| 1 | A bill to be entitled |
| 2 | An act relating to trust administration; amending s. |
| 3 | 736.0703, F.S.; providing exceptions to duties and |
| 4 | liabilities of cotrustees for excluded cotrustees under |
| 5 | certain circumstances; providing for liabilities and |
| 6 | obligations of included cotrustees; amending s. 736.0802, |
| 7 | F.S.; providing an exception for trustee payments of costs |
| 8 | and attorney's fees from trust assets except pursuant to |
| 9 | court order under certain circumstances; providing |
| 10 | requirements for obtaining such a court order; preserving |
| 11 | certain court remedies; amending s. 736.1008, F.S.; |
| 12 | specifying periods of repose barring claims by a |
| 13 | beneficiary against a trustee; providing construction; |
| 14 | providing an effective date. |
| 15 |
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| 16 | Be It Enacted by the Legislature of the State of Florida: |
| 17 |
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| 18 | Section 1. Subsection(7) of section 736.0703, Florida |
| 19 | Statutes, is amended, and subsection (9) is added to that |
| 20 | section, to read: |
| 21 | 736.0703 Cotrustees.-- |
| 22 | (7) Except as otherwise provided in subsection (9), each |
| 23 | cotrustee shall exercise reasonable care to: |
| 24 | (a) Prevent a cotrustee from committing a breach of trust. |
| 25 | (b) Compel a cotrustee to redress a breach of trust. |
| 26 | (9) If the terms of a trust instrument provide for the |
| 27 | appointment of more than one trustee but confer upon one or more |
| 28 | of the trustees, to the exclusion of the others, the power to |
| 29 | direct or prevent specified actions of the trustees, the |
| 30 | excluded trustees shall act in accordance with the exercise of |
| 31 | the power. An excluded trustee is not liable, individually or as |
| 32 | a fiduciary, for any consequence that results from compliance |
| 33 | with the exercise of the power, regardless of the information |
| 34 | available to the excluded trustees. The excluded trustees are |
| 35 | relieved of any obligation to review, inquire, investigate, or |
| 36 | make recommendations or evaluations with respect to the exercise |
| 37 | of the power. The trustee or trustees having the power to direct |
| 38 | or prevent actions of the trustees shall be liable to the |
| 39 | beneficiaries with respect to the exercise of the power as if |
| 40 | the excluded trustees were not in office and shall have the |
| 41 | exclusive obligation to account to and to defend any action |
| 42 | brought by the beneficiaries with respect to the exercise of the |
| 43 | power. |
| 44 | Section 2. Subsection (10) of section 736.0802, Florida |
| 45 | Statutes, is amended to read: |
| 46 | 736.0802 Duty of loyalty.-- |
| 47 | (10) Payment of costs or attorney's fees incurred in any |
| 48 | trust proceeding from the assets of the trust may be made by the |
| 49 | trustee without the approval of any person and without court |
| 50 | authorization, unless the court orders otherwise as provided in |
| 51 | paragraph (a). except that court authorization shall be required |
| 52 | if an action has been filed |
| 53 | (a) If a claim or defense asserted against the trustee |
| 54 | based upon a breach of trust is made against the trustee in a |
| 55 | trust proceeding, a party must obtain a court order to prohibit |
| 56 | the trustee from paying costs or attorney's fees from trust |
| 57 | assets. To obtain an order prohibiting payment of costs or |
| 58 | attorney's fees from trust assets, a party must make a |
| 59 | reasonable showing by evidence in the record or by proffering |
| 60 | evidence that provides a reasonable basis for a court to |
| 61 | conclude that there has been a breach of trust. The trustee may |
| 62 | proffer evidence to rebut the evidence submitted by a party. |
| 63 | (b) Nothing in this subsection is intended to restrict the |
| 64 | remedies a court may employ to remedy a breach of trust, |
| 65 | including, but not limited to, ordering appropriate refunds. |
| 66 | Court authorization is not required if the action or defense is |
| 67 | later withdrawn or dismissed by the party that is alleging a |
| 68 | breach of trust or resolved without a determination by the court |
| 69 | that the trustee has committed a breach of trust. |
| 70 | Section 3. Subsection (3) of section 736.1008, Florida |
| 71 | Statutes, is amended, subsection (6) of that section is |
| 72 | renumbered as subsection (7), and new subsection (6) is added to |
| 73 | that section, to read: |
| 74 | 736.1008 Limitations on proceedings against trustees.-- |
| 75 | (3) When a trustee has not issued a final trust accounting |
| 76 | or has not given written notice to the beneficiary of the |
| 77 | availability of the trust records for examination and that |
| 78 | claims with respect to matters not adequately disclosed may be |
| 79 | barred, a claim against the trustee for breach of trust based on |
| 80 | a matter not adequately disclosed in a trust disclosure document |
| 81 | accrues when the beneficiary has actual knowledge of the facts |
| 82 | upon which the claim is based and the trustee's repudiation of |
| 83 | the trust or adverse possession of trust assets, and is barred |
| 84 | as provided in chapter 95. |
| 85 | (6)(a) Notwithstanding subsections (1), (2), and (3), all |
| 86 | claims by a beneficiary against a trustee are barred upon the |
| 87 | later of: |
| 88 | 1. Ten years after the date the trust terminates, the |
| 89 | trustee resigns, or the fiduciary relationship between the |
| 90 | trustee and the beneficiary otherwise ends; or |
| 91 | 2. Twenty years after the date of the act or omission of |
| 92 | the trustee that is complained of. |
| 93 | (b) For purposes of this subsection, the failure of the |
| 94 | trustee to take corrective action shall not be construed as a |
| 95 | separate act or omission and shall not be construed to extend |
| 96 | the period of repose established by this subsection. |
| 97 | Section 4. This act shall take effect July 1, 2008. |