CS/HB 743

1	A bill to be entitled
2	An act relating to trusts; amending s. 660.417, F.S.;
3	revising criteria for investments in certain investment
4	instruments; creating s. 736.04117, F.S.; providing
5	criteria, requirements, and limitations on a trustee's
6	power to invade the principal of a trust; specifying
7	conditions under which discretionary distributions may be
8	made in further trust; amending s. 736.0802, F.S.;
9	specifying additional trust property transactions not
10	voidable by a beneficiary; revising certain disclosure and
11	applicability requirements; broadening authority for
12	investing in certain investment instruments; revising
13	definitions; excusing trustees from certain compliance
14	requirements under certain circumstances; amending s.
15	736.0816, F.S.; defining the term "mutual fund" for
16	certain purposes; amending s. 736.1008, F.S.; revising
17	effective dates relating to limitations on proceedings
18	against trustees; amending s. 736.1011, F.S.; providing
19	construction relating to trustee drafts of exculpatory
20	terms in a trust instrument; amending s. 689.071, F.S.;
21	limiting the definition of the term "land trust" to an
22	arrangement in which title to real property is vested in a
23	trustee by a recorded instrument that confers certain
24	authority as prescribed by state law; providing that such
25	a recorded instrument does not itself create an entity;
26	providing that a recorded instrument is effective
27	regardless of whether it refers to beneficiaries of the
28	trust; providing that a recorded instrument vests both
29	legal and equitable title to real property or the interest
30	therein in the trustee; conforming cross-references;
31	amending s. 731.201, F.S.; revising a definition; amending
32	s. 731.303, F.S.; excluding trusts from guidelines
33	regarding administration and judicial proceedings;
34	amending s. 736.0102, F.S.; conforming a cross-reference;
35	amending s. 736.0501, F.S.; limiting the ability of
36	creditors or assignees of a beneficiary to reach the
37	beneficiary's interest in a trust; amending s. 736.0502,
38	F.S.; clarifying the application of restrictions on
39	transferring a beneficiary's interest under a spendthrift
40	provision; amending s. 736.0503, F.S.; providing an
41	exception to a provision authorizing the attachment of
42	trust distributions; amending s. 736.0504, F.S.; defining
43	the term "discretionary distribution"; prohibiting certain
44	creditors from compelling distributions or attaching a
45	beneficiary's interest or expectancy; amending s.
46	736.0813, F.S.; conforming a date of applicability of the
47	accounting provision and corresponding limitations to the
48	effective date of the code; amending s. 736.1106, F.S.;
49	providing that certain antilapse provisions continue to
50	apply to irrevocable trusts created between June 12, 2003,
51	and July 1, 2007; amending s. 736.1204, F.S.; clarifying
52	the use of income interest of a trust; amending ss.
53	736.1209 and 736.1001, F.S., relating to the release of
54	power by a trustee and removal of a trustee; conforming
55	cross-references; providing an effective date.
56
57	Be It Enacted by the Legislature of the State of Florida:
58
59	Section 1.  Subsection (3) of section 660.417, Florida
60	Statutes, as amended by section 18 of chapter 2006-217, Laws of
61	Florida, is amended to read:
62	660.417  Investment of fiduciary funds in investment
63	instruments; permissible activity under certain circumstances;
64	limitations.--
65	(3)  The fact that such bank or trust company or an
66	affiliate of the bank or trust company owns or controls
67	investment instruments shall not preclude the bank or trust
68	company acting as a fiduciary from investing or reinvesting in
69	such investment instruments, provided such investment
70	instruments:
71	(a)  Are held for sale by the bank or trust company or by
72	an affiliate of the bank or trust company in the ordinary course
73	of its business of providing investment services to its
74	customers and do not include any such interests held by the bank
75	or trust company or by an affiliate of the bank or trust company
76	for its own account.
77	(b)  When Are sold primarily to accounts for which the bank
78	or trust company is not acting as a trustee of a trust as
79	defined in s. 731.201(35):
80	1.  Are available for sale to accounts of other customers;
81	and
82	2.  If sold to other customers, are not sold to the trust
83	accounts fiduciary upon terms that are less not more favorable
84	to the buyer than the terms upon which they are normally sold to
85	the other customers accounts for which the bank or trust company
86	is acting as a fiduciary.
