Florida Senate - 2021 SENATOR AMENDMENT
Bill No. CS for CS for SB 1070
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LEGISLATIVE ACTION
Senate . House
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Floor: 1/AD/2R .
04/21/2021 10:55 AM .
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Senator Berman moved the following:
1 Senate Amendment
2
3 Delete lines 862 - 1063
4 and insert:
5 (b) Entry of a decree of legal separation maintenance by a
6 court of competent jurisdiction in another state that recognizes
7 legal separation or maintenance under its laws.
8 (5) “During marriage” means a period that begins at
9 marriage and ends upon the dissolution of marriage or upon the
10 death of a spouse.
11 (6) “Qualified trustee” means either:
12 (a) A natural person who is a resident of the state; or
13 (b) A company authorized to act as a trustee in the state.
14
15 A qualified trustee’s powers include, but are not limited to,
16 maintaining records for the trust on an exclusive or a
17 nonexclusive basis and preparing or arranging for the
18 preparation of, on an exclusive or a nonexclusive basis, any
19 income tax returns that must be filed by the trust.
20 (7) “Settlor spouses” means a married couple who
21 establishes a community property trust pursuant to this part.
22 Section 31. Section 736.1503, Florida Statutes, is created
23 to read:
24 736.1503 Requirements for community property trust.—An
25 arrangement is a community property trust if one or both settlor
26 spouses transfer property to a trust that:
27 (1) Expressly declares that the trust is a community
28 property trust within the meaning of this part.
29 (2) Has at least one trustee who is a qualified trustee,
30 provided that both spouses or either spouse also may be a
31 trustee.
32 (3) Is signed by both settlor spouses consistent with the
33 formalities required for the execution of a trust under this
34 chapter.
35 (4) Contains substantially the following language in
36 capital letters at the beginning of the community property trust
37 agreement:
38
39 THE CONSEQUENCES OF THIS COMMUNITY PROPERTY TRUST MAY
40 BE VERY EXTENSIVE, INCLUDING, BUT NOT LIMITED TO, YOUR
41 RIGHTS WITH RESPECT TO CREDITORS AND OTHER THIRD
42 PARTIES, AND YOUR RIGHTS WITH YOUR SPOUSE DURING THE
43 COURSE OF YOUR MARRIAGE, AT THE TIME OF A DIVORCE, AND
44 UPON THE DEATH OF YOU OR YOUR SPOUSE. ACCORDINGLY,
45 THIS TRUST AGREEMENT SHOULD BE SIGNED ONLY AFTER
46 CAREFUL CONSIDERATION. IF YOU HAVE ANY QUESTIONS ABOUT
47 THIS TRUST AGREEMENT, YOU SHOULD SEEK COMPETENT AND
48 INDEPENDENT LEGAL ADVICE. ALTHOUGH NOT A REQUIREMENT,
49 IT IS STRONGLY ADVISABLE THAT EACH SPOUSE OBTAIN THEIR
50 OWN SEPARATE LEGAL COUNSEL PRIOR TO THE EXECUTION OF
51 THIS TRUST.
52
53 Section 32. Section 736.1504, Florida Statutes, is created
54 to read:
55 736.1504 Agreement establishing community property trust;
56 amendments and revocation.—
57 (1) In the agreement establishing a community property
58 trust, the settlor spouses may agree upon:
59 (a) The rights and obligations in the property transferred
60 to the trust, notwithstanding when and where the property is
61 acquired or located.
62 (b) The management and control of the property transferred
63 into the trust.
64 (c) The disposition of the property transferred to the
65 trust on dissolution, death, or the occurrence or nonoccurrence
66 of another event, subject to ss. 736.1507 and 736.1508.
67 (d) Whether the trust is revocable or irrevocable.
68 (e) Any other matter that affects the property transferred
69 to the trust and does not violate public policy or general law
70 imposing a criminal penalty, or result in the property not being
71 treated as community property under the laws of a relevant
72 jurisdiction.
73 (2) In the event of the death of a settlor spouse, the
74 surviving spouse may amend a community property trust regarding
75 the disposition of that spouse’s one-half share of the community
76 property, regardless of whether the agreement provides that the
77 community property trust is irrevocable.
