Florida Senate - 2009                      CS for CS for SB 1958
       
       
       
       By the Committees on Banking and Insurance; and Judiciary; and
       Senator Gelber
       
       
       
       597-04113-09                                          20091958c2
    1                        A bill to be entitled                      
    2         An act relating to trust administration; amending s.
    3         736.0103, F.S.; redefining the term “beneficiary” to
    4         include a person having certain beneficial interests;
    5         providing for construction; amending s. 736.0105,
    6         F.S.; providing an additional limitation on terms of a
    7         trust prevailing over provisions of the Florida Trust
    8         Code; amending s. 736.0302, F.S.; revising
    9         representation authority for holders of a power of
   10         appointment; providing a definition; amending s.
   11         736.0306, F.S.; authorizing trust instruments to
   12         authorize certain persons to designate one or more
   13         persons to represent and bind a beneficiary and
   14         receive certain information; amending s. 736.0703,
   15         F.S.; authorizing a trustee to delegate investment
   16         functions to a cotrustee; providing an exception to
   17         circumstances under which an excluded trustee is
   18         otherwise not liable for the consequences of certain
   19         action; amending s. 736.0807, F.S.; expanding the list
   20         of powers and duties that may be delegated by a
   21         trustee; exempting a trustee who complies with certain
   22         provisions of state law from liability for the actions
   23         of an agent to whom a function was delegated; amending
   24         s. 736.1106, F.S.; clarifying the definition of the
   25         term “distribution date” to specify the time at which
   26         the right to possession or enjoyment arises; providing
   27         an effective date.
   28  
   29  Be It Enacted by the Legislature of the State of Florida:
   30  
   31         Section 1. Subsection (4) of section 736.0103, Florida
   32  Statutes, is amended to read:
   33         736.0103 Definitions.—Unless the context otherwise
   34  requires, in this code:
   35         (4) “Beneficiary” means a person who:
   36         (a) has a present or future beneficial interest in a trust,
   37  vested or contingent,; or
   38         (b)a person who holds a power of appointment over trust
   39  property in a capacity other than that of trustee. An interest
   40  as a permissible appointee of a power of appointment, held by a
   41  person in a capacity other than that of trustee, is not a
   42  beneficial interest for purposes of this subsection. Upon an
   43  irrevocable exercise of a power of appointment, the interest of
   44  a person in whose favor the appointment is made shall be
   45  considered a present or future beneficial interest in a trust in
   46  the same manner as if the interest had been included in the
   47  trust instrument.
   48         Section 2. Paragraph (f) of subsection (2) of section
   49  736.0105, Florida Statutes, is amended to read:
   50         736.0105 Default and mandatory rules.—
   51         (2) The terms of a trust prevail over any provision of this
   52  code except:
   53         (f) The requirements under s. 736.0108(1) for the
   54  designation of a principal place of administration of the trust
   55  and the requirements under s. 736.0107 for the designation of a
   56  jurisdiction the law of which determines the meaning and effect
   57  of the terms of a trust.
   58         Section 3. Section 736.0302, Florida Statutes, is amended
   59  to read:
   60         736.0302 Representation by holder of power of appointment.—
   61         (1) The holder of a power of appointment may represent and
   62  bind persons whose interests, as permissible appointees, takers
   63  in default, or otherwise, are subject to the power.
   64         (2)The takers in default of the exercise of a power of
   65  appointment may represent and bind persons whose interests, as
   66  permissible appointees, are subject to the power.
   67         (3)(2) Subsection (1) does not apply to:
   68         (a) Any matter determined by the court to involve fraud or
   69  bad faith by the trustee;
   70         (b)A power of a trustee to distribute trust property; or
   71         (b)(c) A power of appointment held by a person while the
   72  person is the sole trustee.
   73         (4)As used in this section, the term “power of