87	Section 2.  Section 736.04117, Florida Statutes, is created
88	to read:
89	736.04117  Trustee's power to invade principal in trust.--
90	(1)(a)  Unless the trust instrument expressly provides
91	otherwise, a trustee who has absolute power under the terms of a
92	trust to invade the principal of the trust, referred to in this
93	section as the "first trust," to make distributions to or for
94	the benefit of one or more persons may instead exercise the
95	power by appointing all or part of the principal of the trust
96	subject to the power in favor of a trustee of another trust,
97	referred to in this section as the "second trust," for the
98	current benefit of one or more of such persons under the same
99	trust instrument or under a different trust instrument;
100	provided:
101	1.  The beneficiaries of the second trust may include only
102	beneficiaries of the first trust;
103	2.  The second trust may not reduce any fixed income,
104	annuity, or unitrust interest in the assets of the first trust;
105	and
106	3.  If any contribution to the first trust qualified for a
107	marital or charitable deduction for federal income, gift, or
108	estate tax purposes under the Internal Revenue Code of 1986, as
109	amended, the second trust shall not contain any provision which,
110	if included in the first trust, would have prevented the first
111	trust from qualifying for such a deduction or would have reduced
112	the amount of such deduction.
113	(b)  For purposes of this subsection, an absolute power to
114	invade principal shall include a power to invade principal that
115	is not limited to specific or ascertainable purposes, such as
116	health, education, maintenance, and support, whether or not the
117	term "absolute" is used. A power to invade principal for
118	purposes such as best interests, welfare, comfort, or happiness
119	shall constitute an absolute power not limited to specific or
120	ascertainable purposes.
121	(2)  The exercise of a power to invade principal under
122	subsection (1) shall be by an instrument in writing, signed and
123	acknowledged by the trustee, and filed with the records of the
124	first trust.
125	(3)  The exercise of a power to invade principal under
126	subsection (1) shall be considered the exercise of a power of
127	appointment, other than a power to appoint to the trustee, the
128	trustee's creditors, the trustee's estate, or the creditors of
129	the trustee's estate, and shall be subject to the provisions of
130	s. 689.225 covering the time at which the permissible period of
131	the rule against perpetuities begins and the law that determines
132	the permissible period of the rule against perpetuities of the
133	first trust.
134	(4)  The trustee shall notify all qualified beneficiaries
135	of the first trust, in writing, at least 60 days prior to the
136	effective date of the trustee's exercise of the trustee's power
137	to invade principal pursuant to subsection (1), of the manner in
138	which the trustee intends to exercise the power. A copy of the
139	proposed instrument exercising the power shall satisfy the
140	trustee's notice obligation under this subsection. If all
141	qualified beneficiaries waive the notice period by signed
142	written instrument delivered to the trustee, the trustee's power
143	to invade principal shall be exercisable immediately. The
144	trustee's notice under this subsection shall not limit the right
145	of any beneficiary to object to the exercise of the trustee's
146	power to invade principal except as provided in other applicable
147	provisions of this code.
148	(5)  The exercise of the power to invade principal under
149	subsection (1) is not prohibited by a spendthrift clause or by a
150	provision in the trust instrument that prohibits amendment or
151	revocation of the trust.
152	(6)  Nothing in this section is intended to create or imply
153	a duty to exercise a power to invade principal and no inference
154	of impropriety shall be made as a result of a trustee not
155	exercising the power to invade principal conferred under
156	subsection (1).
157	(7)  The provisions of this section shall not be construed
158	to abridge the right of any trustee who has a power of invasion
159	to appoint property in further trust that arises under the terms
160	of the first trust or under any other section of this code or
161	under another provision of law or under common law.
162	Section 3.  Subsections (2) and (5) of section 736.0802,
163	Florida Statutes, are amended to read:
164	736.0802  Duty of loyalty.--
165	(2)  Subject to the rights of persons dealing with or
166	assisting the trustee as provided in s. 736.1016, a sale,
167	encumbrance, or other transaction involving the investment or
168	management of trust property entered into by the trustee for the
169	trustee's own personal account or which is otherwise affected by
170	a conflict between the trustee's fiduciary and personal
171	interests is voidable by a beneficiary affected by the
172	transaction unless:
173	(a)  The transaction was authorized by the terms of the
174	trust;
175	(b)  The transaction was approved by the court;
176	(c)  The beneficiary did not commence a judicial proceeding
177	within the time allowed by s. 736.1008;
178	(d)  The beneficiary consented to the trustee's conduct,
179	ratified the transaction, or released the trustee in compliance
180	with s. 736.1012;
181	(e)  The transaction involves a contract entered into or
182	claim acquired by the trustee when that person had not become or
183	contemplated becoming trustee; or
184	(f)  The transaction was consented to in writing by a
185	settlor of the trust while the trust was revocable; or.
