ENROLLED
       2016 Legislature      CS for CS for CS for SB 540, 1st Engrossed
       
       
       
       
       
       
                                                              2016540er
    1  
    2         An act relating to estates; creating s. 731.1055,
    3         F.S.; providing that the validity and the effect of a
    4         specified disposition of real property be determined
    5         by Florida law; amending s. 731.106, F.S.; conforming
    6         provisions to changes made by the act; amending s.
    7         732.201, F.S.; revising the right to elective share
    8         for a surviving spouse; providing legislative intent;
    9         amending s. 736.0802, F.S.; defining the term
   10         “pleading”; authorizing a trustee to pay attorney fees
   11         and costs from the assets of the trust without
   12         specified approval or court authorization in certain
   13         circumstances; requiring the trustee to serve a
   14         written notice of intent upon each qualified
   15         beneficiary of the trust before the payment is made;
   16         requiring the notice of intent to contain specified
   17         information and to be served in a specified manner;
   18         providing that specified qualified beneficiaries may
   19         be entitled to an order compelling the refund of a
   20         specified payment to the trust; requiring the court to
   21         award specified attorney fees and costs in certain
   22         circumstances; authorizing the court to prohibit a
   23         trustee from using trust assets to make a specified
   24         payment; authorizing the court to enter an order
   25         compelling the return of specified attorney fees and
   26         costs to the trust with interest at the statutory
   27         rate; requiring the court to deny a specified motion
   28         unless the court finds a reasonable basis to conclude
   29         that there has been a breach of the trust; authorizing
   30         a court to deny the motion if it finds good cause to
   31         do so; authorizing the movant to show that a
   32         reasonable basis exists, and a trustee to rebut the
   33         showing, through specified means; authorizing the
   34         court to impose such remedies or sanctions as it deems
   35         appropriate; providing that a trustee is authorized to
   36         use trust assets in a specified manner if a claim or
   37         defense of breach of trust is withdrawn, dismissed, or
   38         judicially resolved in a trial court without a
   39         determination that the trustee has committed a breach
   40         of trust; providing that specified proceedings,
   41         remedies, and rights are not limited; amending ss.
   42         736.0816 and 736.1007, F.S.; conforming provisions to
   43         changes made by the act; providing an effective date.
   44          
   45  Be It Enacted by the Legislature of the State of Florida:
   46  
   47         Section 1. Section 731.1055, Florida Statutes, is created
   48  to read:
   49         731.1055 Disposition of real property.—The validity and
   50  effect of a disposition, whether intestate or testate, of real
   51  property in this state shall be determined by Florida law.
   52         Section 2. Subsection (2) of section 731.106, Florida
   53  Statutes, is amended to read:
   54         731.106 Assets of nondomiciliaries.—
   55         (2) When a nonresident decedent, whether or not a citizen
   56  of the United States, provides by will that the testamentary
   57  disposition of tangible or intangible personal property having a
   58  situs within this state, or of real property in this state,
   59  shall be construed and regulated by the laws of this state, the
   60  validity and effect of the dispositions shall be determined by
   61  Florida law. The court may, and in the case of a decedent who
   62  was at the time of death a resident of a foreign country the
   63  court shall, direct the personal representative appointed in
   64  this state to make distribution directly to those designated by
   65  the decedent’s will as beneficiaries of the tangible or
   66  intangible property or to the persons entitled to receive the
   67  decedent’s personal estate under the laws of the decedent’s
   68  domicile.
   69         Section 3. Section 732.201, Florida Statutes, is amended to
   70  read:
   71         732.201 Right to elective share.—The surviving spouse of a
   72  person who dies domiciled in Florida has the right to a share of
   73  the elective estate of the decedent as provided in this part, to
   74  be designated the elective share. The election does not reduce
   75  what the spouse receives if the election were not made and the
   76  spouse is not treated as having predeceased the decedent.
   77         Section 4. It is the intent of the Legislature that the
   78  amendment to s. 732.201, Florida Statutes, made by this act is
   79  to clarify existing law.
   80         Section 5. Subsection (10) of section 736.0802, Florida
   81  Statutes, is amended to read:
   82         736.0802 Duty of loyalty.—
   83         (10) Unless otherwise provided in this subsection, payment
   84  of costs or attorney attorney’s fees incurred in any proceeding
   85  from the assets of the trust may be made by a the trustee from
   86  assets of the trust without the approval of any person and
   87  without court authorization, unless the court orders otherwise
   88  as provided in ss. 736.0816(20) and 736.1007(1) paragraph (b).