78 (3) A community property trust may be amended or revoked by
79 the settlor spouses unless the agreement itself specifically
80 provides that the community property trust is irrevocable.
81 (4) Notwithstanding any other provision of this code, the
82 settlor spouses shall be deemed to be the only qualified
83 beneficiaries of a community property trust until the death of
84 one of the settlor spouses, regardless of whether the trust is
85 revocable or irrevocable. After the death of one of the settlor
86 spouses, the surviving spouse shall be deemed to be the only
87 qualified beneficiary as to his or her share of the community
88 property trust.
89 Section 33. Section 736.1505, Florida Statutes, is created
90 to read:
91 736.1505 Classification of property as community property;
92 enforcement; duration; management and control; effect of
93 distributions.—
94 (1) Whether both, one, or neither is domiciled in the
95 state, settlor spouses may classify any or all of their property
96 as community property by transferring that property to a
97 community property trust and providing in the trust that the
98 property is community property pursuant to this part.
99 (2) A community property trust is enforceable without
100 consideration.
101 (3) All property owned by a community property trust is
102 community property under the laws of the state during the
103 marriage of the settlor spouses.
104 (4) The right to manage and control property that is
105 transferred to a community property trust is determined by the
106 terms of the trust agreement.
107 (5) When property is distributed from a community property
108 trust, the property shall no longer constitute community
109 property within the meaning of this part, provided that
110 community property as classified by a jurisdiction other than
111 the state retains its character as community property to the
112 extent otherwise provided by ss. 732.216-732.228.
113 Section 34. Section 736.1506, Florida Statutes, is created
114 to read:
115 736.1506 Satisfaction of obligations.—Except as provided in
116 s. 4, Art. X of the State Constitution:
117 (1) An obligation solely incurred by one settlor spouse
118 before or during the marriage may be satisfied from that settlor
119 spouse’s one-half share of a community property trust, unless
120 otherwise provided in the community property trust agreement.
121 (2) An obligation incurred by both spouses during the
122 marriage may be satisfied from a community property trust of the
123 settlor spouses.
124 Section 35. Section 736.1507, Florida Statutes, is created
125 to read:
126 736.1507 Death of a spouse.—Upon the death of a spouse,
127 one-half of the aggregate value of the property held in a
128 community property trust established by the settlor spouses
129 reflects the share of the surviving spouse and is not subject to
130 testamentary disposition by the decedent spouse or distribution
131 under the laws of succession of the state. The other one-half of
132 the value of that property reflects the share of the decedent
133 spouse and is subject to testamentary disposition or
134 distribution under the laws of succession of the state. Unless
135 provided otherwise in the community property trust agreement,
136 the trustee has the power to distribute assets of the trust in
137 divided or undivided interests and to adjust resulting
138 differences in valuation. A distribution in kind may be made on
139 the basis of a non-pro rata division of the aggregate value of
140 the trust assets, on the basis of a pro rata division of each
141 individual asset, or by using both methods. The decedent’s
142 spouse’s one-half share shall not be included in the elective
143 estate.
144 Section 36. Section 736.1508, Florida Statutes, is created
145 to read:
146 736.1508 Dissolution of marriage.—
147 (1) Upon the dissolution of the marriage of the settlor
148 spouses, the community property trust shall terminate and the
149 trustee shall distribute one-half of the trust assets to each
150 spouse in accordance with subsection (3). For purposes of this
151 act, s. 61.075 does not apply to the disposition of the assets
152 and liabilities held in a community property trust.
153 (2) The initiation of an action to dissolve the settlor
154 spouses’ marriage does not automatically terminate the community
155 property trust unless otherwise agreed to by the settlor spouses
156 in writing or otherwise ordered by the court having jurisdiction
157 over the dissolution proceedings between the settlor spouses.
158 However, if an action to dissolve the settlor spouses’ marriage
159 remains pending for 180 days, the trust automatically terminates
160 and the trustee must distribute one-half of the trust assets to
161 each spouse in accordance with subsection (3), unless any of the
162 following apply:
163 (a) A settlor spouse objects to the termination within 180
164 days following the filing of the dissolution action. At which
165 time, either party may request that the court having
166 jurisdiction over the dissolution proceedings between the
167 settlor spouses determine if good cause exists to terminate the
168 community property trust during the pendency of the dissolution
169 of marriage action.