186	(g)  The transaction is one by a corporate trustee that
187	involves a money market mutual fund, mutual fund, or a common
188	trust fund described in s. 736.0816(3).
189	(5)(a)  An investment by a trustee authorized by lawful
190	authority to engage in trust business, as defined in s.
191	658.12(20), in investment instruments, as defined in s.
192	660.25(6), that are owned or controlled by the trustee or its
193	affiliate, or from which the trustee or its affiliate receives
194	compensation for providing services in a capacity other than as
195	trustee, is not presumed to be affected by a conflict between
196	personal and fiduciary interests provided the investment
197	otherwise complies with chapters 518 and 660 and the trustee
198	complies with the disclosure requirements of this subsection.
199	(b)  A trustee who, pursuant to this subsection, invests
200	trust funds in investment instruments that are owned or
201	controlled by the trustee or its affiliate shall disclose the
202	following to all qualified beneficiaries:
203	1.  Notice that the trustee has invested trust funds in
204	investment instruments owned or controlled by the trustee or its
205	affiliate.
206	2.  The identity of the investment instruments.
207	3.  The identity and relationship to the trustee of any
208	affiliate that owns or controls the investment instruments.
209	(c)  A trustee who, pursuant to this subsection, invests
210	trust funds in investment instruments with respect to which the
211	trustee or its affiliate receives compensation for providing
212	services in a capacity other than as trustee shall disclose to
213	all qualified beneficiaries, the nature of the services provided
214	by the trustee or its affiliate, and all compensation,
215	including, but not limited to, fees or commissions paid or to be
216	paid by the account and received or to be received by an
217	affiliate arising from such affiliated investment.
218	(d)  Disclosure required by this subsection shall be made
219	at least annually unless there has been no change in the method
220	or increase in the rate at which such compensation is calculated
221	since the most recent disclosure. The disclosure may be given in
222	a trust disclosure document as defined in s. 736.1008, in a copy
223	of the prospectus for the investment instrument, in any other
224	written disclosure prepared for the investment instrument under
225	applicable federal or state law, or in a written summary that
226	includes all compensation received or to be received by the
227	trustee and any affiliate of the trustee and an explanation of
228	the manner in which such compensation is calculated, either as a
229	percentage of the assets invested or by some other method.
230	(e)  This subsection shall apply as follows:
231	1.  This subsection does not apply to qualified investment
232	instruments or to a trust for which a right of revocation
233	exists.
234	2.  For investment instruments other than qualified
235	investment instruments, paragraphs (a), (b), (c), and (d) shall
236	apply to irrevocable trusts created on or after July 1, 2007,
237	which expressly authorize the trustee, by specific reference to
238	this subsection, to invest in investment instruments owned or
239	controlled by the trustee or its affiliate.
240	3.  For investment instruments other than qualified
241	investment instruments, paragraphs (a), (b), (c), and (d) shall
242	apply to irrevocable trusts created on or after July 1, 2007,
243	that are not described in subparagraph 2. and to irrevocable
244	trusts created prior to July 1, 2007, only as follows:
245	a.  Such paragraphs shall not apply until 60 days after the
246	statement required in paragraph (f) is provided and a majority
247	of the qualified beneficiaries have provided written consent.
248	All consents must be obtained within 90 days after the date of
249	delivery of the written request. Once given, consent shall be
250	valid as to all investment instruments acquired pursuant to the
251	consent prior to the date of any withdrawal of the consent no
252	objection is made or any objection which is made has been
253	terminated.
254	(I)  An objection is made if, within 60 days after the date
255	of the statement required in paragraph (f), a super majority of
256	the eligible beneficiaries deliver to the trustee written
257	objections to the application of this subsection to such trust.
258	An objection shall be deemed to be delivered to the trustee on
259	the date the objection is mailed to the mailing address listed
260	in the notice provided in paragraph (f).
261	(II)  An objection is terminated upon the earlier of the
262	receipt of consent from a super majority of eligible
263	beneficiaries of the class that made the objection or the
264	resolution of the objection pursuant to this subparagraph.