   89         (a) As used in this subsection, the term “pleading” means a
   90  pleading as defined in Rule 1.100 of the Florida Rules of Civil
   91  Procedure.
   92         (b) If a trustee incurs attorney fees or costs in
   93  connection with a claim or defense of breach of trust which is
   94  made in a filed pleading, the trustee may pay such attorney fees
   95  or costs from trust assets without the approval of any person
   96  and without any court authorization. However, the trustee must
   97  serve a written notice of intent upon each qualified beneficiary
   98  of the trust whose share of the trust may be affected by the
   99  payment before such payment is made. The notice of intent does
  100  not need to be served upon a qualified beneficiary whose
  101  identity or location is unknown to, and not reasonably
  102  ascertainable by, the trustee.
  103         (c) The notice of intent must identify the judicial
  104  proceeding in which the claim or defense of breach of trust has
  105  been made in a filed pleading and must inform the person served
  106  of his or her right under paragraph (e) to apply to the court
  107  for an order prohibiting the trustee from using trust assets to
  108  pay attorney fees or costs as provided in paragraph (b) or
  109  compelling the return of such attorney fees and costs to the
  110  trust. The notice of intent must be served by any commercial
  111  delivery service or form of mail requiring a signed receipt; the
  112  manner provided in the Florida Rules of Civil Procedure for
  113  service of process; or, as to any party over whom the court has
  114  already acquired jurisdiction in that judicial proceeding, in
  115  the manner provided for service of pleadings and other documents
  116  by the Florida Rules of Civil Procedure.
  117         (d)If a trustee has used trust assets to pay attorney fees
  118  or costs described in paragraph (b) before service of a notice
  119  of intent, any qualified beneficiary who is not barred under s.
  120  736.1008 and whose share of the trust may have been affected by
  121  such payment is entitled, upon the filing of a motion to compel
  122  the return of such payment to the trust, to an order compelling
  123  the return of such payment, with interest at the statutory rate.
  124  The court shall award attorney fees and costs incurred in
  125  connection with the motion to compel as provided in s. 736.1004.
  126         (e)Upon the motion of any qualified beneficiary who is not
  127  barred under s. 736.1008 and whose share of the trust may be
  128  affected by the use of trust assets to pay attorney fees or
  129  costs as provided in paragraph (b), the court may prohibit the
  130  trustee from using trust assets to make such payment and, if
  131  such payment has been made from trust assets after service of a
  132  notice of intent, the court may enter an order compelling the
  133  return of the attorney fees and costs to the trust, with
  134  interest at the statutory rate. In connection with any hearing
  135  on a motion brought under this paragraph:
  136         1. The court shall deny the motion unless it finds a
  137  reasonable basis to conclude that there has been a breach of
  138  trust. If the court finds there is a reasonable basis to
  139  conclude there has been a breach of trust, the court may still
  140  deny the motion if it finds good cause to do so.
  141         2. The movant may show that such reasonable basis exists,
  142  and the trustee may rebut any such showing by presenting
  143  affidavits, answers to interrogatories, admissions, depositions,
  144  and any evidence otherwise admissible under the Florida Evidence
  145  Code.
  146         (f) If a trustee fails to comply with an order of the court
  147  prohibiting the use of trust assets to pay attorney fees or
  148  costs described in paragraph (b) or fails to comply with an
  149  order compelling that such payment be refunded to the trust, the
  150  court may impose such remedies or sanctions as the court deems
  151  appropriate, including, without limitation, striking the
  152  defenses or pleadings filed by the trustee.
  153         (g) Notwithstanding the entry of an order prohibiting the
  154  use of trust assets to pay attorney fees and costs as provided
  155  in paragraph (b), or compelling the return of such attorney fees
  156  or costs, if a claim or defense of breach of trust is withdrawn,
  157  dismissed, or judicially resolved in the trial court without a
  158  determination that the trustee has committed a breach of trust,
  159  the trustee is authorized to use trust assets to pay attorney
  160  fees and costs as provided in paragraph (b) and may do so
  161  without service of a notice of intent or order of the court. The
  162  attorney fees and costs may include fees and costs that were
  163  refunded to the trust pursuant to an order of the court.
  164         (h) This subsection does not limit proceedings under s.
  165  736.0206 or remedies for breach of trust under s. 736.1001, or
  166  the right of any interested person to challenge or object to the
  167  payment of compensation or costs from the trust.
