HB 0667

CS

CHAMBER ACTION

1	The Economic Development, Trade & Banking Committee recommends
2	the following:
3
4	Council/Committee Substitute
5	Remove the entire bill and insert:
6	A bill to be entitled
7	An act relating to assets held in benefit plans; amending
8	s. 222.21, F.S.; exempting certain tax-exempt funds or
9	accounts from legal process in favor of creditors under
10	certain circumstances; providing requirements, criteria,
11	and limitations; providing application; amending s.
12	222.22, F.S.; exempting from legal process in favor of
13	creditors or other claimants assets held in qualified
14	tuition programs, in certain health savings accounts and
15	medical savings accounts, in Coverdell education savings
16	accounts, or in hurricane savings accounts; providing a
17	definition; amending s. 710.102, F.S.; redefining the term
18	"benefit plan" and defining the term "qualified minor's
19	trust" as used in the Florida Uniform Transfers to Minors
20	Act; amending s. 710.104, F.S.; including benefit plans in
21	the types of property that a custodian may be named to
22	receive on behalf of a minor; amending s. 710.108, F.S.;
23	allowing a benefit plan to be transferred to a custodian
24	of a minor who does not have a conservator by an obligor
25	of the minor; raising a threshold above which certain
26	obligor transfers are prohibited; amending s. 710.116,
27	F.S.; allowing a minor's custodian, without court order,
28	to transfer custodial property to a qualified minor's
29	trust; providing implications of the transfer; amending s.
30	733.808, F.S.; providing for the disposition of benefits
31	under a benefit plan after the death of an owner of or
32	participant in the plan; amending s. 744.301, F.S.;
33	providing for the parents or natural guardians of a minor
34	child to collect, receive, manage, and dispose of and make
35	elections regarding the proceeds of an annuity contract
36	payable to a minor child or of a benefit plan of which the
37	minor is a beneficiary, participant, or owner, without
38	appointment, authority, or bond, if the proceeds equal
39	less than a specified maximum amount; providing an
40	effective date.
41
42	Be It Enacted by the Legislature of the State of Florida:
43
44	Section 1.  Section 222.21, Florida Statutes, is amended to
45	read:
46	222.21  Exemption of pension money and certain tax-exempt
47	funds or accounts retirement or profit-sharing benefits from
48	legal processes.--
49	(1)  Money received by any debtor as pensioner of the
50	United States within 3 months next preceding the issuing of an
51	execution, attachment, or garnishment process may not be applied
52	to the payment of the debts of the pensioner when it is made to
53	appear by the affidavit of the debtor or otherwise that the
54	pension money is necessary for the maintenance of the debtor's
55	support or a family supported wholly or in part by the pension
56	money. The filing of the affidavit by the debtor, or the making
57	of such proof by the debtor, is prima facie evidence; and it is
58	the duty of the court in which the proceeding is pending to
59	release all pension moneys held by such attachment or
60	garnishment process, immediately, upon the filing of such
61	affidavit or the making of such proof.
62	(2)(a)  Except as provided in paragraph (d)(b), any money
63	or other assets payable to an owner, a participant, or a
64	beneficiary from, or any interest of any owner, participant, or
65	beneficiary in, a fund or account retirement or profit-sharing
66	plan that is qualified under s. 401(a), s. 403(a), s. 403(b), s.
67	408, s. 408A, or s. 409 of the Internal Revenue Code of 1986, as
68	amended, is exempt from all claims of creditors of the owner,
69	beneficiary, or participant if the fund or account is:
70	1.  Maintained in accordance with a master plan, volume
71	submitter plan, prototype plan, or any other plan or governing
72	instrument that has been preapproved by the Internal Revenue
73	Service as exempt from taxation under s. 401(a), s. 403(a), s.
74	403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b), or s. 501(a)
75	of the Internal Revenue Code of 1986, as amended, unless it has
76	been subsequently determined that the plan or governing
77	instrument is not exempt from taxation in a proceeding that has
78	become final and not subject to appeal;
79	2.  Maintained in accordance with a plan or governing
80	instrument that has been determined by the Internal Revenue
81	Service to be exempt from taxation under s. 401(a), s. 403(a),
82	s. 403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b), or s.