265	(III)  If an objection is delivered to the trustee, the
266	trustee may petition the court for an order overruling the
267	objection and authorizing the trustee to make investments under
268	this subsection. The burden shall be on the trustee to show good
269	cause for the relief sought.
270	(I)(IV)  Any qualified beneficiary may petition the court
271	for an order to prohibit, limit, or restrict a trustee's
272	authority to make investments under this subsection. The burden
273	shall be upon the petitioning beneficiary to show good cause for
274	the relief sought.
275	(II)(V)  The court may award costs and attorney's fees
276	relating to any petition under this subparagraph in the same
277	manner as in chancery actions. When costs and attorney's fees
278	are to be paid out of the trust, the court, in its discretion,
279	may direct from which part of the trust such costs and fees
280	shall be paid.
281	b.  The consent objection of a majority of the qualified
282	super majority of eligible beneficiaries under this subparagraph
283	may thereafter be withdrawn prospectively removed by the written
284	notice consent of a super majority of any one of the class or
285	classes of the qualified those eligible beneficiaries that made
286	the objection.
287	(f)1.  The trustee of a trust described in s. 731.201(35)
288	may request authority to invest in Any time prior to initially
289	investing in any investment instruments instrument described in
290	this subsection other than a qualified investment instrument, by
291	providing the trustee of a trust described in subparagraph (e)3.
292	shall provide to all qualified beneficiaries a written request
293	statement containing the following:
294	a.  The name, telephone number, street address, and mailing
295	address of the trustee and of any individuals who may be
296	contacted for further information.
297	b.  A statement that the investment or investments cannot
298	be made without the consent of a majority of each class of the
299	qualified beneficiaries, unless a super majority of the eligible
300	beneficiaries objects to the application of this subsection to
301	the trust within 60 days after the date the statement pursuant
302	to this subsection was delivered, this subsection shall apply to
303	the trust.
304	c.  A statement that, if a majority of each class of
305	qualified beneficiaries consent this subsection applies to the
306	trust, the trustee will have the right to make investments in
307	investment instruments, as defined in s. 660.25(6), which are
308	owned or controlled by the trustee or its affiliate, or from
309	which the trustee or its affiliate receives compensation for
310	providing services in a capacity other than as trustee, that
311	such investment instruments may include investment instruments
312	sold primarily to trust accounts, and that the trustee or its
313	affiliate may receive fees in addition to the trustee's
314	compensation for administering the trust.
315	d.  A statement that the consent may be withdrawn
316	prospectively at any time by written notice given by a majority
317	of any class of the qualified beneficiaries.
318
319	A statement by the trustee is not delivered if the statement is
320	accompanied by another written communication other than a
321	written communication by the trustee that refers only to the
322	statement.
323	2.  For purposes of paragraph (e) and this paragraph:
324	a.  "Eligible beneficiaries" means:
325	(I)  If at the time the determination is made there are one
326	or more beneficiaries as described in s. 736.0103(14)(c), the
327	beneficiaries described in s. 736.0103(14)(a) and (c); or
328	(II)  If there is no beneficiary described in s.
329	736.0103(14)(c), the beneficiaries described in s.
330	736.0103(14)(a) and (b).
331	a.b.  "Super Majority of the qualified eligible
332	beneficiaries" means:
333	(I)  If at the time the determination is made there are one
334	or more beneficiaries as described in s. 736.0103(14)(c), at
335	least a majority two-thirds in interest of the beneficiaries
336	described in s. 736.0103(14)(a), at least a majority in interest
337	of the beneficiaries described in s. 736.0103(14)(b), and at
338	least a majority or two-thirds in interest of the beneficiaries
339	described in s. 736.0103(14)(c), if the interests of the
340	beneficiaries are reasonably ascertainable; otherwise, a
341	majority two-thirds in number of each either such class; or
342	(II)  If there is no beneficiary as described in s.
343	736.0103(14)(c), at least a majority two-thirds in interest of
344	the beneficiaries described in s. 736.0103(14)(a) and at least a
345	majority or two-thirds in interest of the beneficiaries
346	described in s. 736.0103(14)(b), if the interests of the
347	beneficiaries are reasonably ascertainable; otherwise, a
348	majority two-thirds in number of each either such class.
349	b.c.  "Qualified investment instrument" means a mutual
350	fund, common trust fund, or money market fund described in and
351	governed by s. 736.0816(3).