  168         (a) If a claim or defense based upon a breach of trust is
  169  made against a trustee in a proceeding, the trustee shall
  170  provide written notice to each qualified beneficiary of the
  171  trust whose share of the trust may be affected by the payment of
  172  attorney’s fees and costs of the intention to pay costs or
  173  attorney’s fees incurred in the proceeding from the trust prior
  174  to making payment. The written notice shall be delivered by
  175  sending a copy by any commercial delivery service requiring a
  176  signed receipt, by any form of mail requiring a signed receipt,
  177  or as provided in the Florida Rules of Civil Procedure for
  178  service of process. The written notice shall inform each
  179  qualified beneficiary of the trust whose share of the trust may
  180  be affected by the payment of attorney’s fees and costs of the
  181  right to apply to the court for an order prohibiting the trustee
  182  from paying attorney’s fees or costs from trust assets. If a
  183  trustee is served with a motion for an order prohibiting the
  184  trustee from paying attorney’s fees or costs in the proceeding
  185  and the trustee pays attorney’s fees or costs before an order is
  186  entered on the motion, the trustee and the trustee’s attorneys
  187  who have been paid attorney’s fees or costs from trust assets to
  188  defend against the claim or defense are subject to the remedies
  189  in paragraphs (b) and (c).
  190         (b) If a claim or defense based upon breach of trust is
  191  made against a trustee in a proceeding, a party must obtain a
  192  court order to prohibit the trustee from paying costs or
  193  attorney’s fees from trust assets. To obtain an order
  194  prohibiting payment of costs or attorney’s fees from trust
  195  assets, a party must make a reasonable showing by evidence in
  196  the record or by proffering evidence that provides a reasonable
  197  basis for a court to conclude that there has been a breach of
  198  trust. The trustee may proffer evidence to rebut the evidence
  199  submitted by a party. The court in its discretion may defer
  200  ruling on the motion, pending discovery to be taken by the
  201  parties. If the court finds that there is a reasonable basis to
  202  conclude that there has been a breach of trust, unless the court
  203  finds good cause, the court shall enter an order prohibiting the
  204  payment of further attorney’s fees and costs from the assets of
  205  the trust and shall order attorney’s fees or costs previously
  206  paid from assets of the trust to be refunded. An order entered
  207  under this paragraph shall not limit a trustee’s right to seek
  208  an order permitting the payment of some or all of the attorney’s
  209  fees or costs incurred in the proceeding from trust assets,
  210  including any fees required to be refunded, after the claim or
  211  defense is finally determined by the court. If a claim or
  212  defense based upon a breach of trust is withdrawn, dismissed, or
  213  resolved without a determination by the court that the trustee
  214  committed a breach of trust after the entry of an order
  215  prohibiting payment of attorney’s fees and costs pursuant to
  216  this paragraph, the trustee may pay costs or attorney’s fees
  217  incurred in the proceeding from the assets of the trust without
  218  further court authorization.
  219         (c) If the court orders a refund under paragraph (b), the
  220  court may enter such sanctions as are appropriate if a refund is
  221  not made as directed by the court, including, but not limited
  222  to, striking defenses or pleadings filed by the trustee. Nothing
  223  in this subsection limits other remedies and sanctions the court
  224  may employ for the failure to refund timely.
  225         (d) Nothing in this subsection limits the power of the
  226  court to review fees and costs or the right of any interested
  227  persons to challenge fees and costs after payment, after an
  228  accounting, or after conclusion of the litigation.
  229         (e) Notice under paragraph (a) is not required if the
  230  action or defense is later withdrawn or dismissed by the party
  231  that is alleging a breach of trust or resolved without a
  232  determination by the court that the trustee has committed a
  233  breach of trust.
  234         Section 6. Subsection (20) of section 736.0816, Florida
  235  Statutes, is amended to read:
  236         736.0816 Specific powers of trustee.—Except as limited or
  237  restricted by this code, a trustee may:
  238         (20) Employ persons, including, but not limited to,
  239  attorneys, accountants, investment advisers, or agents, even if
  240  they are the trustee, an affiliate of the trustee, or otherwise
  241  associated with the trustee, to advise or assist the trustee in
  242  the exercise of any of the trustee’s powers and pay reasonable
  243  compensation and costs incurred in connection with such
  244  employment from the assets of the trust, subject to s.
  245  736.0802(10) with respect to attorney fees and costs, and act
  246  without independent investigation on the recommendations of such
  247  persons.
  248         Section 7. Subsection (1) of section 736.1007, Florida
  249  Statutes, is amended to read:
  250         736.1007 Trustee’s attorney’s fees.—
  251         (1) If the trustee of a revocable trust retains an attorney
  252  to render legal services in connection with the initial
  253  administration of the trust, the attorney is entitled to
  254  reasonable compensation for those legal services, payable from
  255  the assets of the trust, subject to s. 736.0802(10), without
  256  court order. The trustee and the attorney may agree to
  257  compensation that is determined in a manner or amount other than
  258  the manner or amount provided in this section. The agreement is
  259  not binding on a person who bears the impact of the compensation
  260  unless that person is a party to or otherwise consents to be
  261  bound by the agreement. The agreement may provide that the
  262  trustee is not individually liable for the attorney attorney’s
  263  fees and costs.
  264         Section 8. This act shall take effect July 1, 2016.