83	501(a) of the Internal Revenue Code of 1986, as amended, unless
84	it has been subsequently determined that the plan or governing
85	instrument is not exempt from taxation in a proceeding that has
86	become final and not subject to appeal; or
87	3.  Not maintained in accordance with a plan or governing
88	instrument described in subparagraph 1. or 2. if the person
89	claiming exemption under this paragraph proves by a
90	preponderance of the evidence that the fund or account is
91	maintained in accordance with a plan or governing instrument
92	that:
93	a.  Is in substantial compliance with the applicable
94	requirements for tax exemption under s. 401(a), s. 403(a), s.
95	403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b), or s. 501(a)
96	of the Internal Revenue Code of 1986, as amended; or
97	b.  Would have been in substantial compliance with the
98	applicable requirements for tax exemption under s. 401(a), s.
99	403(a), s. 403(b), s. 408, s. 408A, s. 409, s. 414, s. 457(b),
100	or s. 501(a) of the Internal Revenue Code of 1986, as amended,
101	but for the negligent or wrongful conduct of a person or persons
102	other than the person who is claiming the exemption under this
103	section.
104	(b)  It is not necessary that a fund or account described
105	in paragraph (a) be maintained in accordance with a plan or
106	governing instrument that is covered by any part of the Employee
107	Retirement Income Security Act of 1974 for money or assets
108	payable from or any interest in that fund or account to be
109	exempt from claims of creditors under that paragraph.
110	(c)  Any money or other assets that are exempt from claims
111	of creditors under paragraph (a) do not cease to qualify for
112	exemption by reason of a direct transfer or eligible rollover
113	that is excluded from gross income under s. 402(c) of the
114	Internal Revenue Code of 1986 or by distribution from any such
115	fund or account as long as such money or assets are not
116	commingled with other money or assets that are not exempt from
117	claims of creditors under that paragraph.
118	(d)(b)  Any fund or account plan or arrangement described
119	in paragraph (a) is not exempt from the claims of an alternate
120	payee under a qualified domestic relations order. However, the
121	interest of any alternate payee under a qualified domestic
122	relations order is exempt from all claims of any creditor, other
123	than the Department of Children and Family Services, of the
124	alternate payee. As used in this paragraph, the terms "alternate
125	payee" and "qualified domestic relations order" have the
126	meanings ascribed to them in s. 414(p) of the Internal Revenue
127	Code of 1986.
128	(e)(c)  This subsection applies The provisions of
129	paragraphs (a) and (b) apply to any proceeding that is filed on
130	or after July October 1, 2005 1987.
131	Section 2.  Section 222.22, Florida Statutes, is amended to
132	read:
133	222.22  Exemption of assets in qualified tuition programs,
134	medical savings accounts, Coverdell education savings accounts,
135	and hurricane savings accounts moneys in the Prepaid College
136	Trust Fund or in a Medical Savings Account from legal process.--
137	(1)(a)  Moneys paid into or out of, the assets of, and the
138	income of any validly existing qualified tuition program
139	authorized by s. 529 of the Internal Revenue Code of 1986, as
140	amended, including, but not limited to, the Florida Prepaid
141	College Trust Fund advance payment contracts under s. 1009.98
142	and Florida Prepaid College Trust Fund participation agreements
143	under s. 1009.981 the Florida Prepaid College Trust Fund by or
144	on behalf of a purchaser or qualified beneficiary pursuant to an
145	advance payment contract made under part IV of chapter 1009,
146	which contract has not been terminated, are not liable to
147	attachment, levy, garnishment, or legal process in the state in
148	favor of any creditor of or claimant against any program
149	participant, purchaser, owner or contributor, or program
150	beneficiary the purchaser or beneficiary of such advance payment
151	contract.
152	(2)(b)  Moneys paid into or out of, the assets of, and the
153	income of a health savings account or medical savings account
154	authorized under ss. 220 and 223 of the Internal Revenue Code of
155	1986, as amended, are not liable to attachment, levy,
156	garnishment, or legal process in this state in favor of any
157	creditor of or claimant against any account participant,
158	purchaser, owner or contributor, or account beneficiary.