352	c.d.  An irrevocable trust is created upon execution of the
353	trust instrument. If a trust that was revocable when created
354	thereafter becomes irrevocable, the irrevocable trust is created
355	when the right of revocation terminates.
356	(g)  Nothing in this chapter is intended to create or imply
357	a duty for the trustee to seek the application of this
358	subsection to invest in investment instruments described in
359	paragraph (a), and no inference of impropriety may be made as a
360	result of a trustee electing not to invest trust assets in
361	investment instruments described in paragraph (a).
362	(h)  This subsection is not the exclusive authority under
363	this code for investing in investment instruments described in
364	paragraph (a). A trustee who invests trust funds in investment
365	instruments described in paragraph (a) is not required to comply
366	with paragraph (b), paragraph (c), or paragraph (f) if the
367	trustee is permitted to invest in such investment instruments
368	pursuant to subsection (2).
369	Section 4.  Subsection (3) of section 736.0816, Florida
370	Statutes, is amended to read:
371	736.0816  Specific powers of trustee.--Except as limited or
372	restricted by this code, a trustee may:
373	(3)  Acquire an undivided interest in a trust asset,
374	including, but not limited to, a money market mutual fund,
375	mutual fund, or common trust fund, in which asset the trustee
376	holds an undivided interest in any trust capacity, including any
377	money market or other mutual fund from which the trustee or any
378	affiliate or associate of the trustee is entitled to receive
379	reasonable compensation for providing necessary services as an
380	investment adviser, portfolio manager, or servicing agent. A
381	trustee or affiliate or associate of the trustee may receive
382	compensation for such services in addition to fees received for
383	administering the trust provided such compensation is fully
384	disclosed in writing to all qualified beneficiaries. As used in
385	this subsection, the term "mutual fund" includes an open-end or
386	closed-end management investment company or investment trust
387	registered under the Investment Company Act of 1940, 15 U.S.C.
388	ss. 80a-1 et seq., as amended.
389	Section 5.  Subsection (6) of section 736.1008, Florida
390	Statutes, is amended to read:
391	736.1008  Limitations on proceedings against trustees.--
392	(6)  This section applies to trust accountings for
393	accounting periods beginning on or after July January 1, 2007
394	2008, and to written reports, other than trust accountings,
395	received by a beneficiary on or after July January 1, 2007 2008.
396	Section 6.  Subsection (2) of section 736.1011, Florida
397	Statutes, is amended to read:
398	736.1011  Exculpation of trustee.--
399	(2)  An exculpatory term drafted or caused to be drafted by
400	the trustee is invalid as an abuse of a fiduciary or
401	confidential relationship unless:
402	(a)  The trustee proves that the exculpatory term is fair
403	under the circumstances.
404	(b)  and that The term's existence and contents were
405	adequately communicated directly to the settlor or the
406	independent attorney of the settlor. This paragraph applies only
407	to trusts created on or after July 1, 2007.
408	Section 7.  Paragraph (d) of subsection (2), subsections
409	(3) and (7), and paragraph (a) of subsection (9) of section
410	689.071, Florida Statutes, as amended by section 21 of chapter
411	2006-217, Laws of Florida, are amended to read:
412	689.071  Florida Land Trust Act.--
413	(2)  DEFINITIONS.--As used in this section, the term:
414	(d)  "Land trust" is not the creation of an entity, but
415	means any express written agreement or arrangement by which a
416	use, confidence, or trust is declared of any land, or of any
417	charge upon land, for the use or benefit of any beneficiary,
418	under which the title to real property, both legal and
419	equitable, is vested in a trustee by a recorded instrument that
420	confers on the trustee the power and authority prescribed in
421	subsection (3). The recorded instrument does not itself create
422	an entity, regardless of whether the relationship among the
423	beneficiaries and the trustee is deemed to be an entity under
424	other applicable law held by a trustee, subject only to the
425	execution of the trust, which may be enforced by the
426	beneficiaries.
