A bill to be entitled

  2         An act relating to trusts and trust powers;

  3         amending s. 689.225, F.S.; providing additional

  4         exclusions from the statutory rule against

  5         perpetuities; providing legislative intent with

  6         respect to exclusiveness of statutory rule;

  7         amending s. 737.306, F.S.; revising standards

  8         governing when a successor trustee is not under

  9         a duty to institute an action against a prior

10         trustee or the prior trustee's estate; creating

11         s. 737.2035, F.S.; providing for costs and

12         attorney's fees in trust proceedings; providing

13         applicability; amending s. 660.41, F.S.;

14         excluding certain banks or associations and

15         trust companies from a prohibition against

16         exercising certain powers and duties and acting

17         within certain capacities in this state;

18         providing effective dates.

19

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

21

22         Section 1.  Effective July 1, 2000, subsection (5) of

23  section 689.225, Florida Statutes, is amended to read:

24         689.225  Statutory rule against perpetuities.--

25         (5)  EXCLUSIONS FROM STATUTORY RULE AGAINST

26  PERPETUITIES.--Subsection (2) does not apply to:

27         (a)  A nonvested property interest or a power of

28  appointment arising out of a nondonative transfer, except a

29  nonvested property interest or a power of appointment arising

30  out of:

31         1.  A premarital or postmarital agreement;

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    Florida Senate - 1999                                  SB 2068
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  1         2.  A separation or divorce settlement;

  2         3.  A spouse's election;

  3         4.  A similar arrangement arising out of a prospective,

  4  existing, or previous marital relationship between the

  5  parties;

  6         5.  A contract to make or not to revoke a will or

  7  trust;

  8         6.  A contract to exercise or not to exercise a power

  9  of appointment;

10         7.  A transfer in satisfaction of a duty of support; or

11         8.  A reciprocal transfer;

12         (b)  A fiduciary's power relating to the administration

13  or management of assets, including the power of a fiduciary to

14  sell, lease, or mortgage property, and the power of a

15  fiduciary to determine principal and income;

16         (c)  A power to appoint a fiduciary;

17         (d)  A discretionary power of a trustee to distribute

18  principal before termination of a trust to a beneficiary

19  having an indefeasibly vested interest in the income and

20  principal;

21         (e)  A nonvested property interest held by a charity,

22  government, or governmental agency or subdivision, if the

23  nonvested property interest is preceded by an interest held by

24  another charity, government, or governmental agency or

25  subdivision;

26         (f)  A nonvested property interest in, or a power of

27  appointment with respect to, a trust or other property

28  arrangement forming part of a pension, profit-sharing, stock

29  bonus, health, disability, death benefit, income deferral, or

30  other current or deferred benefit plan for one or more

31  employees, independent contractors, or their beneficiaries or

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  1  spouses, to which contributions are made for the purpose of

  2  distributing to or for the benefit of the participants, or

  3  their beneficiaries or spouses, the property, income, or

  4  principal in the trust or other property arrangement, except a

  5  nonvested property interest or a power of appointment that is

  6  created by an election of a participant or a beneficiary or

  7  spouse; or

  8         (g)  A property interest, power of appointment, or

  9  arrangement that was not subject to the common-law rule

10  against perpetuities or is excluded by another statute of this

11  state; or.

12         (h)  A nonvested property interest or a power of

13  appointment when the grantor or creator of such interest or

14  power expresses his or her intention in the written instrument

15  creating such interest or power that the provisions of this

16  section not apply. An election under this paragraph shall be

17  made by a statement in the written instrument that identifies

18  the interest or interests to which the election applies,

19  coupled with an expression of the grantor's or creator's

20  intention that the rule against perpetuities not apply to the

21  interest or interests identified. An election shall not be

22  deemed to have been made by implication merely because

23  provisions of the written instrument violate this section.

24

25  This section is the sole expression of any rule against

26  perpetuities, remoteness in vesting, or restraint upon the

27  power of alienation or accumulations in this state. No

28  common-law rule against perpetuities, remoteness in vesting,

29  or restraint upon the power of alienation or accumulations

30  shall exist with respect to interests or powers that are

31  either governed by or excluded from this section.