159	(3)  Moneys paid into or out of, the assets of, and the
160	income of any Coverdell education savings account, also known as
161	an educational IRA, established or existing in accordance with
162	s. 530 of the Internal Revenue Code of 1986, as amended, are not
163	liable to attachment, levy, garnishment, or legal process in
164	this state in favor of any creditor of or claimant against any
165	account participant, purchaser, owner or contributor, or account
166	beneficiary.
167	(4)  Moneys paid into or out of, the assets of, and the
168	income of any hurricane savings account established by an
169	insurance policyholder for residential property in this state
170	equal to twice the deductible sum of such insurance to cover an
171	insurance deductible or other uninsured portion of the risks of
172	loss from a hurricane, rising flood waters, or other
173	catastrophic windstorm event are not liable to attachment, levy,
174	garnishment, or legal process in this state in favor of any
175	creditor of or claimant against any account participant,
176	purchaser, owner or contributor, or account beneficiary. As used
177	in this subsection, the term "hurricane savings account" means
178	an account established by the owner of residential real property
179	in this state who specifies that the purpose of the account is
180	to cover the amount of insurance deductibles and other uninsured
181	portions of the risks of loss from hurricanes, rising flood
182	waters, or other catastrophic windstorm events the Prepaid
183	College Trust Fund by or on behalf of a benefactor or designated
184	beneficiary pursuant to a participation agreement made under s.
185	1009.981, which agreement has not been terminated, are not
186	liable to attachment, garnishment, or legal process in the state
187	in favor of any creditor of the purchaser or beneficiary of such
188	participation agreement.
189	(2)  Moneys paid into or out of a Medical Savings Account
190	by or on behalf of a person depositing money into such account
191	or a qualified beneficiary are not liable to attachment,
192	garnishment, or legal process in the state in favor of any
193	creditor of such person or beneficiary of such Medical Savings
194	Account.
195	Section 3.  Section 710.102, Florida Statutes, is amended
196	to read:
197	710.102  Definitions.--As used in this act, the term:
198	(1)  "Adult" means an individual who has attained the age
199	of 21 years.
200	(2)  "Benefit plan" means a retirement plan and may
201	include, but is not limited to, any pension, profit-sharing,
202	stock-bonus, or stock-ownership plan or individual retirement
203	account an employer's plan for the benefit of an employee or
204	partner.
205	(3)  "Broker" means a person lawfully engaged in the
206	business of effecting transactions in securities or commodities
207	for the person's own account or for the account of others.
208	(4)  "Conservator" means a person appointed or qualified by
209	a court to act as general, limited, or temporary guardian of a
210	minor's property or a person legally authorized to perform
211	substantially the same functions.
212	(5)  "Court" means the circuit court.
213	(6)  "Custodial property" means any interest in property
214	transferred to a custodian under this act and the income from
215	and proceeds of that interest in property.
216	(7)  "Custodian" means a person so designated under s.
217	710.111 or a successor or substitute custodian designated under
218	s. 710.121.
219	(8)  "Financial institution" means a bank, trust company,
220	savings institution, or credit union, chartered and supervised
221	under state or federal law.
222	(9)  "Legal representative" means an individual's personal
223	representative or conservator.
224	(10)  "Member of the minor's family" means the minor's
225	parent, stepparent, spouse, grandparent, brother, sister, uncle,
226	or aunt, whether of the whole or half blood or by adoption.
227	(11)  "Minor" means an individual who has not attained the
228	age of 21 years.
229	(12)  "Person" means an individual, corporation,
230	organization, or other legal entity.
231	(13)  "Personal representative" means an executor,
232	administrator, successor personal representative, or special
233	administrator of a decedent's estate or a person legally
234	authorized to perform substantially the same functions.
235	(14)  "Qualified minor's trust" means a trust that meets
236	the requirements of s. 2503(c) of the Internal Revenue Code of
237	1986, as amended.