427	(3)  OWNERSHIP VESTS IN TRUSTEE.--Every conveyance, deed,
428	mortgage, lease assignment, or other instrument heretofore or
429	hereafter made, hereinafter referred to as the "the recorded
430	instrument," transferring any interest in real property in this
431	state, including, but not limited to, a leasehold or mortgagee
432	interest, to any person or any corporation, bank, trust company,
433	or other entity duly formed under the laws of its state of
434	qualification, in which recorded instrument the person,
435	corporation, bank, trust company, or other entity is designated
436	"trustee," or "as trustee," without therein naming the
437	beneficiaries of such trust, whether or not reference is made in
438	the recorded instrument to the beneficiaries of such trust or to
439	any separate collateral unrecorded declarations or agreements,
440	is effective to vest, and is hereby declared to have vested, in
441	such trustee both legal and equitable title, and full rights of
442	ownership, over the real property or interest therein, with full
443	power and authority as granted and provided in the recorded
444	instrument to deal in and with the property or interest therein
445	or any part thereof; provided, the recorded instrument confers
446	on the trustee the power and authority either to protect, to
447	conserve, and to sell, or to lease, or to encumber, or otherwise
448	to manage and dispose of the real property described in the
449	recorded instrument.
450	(7)  TRUSTEE LIABILITY.--In addition to any other
451	limitation on personal liability existing pursuant to statute or
452	otherwise, the provisions of ss. 736.08125 and 736.1013 s.
453	736.1013 apply to the trustee of a land trust created pursuant
454	to this section.
455	(9)  SUCCESSOR TRUSTEE.--
456	(a)  The provisions of s. 736.0705 s. 737.309 relating to
457	the resignation of a trustee do not apply to the appointment of
458	a successor trustee under this section.
459	Section 8.  Subsection (35) of section 731.201, Florida
460	Statutes, as amended by section 29 of chapter 2006-217, Laws of
461	Florida, is amended to read:
462	731.201  General definitions.--Subject to additional
463	definitions in subsequent chapters that are applicable to
464	specific chapters or parts, and unless the context otherwise
465	requires, in this code, in s. 409.9101, and in chapters 736,
466	738, 739, and 744, the term:
467	(35)  "Trust" means an express trust, private or
468	charitable, with additions to it, wherever and however created.
469	It also includes a trust created or determined by a judgment or
470	decree under which the trust is to be administered in the manner
471	of an express trust. "Trust" excludes other constructive trusts,
472	and it excludes resulting trusts; conservatorships; custodial
473	arrangements pursuant to the Florida Uniform Transfers to Minors
474	Act; business trusts providing for certificates to be issued to
475	beneficiaries; common trust funds; land trusts under s. 689.071,
476	except to the extent provided in s. 689.071(7) 689.05; trusts
477	created by the form of the account or by the deposit agreement
478	at a financial institution; voting trusts; security
479	arrangements; liquidation trusts; trusts for the primary purpose
480	of paying debts, dividends, interest, salaries, wages, profits,
481	pensions, or employee benefits of any kind; and any arrangement
482	under which a person is nominee or escrowee for another.
483	Section 9.  Section 731.303, Florida Statutes, as amended
484	by section 30 of chapter 2006-217, Laws of Florida, is amended
485	to read:
486	731.303  Representation.--In the administration of or in
487	judicial proceedings involving estates of decedents or trusts,
488	the following apply:
489	(1)  Persons are bound by orders binding others in the
490	following cases:
491	(a)1.  Orders binding the sole holder or all coholders of a
492	power of revocation or a general, special, or limited power of
493	appointment, including one in the form of a power of amendment
494	or revocation to the extent that the power has not become
495	unexercisable in fact, bind all persons to the extent that their
496	interests, as persons who may take by virtue of the exercise or
497	nonexercise of the power, are subject to the power.
498	2.  Subparagraph 1. does not apply to:
499	a.  Any matter determined by the court to involve fraud or
500	bad faith by the trustee;
501	b.  A power of a trustee to distribute trust property; or
502	c.  A power of appointment held by a person while the
503	person is the sole trustee.
504	(b)  To the extent there is no conflict of interest between
505	them or among the persons represented:
506	1.  Orders binding a guardian of the property bind the
507	ward.
508	2.  Orders binding a trustee bind beneficiaries of the
509	trust in proceedings to probate a will, in establishing or
510	adding to a trust, in reviewing the acts or accounts of a prior
511	fiduciary, and in proceedings involving creditors or other third
512	parties. However, for purposes of this section, a conflict of
513	interest shall be deemed to exist when each trustee of a trust
514	that is a beneficiary of the estate is also a personal
515	representative of the estate.
516	3.  Orders binding a personal representative bind persons
517	interested in the undistributed assets of a decedent's estate,
518	in actions or proceedings by or against the estate.