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  1         Section 2.  Subsection (3) of section 737.306, Florida

  2  Statutes, is amended, and subsection (5) is added to that

  3  section, to read:

  4         737.306  Personal liability of trustee.--

  5         (3)  A successor trustee succeeding a trustee who was

  6  also the grantor of the trust is not personally liable for any

  7  action taken or omitted to be taken by any such prior trustee;

  8  nor does any such successor trustee have a duty to institute

  9  any action against any such prior trustee, or file any claim

10  against any such prior trustee's estate, for any of the prior

11  trustee's acts or omissions as trustee under any of the

12  following circumstances:.  This subsection applies only with

13  respect to a trust that is revocable during the time that the

14  grantor serves as trustee.

15         (a)  The successor trustee succeeds a trustee who was

16  also the grantor of a trust that was revocable during the time

17  that the grantor served as trustee;

18         (b)  As to any beneficiary who has waived any

19  accounting required by s. 737.303, but only as to the periods

20  before or included in such waiver;

21         (c)  As to any beneficiary who has released the

22  successor trustee from such duty to institute any action or

23  file any claim;

24         (d)  As to any person who is not a beneficiary within

25  the meaning of s. 737.303(4)(b); or

26         (e)  As to any beneficiary described in s.

27  737.303(4)(b):

28         1.  If a super majority of the reasonably ascertainable

29  current income or principal beneficiaries described in s.

30  737.303(4)(b)1. and a super majority of the reasonably

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  1  ascertainable remainder beneficiaries described in s.

  2  737.303(4)(b)2. have released the successor trustee;

  3         2.  If the beneficiary has not delivered a written

  4  request to the successor trustee to institute an action or

  5  file a claim against the prior trustee within 6 months after

  6  the date of the successor trustee's acceptance of the trust,

  7  if the successor trustee has notified the beneficiary in

  8  writing of its acceptance in accordance with s. 737.303(1) and

  9  such writing advises the beneficiary that, unless the

10  beneficiary delivers such written request within 6 months

11  after the date of acceptance, his or her right to proceed

12  against the successor trustee will be barred pursuant to this

13  section; or

14         3.  For any action or claim that the beneficiary is

15  barred from bringing against the prior trustee.

16         (5)  For the purposes of this section, a super majority

17  of beneficiaries means at least two-thirds in interest of the

18  beneficiaries if the interests of the beneficiaries are

19  reasonably ascertainable; otherwise it means at least

20  two-thirds in number of the beneficiaries. A release or waiver

21  under this section may be exercised by a legal representative

22  or natural guardian of the beneficiary without the filing of

23  any proceeding or approval of any court. Nothing in subsection

24  (3) affects any liability of the prior trustee or the right of

25  the successor trustee or any beneficiary to pursue an action

26  or claim against the prior trustee.

27         Section 3.  Section 737.2035, Florida Statutes, is

28  created to read:

29         737.2035  Costs and attorney's fees in trust

30  proceedings.--

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  1         (1)  In all trust proceedings, costs may be awarded as

  2  in chancery actions.

  3         (2)  Any attorney who has rendered services to a trust

  4  may apply to the court for an order awarding attorney's fees,

  5  and, after notice and service upon the trustee and all

  6  beneficiaries entitled to an accounting under s. 737.303, the

  7  court shall enter its order on the fee application.

  8         (3)  When costs and attorney's fees are to be paid out

  9  of the trust, the court may in its discretion direct from what

10  part of the trust they shall be paid.

11         Section 4.  Section 3 applies only to the services of

12  an attorney which are rendered on or after July 1, 1999.

13         Section 5.  Effective September 1, 1999, section

14  660.41, Florida Statutes, is amended to read:

15         660.41  Corporations; certain fiduciary functions

16  prohibited.--All corporations, except banks or associations

17  and trust companies incorporated under the laws of this state

18  and having trust powers and except national banking

19  associations or federal associations located in this state and

20  having trust powers, are prohibited from exercising any of the

21  powers or duties and from acting in any of the capacities,

22  within this state, as follows:

23         (1)  As personal representative of the estate of any

24  decedent, whether such decedent was a resident of this state

25  or not, and whether the administration of the estate of such

26  decedent is original or ancillary; however, if the personal

27  representative of the estate of a nonresident decedent is a

28  corporation duly authorized, qualified, and acting as such

29  personal representative in the jurisdiction of the domicile of

30  the decedent, it may as a foreign personal representative

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  1  perform such duties and exercise such powers and privileges as

  2  are required, authorized, or permitted by s. 734.101.