238	(15)(14)  "State" includes any state of the United States,
239	the District of Columbia, the Commonwealth of Puerto Rico, and
240	any territory or possession subject to the legislative authority
241	of the United States.
242	(16)(15)  "Transfer" means a transaction that creates
243	custodial property under s. 710.111.
244	(17)(16)  "Transferor" means a person who makes a transfer
245	under this act.
246	(18)(17)  "Trust company" means a financial institution,
247	corporation, or other legal entity, authorized to exercise
248	general trust powers.
249	Section 4.  Subsection (1) of section 710.104, Florida
250	Statutes, is amended to read:
251	710.104  Nomination of custodian.--
252	(1)  A person having the right to designate the recipient
253	of property transferable upon the occurrence of a future event
254	may revocably nominate a custodian to receive the property for a
255	minor beneficiary upon the occurrence of the event by naming the
256	custodian followed in substance by the words: "as custodian for
257	(name of minor)   under the Florida Uniform Transfers to Minors
258	Act." The nomination may name one or more persons as substitute
259	custodians to whom the property must be transferred, in the
260	order named, if the first nominated custodian dies before the
261	transfer or is unable, declines, or is ineligible to serve. The
262	nomination may be made in a will, a trust, a deed, an instrument
263	exercising a power of appointment, or in a writing designating a
264	beneficiary of contractual rights, including, but not limited
265	to, the right to a benefit plan, which is registered with or
266	delivered to the payor, issuer, or other obligor of the
267	contractual rights.
268	Section 5.  Section 710.108, Florida Statutes, is amended
269	to read:
270	710.108  Transfer by obligor.--
271	(1)  Subject to subsections (2) and (3), a person not
272	subject to s. 710.106 or s. 710.107 who holds property,
273	including, but not limited to, a benefit plan, of a minor not
274	having a conservator, or who owes a liquidated debt to, a minor
275	not having a conservator, may make an irrevocable transfer to a
276	custodian for the benefit of the minor pursuant to s. 710.111.
277	(2)  If a person having the right to do so under s. 710.104
278	has nominated a custodian under that section to receive the
279	custodial property, the transfer must be made to that person.
280	(3)  If no custodian has been nominated under s. 710.104,
281	or all persons so nominated as custodian die before the transfer
282	or are unable, decline, or are ineligible to serve, a transfer
283	under this section may be made to an adult member of the minor's
284	family or to a trust company unless the property exceeds $15,000
285	$10,000 in value.
286	Section 6.  Section 710.116, Florida Statutes, is amended
287	to read:
288	710.116  Use of custodial property.--
289	(1)  A custodian may deliver or pay to the minor or expend
290	for the minor's benefit so much of the custodial property as the
291	custodian considers advisable for the use and benefit of the
292	minor, without court order and without regard to the duty or
293	ability of the custodian personally or of any other person to
294	support the minor, or to any other income or property of the
295	minor which may be applicable or available for that purpose.
296	(2)  A custodian may, without court order, transfer all or
297	part of the custodial property to a qualified minor's trust. A
298	transfer of property pursuant to this subsection terminates the
299	custodianship to the extent of the property transferred.
300	(3)(2)  On petition of an interested person or the minor if
301	the minor has attained the age of 14 years, the court may order
302	the custodian to deliver or pay to the minor or expend for the
303	minor's benefit so much of the custodial property as the court
304	considers advisable for the use and benefit of the minor.
305	(4)(3)  A delivery, payment, or expenditure under this
306	section is in addition to, not in substitution for, and does not
307	affect any obligation of a person to support the minor.
308	Section 7.  Section 733.808, Florida Statutes, is amended
309	to read:
310	733.808  Death benefits; disposition of proceeds.--
311	(1)  Death benefits of any kind, including, but not limited
312	to, proceeds of:
313	(a)  An individual life insurance policy;
314	(b)  A group life insurance policy;
315	(c)  A benefit plan as defined by s. 710.102 An employees'
316	trust or under a contract purchased by an employees' trust
317	forming part of a pension, stock bonus, or profit-sharing plan;
318	(d)  An annuity or endowment contract; and
319	(e)  A health or and accident policy,
320
321	may be made payable to the trustee under a trust agreement or
322	declaration of trust in existence at the time of the death of
323	the insured, employee, or annuitant or the owner of or
324	participant in the benefit plan. The death benefits shall be
325	held and disposed of by the trustee in accordance with the terms
326	of the trust as they appear in writing on the date of the death
327	of the insured, employee, or annuitant, owner, or participant.