519	(c)  An unborn or unascertained person, or a minor or any
520	other person under a legal disability, who is not otherwise
521	represented is bound by an order to the extent that person's
522	interest is represented by another party having the same or
523	greater quality of interest in the proceeding.
524	(2)  Orders binding a guardian of the person shall not bind
525	the ward.
526	(3)  In proceedings involving the administration of estates
527	or trusts, notice is required as follows:
528	(a)  Notice as prescribed by law shall be given to every
529	interested person, or to one who can bind the interested person
530	as described in paragraph (1)(a) or paragraph (1)(b). Notice may
531	be given both to the interested person and to another who can
532	bind him or her.
533	(b)  Notice is given to unborn or unascertained persons who
534	are not represented pursuant to paragraph (1)(a) or paragraph
535	(1)(b) by giving notice to all known persons whose interests in
536	the proceedings are the same as, or of a greater quality than,
537	those of the unborn or unascertained persons.
538	(4)  If the court determines that representation of the
539	interest would otherwise be inadequate, the court may, at any
540	time, appoint a guardian ad litem to represent the interests of
541	an incapacitated person, an unborn or unascertained person, a
542	minor or any other person otherwise under a legal disability, or
543	a person whose identity or address is unknown. If not precluded
544	by conflict of interest, a guardian ad litem may be appointed to
545	represent several persons or interests.
546	(5)  The holder of a power of appointment over property not
547	held in trust may represent and bind persons whose interests, as
548	permissible appointees, takers in default, or otherwise, are
549	subject to the power. Representation under this subsection does
550	not apply to:
551	(a)  Any matter determined by the court to involve fraud or
552	bad faith by the trustee;
553	(b)  A power of a trustee to distribute trust property; or
554	(c)  A power of appointment held by a person while the
555	person is the sole trustee.
556	Section 10.  Section 736.0102, Florida Statutes, is amended
557	to read:
558	736.0102  Scope.--This code applies to express trusts,
559	charitable or noncharitable, and trusts created pursuant to a
560	law, judgment, or decree that requires the trust to be
561	administered in the manner of an express trust. This code does
562	not apply to constructive or resulting trusts; conservatorships;
563	custodial arrangements pursuant to the Florida Uniform Transfers
564	to Minors Act; business trusts providing for certificates to be
565	issued to beneficiaries; common trust funds; land trusts under
566	s. 689.071, except to the extent provided in s. 689.071(7) s.
567	689.05; trusts created by the form of the account or by the
568	deposit agreement at a financial institution; voting trusts;
569	security arrangements; liquidation trusts; trusts for the
570	primary purpose of paying debts, dividends, interest, salaries,
571	wages, profits, pensions, or employee benefits of any kind; and
572	any arrangement under which a person is nominee or escrowee for
573	another.
574	Section 11.  Section 736.0501, Florida Statutes, is amended
575	to read:
576	736.0501  Rights of beneficiary's creditor or
577	assignee.--Except as provided in s. 736.0504, to the extent a
578	beneficiary's interest is not subject to a spendthrift
579	provision, the court may authorize a creditor or assignee of the
580	beneficiary to reach the beneficiary's interest by attachment of
581	present or future distributions to or for the benefit of the
582	beneficiary or by other means. The court may limit the award to
583	such relief as is appropriate under the circumstances.
584	Section 12.  Subsection (1) of section 736.0502, Florida
585	Statutes, is amended to read:
586	736.0502  Spendthrift provision.--
587	(1)  A spendthrift provision is valid only if the provision
588	restrains both voluntary and involuntary transfer of a
589	beneficiary's interest. This subsection does not apply to any
590	trust the terms of which are included in an instrument executed
591	before in existence on the effective date of this code.
592	Section 13.  Subsection (3) of section 736.0503, Florida
593	Statutes, is amended to read:
594	736.0503  Exceptions to spendthrift provision.--
595	(3)  Except as otherwise provided in this subsection and in
596	s. 736.0504, a claimant against which a spendthrift provision
597	may not be enforced may obtain from a court, or pursuant to the
598	Uniform Interstate Family Support Act, an order attaching
599	present or future distributions to or for the benefit of the
600	beneficiary. The court may limit the award to such relief as is
601	appropriate under the circumstances. Notwithstanding this
602	subsection, the remedies provided in this subsection apply to a
603	claim by a beneficiary's child, spouse, former spouse, or a
604	judgment creditor described in paragraph (2)(a) or paragraph
605	(2)(b) only as a last resort upon an initial showing that
606	traditional methods of enforcing the claim are insufficient.