  3         (2)  As receiver or trustee under appointment of any

  4  court in this state.

  5         (3)  As assignee, receiver, or trustee of any insolvent

  6  person or corporation or under any assignment for the benefit

  7  of creditors.

  8         (4)  As fiscal agent, transfer agent, or registrar of

  9  any municipal or private corporation, except that this

10  prohibition shall not be so construed as to prevent banks,

11  associations, and trust companies not located in this state

12  from acting within the state where located as fiscal agent,

13  transfer agent, or registrar of municipal or private

14  corporations of this state.  Nothing herein shall prevent any

15  Florida corporation that is not a bank, association, or trust

16  company and that does not have trust powers from being its own

17  fiscal agent, transfer agent, or registrar concerning its own

18  affairs, stock, or securities.  Nothing herein shall prevent

19  any Florida corporation or corporation having its principal

20  place of business in Florida registered as a transfer agent

21  with the Federal Deposit Insurance Corporation, the

22  Comptroller of the Currency, the Board of Governors of the

23  Federal Reserve System, or the Securities and Exchange

24  Commission from acting as a transfer agent for any other

25  private corporation. Nothing in this section or in any other

26  law of this state shall be construed to prohibit a foreign

27  bank, foreign association, or foreign trust company as trustee

28  of any charitable foundation or endowment, employees' pension,

29  retirement or profit-sharing trust, alone or together with a

30  cotrustee, from:  making loans or committing to make loans to

31  any other person; contracting, in this state or elsewhere,

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  1  with any person to acquire from such person a part or the

  2  entire interest in a loan which such person proposes to make,

  3  has heretofore made, or hereafter makes, together with a like

  4  interest in any security instrument covering real or personal

  5  property in the state proposed to be given or hereafter or

  6  heretofore given to such person to secure or evidence such

  7  loan; servicing directly or entering into servicing contracts

  8  with persons, and enforcing in this state the loans made by it

  9  or obligations heretofore or hereafter acquired by it in the

10  transaction of business outside this state or in the

11  transaction of any business authorized or permitted hereby; or

12  acquiring, holding, leasing, mortgaging, contracting with

13  respect to, or otherwise protecting, managing, or conveying

14  property in this state which has heretofore or may hereafter

15  be assigned, transferred, mortgaged, or conveyed to it as

16  security for, or in whole or in part in satisfaction of, a

17  loan or loans made by it or obligations acquired by it in the

18  transaction of any business authorized or permitted hereby.

19  However, no such foreign bank, foreign association, or foreign

20  trust company shall be deemed to be transacting business in

21  this state, shall be required to qualify so to do, or shall be

22  deemed to be unlawfully exercising powers or duties, acting in

23  an unlawful or prohibited capacity, or violating any of the

24  provisions of this section or of any other law of this state

25  solely by reason of the performance of any of the acts or

26  business hereinbefore permitted or authorized hereby; further,

27  nothing herein shall be construed as authorizing or permitting

28  any foreign bank, association, or trust company to maintain an

29  office within this state.

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  1  This section does not apply to banks or associations and trust

  2  companies incorporated under the laws of this state and having

  3  trust powers, banks or associations and trust companies

  4  resulting from an interstate merger transaction with a Florida

  5  bank pursuant to s. 658.2953 and having trust powers, or

  6  national banking associations or federal associations located

  7  in this state and having trust powers.

  8         Section 6.  This act shall take effect July 1, 1999.

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11                          SENATE SUMMARY

12    Excludes certain instruments from the statutory rule
      against perpetuities when the maker expressly declares
13    his or her intent that it not do so. Provides that the
      statutory rule against perpetuities is the sole
14    expression of any rule against perpetuities, remoteness
      in vesting, or restraint upon the power of alienation or
15    accumulations. Provides circumstances under which a
      successor trustee is not under a duty to institute an
16    action against a prior trustee or the prior trustee's
      estate. Authorizes the award of costs and attorney's fees
17    in trust proceedings. Excludes banks or associations and
      trust companies resulting from an interstate merger
18    transaction with a Florida bank under Florida law and
      having trust powers from a prohibition against
19    corporations conducting trust business in Florida. (See
      bill for details.)
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