328	It shall not be necessary to the validity of the trust agreement
329	or declaration of trust, whether revocable or irrevocable, that
330	it have a trust corpus other than the right of the trustee to
331	receive death benefits.
332	(2)  Death benefits of any kind, including, but not limited
333	to, proceeds of:
334	(a)  An individual life insurance policy;
335	(b)  A group life insurance policy;
336	(c)  A benefit plan as defined by s. 710.102 An employees'
337	trust, or under a contract purchased by an employees' trust,
338	forming part of a pension, stock bonus, or profit-sharing plan;
339	(d)  An annuity or endowment contract; and
340	(e)  A health or and accident policy,
341
342	may be made payable to the trustee named, or to be named, in a
343	written instrument that is admitted to probate as the last will
344	of the insured, the owner of the policy, the employee, owner, or
345	participant covered by the plan or contract, or any other
346	person, whether or not the will is in existence at the time of
347	designation. Upon the admission of the will to probate, the
348	death benefits shall be paid to the trustee, to be held,
349	administered, and disposed of in accordance with the terms of
350	the trust or trusts created by the will.
351	(3)  In the event no trustee makes proper claim to the
352	proceeds from the insurance company or other obligor within a
353	period of 6 months after the date of the death of the insured,
354	employee, or annuitant, owner, or participant, or if
355	satisfactory evidence is furnished to the insurance company or
356	obligor within that period that there is, or will be, no trustee
357	to receive the proceeds, payment shall be made by the insurance
358	company or obligor to the personal representative of the person
359	making the designation, unless otherwise provided by agreement
360	with the insurer or obligor during the lifetime of the insured,
361	employee, or annuitant, owner, or participant.
362	(4)  Death benefits payable as provided in subsection (1),
363	subsection (2), or subsection (3), unless paid to a personal
364	representative under the provisions of subsection (3), shall not
365	be deemed to be part of the decedent's estate, and shall not be
366	subject to any obligation to pay the expenses of the
367	administration and obligations of the decedent's estate or for
368	contribution required from a trust under s. 733.607(2) to any
369	greater extent than if the proceeds were payable directly to the
370	beneficiaries named in the trust.
371	(5)  The death benefits held in trust may be commingled
372	with any other assets that may properly come into the trust.
373	(6)  Nothing in This section does not shall affect the
374	validity of any designation of a beneficiary of proceeds
375	previously made that designates as beneficiary the trustee of
376	any trust established under a trust agreement or declaration of
377	trust or by will.
378	Section 8.  Subsection (2) of section 744.301, Florida
379	Statutes, is amended to read:
380	744.301  Natural guardians.--
381	(2)  The natural guardian or guardians are authorized, on
382	behalf of any of their minor children, to:
383	(a)  Settle and consummate a settlement of any claim or
384	cause of action accruing to any of their minor children for
385	damages to the person or property of any of said minor children;
386	(b)  and to Collect, receive, manage, and dispose of the
387	proceeds of any such settlement;
388	(c)  Collect, receive, manage, and dispose and of any other
389	real or personal property distributed from an estate or trust;
390	(d)  Collect, receive, manage, and dispose of and make
391	elections regarding the or proceeds from a life insurance policy
392	or annuity contract payable to, or otherwise accruing to the
393	benefit of, the child; and
394	(e)  Collect, receive, manage, dispose of, and make
395	elections regarding the proceeds of any benefit plan as defined
396	by s. 710.102, of which the minor is a beneficiary, participant,
397	or owner,
398
399	without appointment, authority, or bond during minority, when
400	the amount involved in any instance does not exceed $15,000,
401	without appointment, authority, or bond.
402	Section 9.  This act shall take effect upon becoming a law.

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