   74  appointment” does not include a power of a trustee to make
   75  discretionary distributions of trust property.
   76         Section 4. Subsection (1) of section 736.0306, Florida
   77  Statutes, is amended to read:
   78         736.0306 Designated representative.—
   79         (1) If specifically nominated authorized in the trust
   80  instrument, one or more persons may be designated to represent
   81  and bind a beneficiary and receive any notice, information,
   82  accounting, or report. The trust instrument may also authorize
   83  any person or persons, other than a trustee of the trust, to
   84  designate one or more persons to represent and bind a
   85  beneficiary and receive any notice, information, accounting, or
   86  report.
   87         Section 5. Subsections (5) and (9) of section 736.0703,
   88  Florida Statutes, are amended to read:
   89         736.0703 Cotrustees.—
   90         (5) A cotrustee may not delegate to another cotrustee the
   91  performance of a function the settlor reasonably expected the
   92  cotrustees to perform jointly, except that a trustee may
   93  delegate investment functions to a cotrustee pursuant to, and in
   94  compliance with, s. 518.112. A cotrustee may revoke a delegation
   95  previously made.
   96         (9) If the terms of a trust instrument provide for the
   97  appointment of more than one trustee but confer upon one or more
   98  of the trustees, to the exclusion of the others, the power to
   99  direct or prevent specified actions of the trustees, the
  100  excluded trustees shall act in accordance with the exercise of
  101  the power. Except in cases of willful misconduct on the part of
  102  the directed trustee having the authority to direct or prevent
  103  actions of the trustees of which the excluded trustee has actual
  104  knowledge, an excluded trustee is not liable, individually or as
  105  a fiduciary, for any consequence that results from compliance
  106  with the exercise of the power, regardless of the information
  107  available to the excluded trustees. The excluded trustees are
  108  relieved of any obligation to review, inquire, investigate, or
  109  make recommendations or evaluations with respect to the exercise
  110  of the power. The trustee or trustees having the power to direct
  111  or prevent actions of the trustees shall be liable to the
  112  beneficiaries with respect to the exercise of the power as if
  113  the excluded trustees were not in office and shall have the
  114  exclusive obligation to account to and to defend any action
  115  brought by the beneficiaries with respect to the exercise of the
  116  power.
  117         Section 6. Subsections (1) and (3) of section 736.0807,
  118  Florida Statutes, are amended to read:
  119         736.0807 Delegation by trustee.—
  120         (1) A trustee may delegate duties and powers that a prudent
  121  trustee of comparable skills could properly delegate under the
  122  circumstances, including investment functions pursuant to s.
  123  518.112. The trustee shall exercise reasonable care, skill, and
  124  caution in:
  125         (a) Selecting an agent.
  126         (b) Establishing the scope and terms of the delegation,
  127  consistent with the purposes and terms of the trust.
  128         (c) Reviewing the agent’s actions periodically, in order to
  129  monitor the agent’s performance and compliance with the terms of
  130  the delegation.
  131         (3) A trustee who complies with subsection (1) and, when
  132  investment functions are delegated, s. 518.112 is not liable to
  133  the beneficiaries or to the trust for an action of the agent to
  134  whom the function was delegated.
  135         Section 7. Paragraph (b) of subsection (1) of section
  136  736.1106, Florida Statutes, is amended to read:
  137         736.1106 Antilapse; survivorship with respect to future
  138  interests under terms of inter vivos and testamentary trusts;
  139  substitute takers.—
  140         (1) As used in this section, the term:
  141         (b) “Distribution date,” with respect to a future interest,
  142  means the time when the future interest is to take effect in
  143  possession or enjoyment. The distribution date need not occur at
  144  the beginning or end of a calendar day, but can occur at a time
  145  during the course of a day. The distribution date refers to the
  146  time at which the right to possession or enjoyment arises and is
  147  not necessarily the time at which any benefit of the right is
  148  realized.
  149         Section 8. This act shall take effect July 1, 2009.