607	Section 14.  Section 736.0504, Florida Statutes, is amended
608	to read:
609	736.0504  Discretionary trusts; effect of standard.--
610	(1)  As used in this section, the term "discretionary
611	distribution" means a distribution that is subject to the
612	trustee's discretion whether or not the discretion is expressed
613	in the form of a standard of distribution and whether or not the
614	trustee has abused the discretion.
615	(2)  Whether or not a trust contains a spendthrift
616	provision, if a trustee may make discretionary distributions to
617	or for the benefit of a beneficiary, a creditor of the
618	beneficiary, including a creditor as described in s.
619	736.0503(2), may not:
620	(a)  Compel a distribution that is subject to the trustee's
621	discretion; or
622	(b)  Attach or otherwise reach the interest, if any, which
623	the beneficiary might have as a result of the trustee's
624	authority to make discretionary distributions to or for the
625	benefit of the beneficiary. Whether or not a trust contains a
626	spendthrift provision, a creditor of a beneficiary may not
627	compel a distribution that is subject to the trustee's
628	discretion, even if:
629	(a)  The discretion is expressed in the form of a standard
630	of distribution; or
631	(b)  The trustee has abused the discretion.
632	(3)(2)  If the trustee's discretion to make distributions
633	for the trustee's own benefit is limited by an ascertainable
634	standard, a creditor may not reach or compel distribution of the
635	beneficial interest except to the extent the interest would be
636	subject to the creditor's claim were the beneficiary not acting
637	as trustee.
638	(4)(3)  This section does not limit the right of a
639	beneficiary to maintain a judicial proceeding against a trustee
640	for an abuse of discretion or failure to comply with a standard
641	for distribution.
642	Section 15.  Subsection (5) of section 736.0813, Florida
643	Statutes, is amended to read:
644	736.0813  Duty to inform and account.--The trustee shall
645	keep the qualified beneficiaries of the trust reasonably
646	informed of the trust and its administration.
647	(5)  This section applies to trust accountings rendered for
648	accounting periods beginning on or after July 1, 2007 January 1,
649	2008.
650	Section 16.  Subsection (5) of section 736.1106, Florida
651	Statutes, is amended to read:
652	736.1106  Antilapse; survivorship with respect to future
653	interests under terms of inter vivos and testamentary trusts;
654	substitute takers.--
655	(5)  Subsections (1) through (4) apply This section applies
656	to all trusts other than trusts that were irrevocable before the
657	effective date of this code. Sections 732.603, 732.604, and
658	737.6035, as they exist on June 30, 2007, continue to apply to
659	other trusts executed on or after June 12, 2003.
660	Section 17.  Paragraph (a) of subsection (4) of section
661	736.1204, Florida Statutes, is amended to read:
662	736.1204  Powers and duties of trustee of a private
663	foundation trust or a split interest trust.--
664	(4)  Paragraphs (3)(b) and (c) shall not apply to a split
665	interest trust if:
666	(a)  All the income interest from income, and none of the
667	remainder interest, of the trust is devoted solely to one or
668	more of the purposes described in s. 170(c)(2)(B) of the
669	Internal Revenue Code, and all amounts in the trust for which a
670	deduction was allowed under s. 170, s. 545(b)(2), s. 556(b)(2),
671	s. 642(c), s. 2055, s. 2106(a)(2), or s. 2522 of the Internal
672	Revenue Code have an aggregate fair market value of not more
673	than 60 percent of the aggregate fair market value of all
674	amounts in the trust; or
675	Section 18.  Section 736.1209, Florida Statutes, is amended
676	to read:
677	736.1209  Election to come under this part.--With the
678	consent of that organization or organizations, a trustee of a
679	trust for the benefit of a public charitable organization or
680	organizations may come under s. 736.1208(5) s. 736.0838(5) by
681	filing with the state attorney an election, accompanied by the
682	proof of required consent. Thereafter the trust shall be subject
683	to s. 736.1208(5).
684	Section 19.  Paragraph (g) of subsection (2) of section
685	736.1001, Florida Statutes, is amended to read:
686	736.1001  Remedies for breach of trust.--
687	(2)  To remedy a breach of trust that has occurred or may
688	occur, the court may:
689	(g)  Remove the trustee as provided in s. 736.0706 s.
690	736.706;
691	Section 20.  This act shall take effect July 1, 2007.

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