170 (b) The court having jurisdiction over the dissolution
171 proceedings between the settlor spouses enters an order
172 directing otherwise.
173 (c) The settlor spouses otherwise agree, in writing, while
174 the dissolution of marriage action is pending.
175 (d) The community property trust agreement provides
176 otherwise.
177 (3) Unless provided otherwise in the community property
178 trust agreement, the trustee has the power to distribute assets
179 of the trust in divided or undivided interests and to adjust
180 resulting differences in valuation. A distribution in kind may
181 be made on the basis of a non-pro rata division of the aggregate
182 value of the trust assets, on the basis of a pro rata division
183 of each individual asset, or by using both methods. A trustee
184 may not distribute real property or business interests in a
185 manner that would leave the settlor spouses as co-owners of such
186 assets post dissolution of the settlor spouses’ marriage or
187 termination of the community property trust, unless otherwise
188 agreed to by the settlor spouses in a separate written agreement
189 executed during the dissolution of marriage action.
190 Notwithstanding any other provision of this section, the
191 community property trust agreement cannot be terminated, and the
192 assets cannot be distributed, in a manner that could cause the
193 trust assets to not be treated as community property.
194 (4) The court having jurisdiction over the dissolution
195 proceedings between the settlor spouses has personal and subject
196 matter jurisdiction over the settlor spouses and the trustee of
197 the community property trust for the purpose of effectuating the
198 distribution of the community property trust assets consistent
199 with the terms of the community property trust agreement, in a
200 manner ensuring that the trust assets retain their community
201 property character.
202 Section 37. Section 736.1509, Florida Statutes, is created
203 to read:
204 736.1509 Right of child to support.—A community property
205 trust does not adversely affect the right of a child of the
206 settlor spouses to support, pursuant to s. 61.30 or the
207 applicable law of another jurisdiction, that either spouse would
208 be required to give under the applicable laws of the settlor
209 spouses’ state of domicile.
210 Section 38. Section 736.151, Florida Statutes, is created
211 to read:
212 736.151 Homestead property.—
213 (1) Property that is transferred to or acquired subject to
214 a community property trust may continue to qualify or may
215 initially qualify as the settlor spouses’ homestead within the
216 meaning of s. 4(a)(1), Art. X of the State Constitution and for
217 all purposes of general law, provided that the property would
218 qualify as the settlor spouses’ homestead if title was held in
219 one or both of the settlor spouses’ individual names.
220 (2) The settlor spouses shall be deemed to have beneficial
221 title in equity to the homestead property held subject to a
222 community property trust for all purposes, including for
223 purposes of s. 196.031.
224 Section 39. Section 736.1511, Florida Statutes, is created
225 to read:
226 736.1511 Application of Internal Revenue Code; community
227 property classified by another jurisdiction.—For purposes of the
228 application of s. 1014(b)(6) of the Internal Revenue Code of
229 1986, 26 U.S.C. s. 1014(b)(6), as of January 1, 2021, a
230 community property trust is considered a trust established under
231 the community property laws of the state. Community property, as
232 classified by a jurisdiction other than this state, which is
233 transferred to a community property trust retains its character
234 as community property while in the trust. If the trust is
235 revoked and property is transferred on revocation of the trust,
236 the community property as classified by a jurisdiction other
237 than the state retains its character as community property to
238 the extent otherwise provided by ss. 732.216-732.228.
239 Section 40. Section 736.1512, Florida Statutes, is created
240 to read:
241 736.1512 Unenforceable trusts.—
242 (1) A community property trust executed during marriage is
243 not enforceable if the spouse against whom enforcement is sought
244 proves that:
245 (a) The trust was unconscionable when made;
246 (b) The spouse against whom enforcement is sought did not
247 execute the community property trust agreement voluntarily;
248 (c) The community property trust agreement was the product
249 of fraud, duress, coercion, or overreaching; or
250 (d) Before execution of the community property trust
251 agreement, the spouse against whom enforcement is sought:
252 1. Was not given a fair and reasonable disclosure of the
253 property and financial obligations of the other spouse.
254 2. Did not voluntarily sign a written waiver expressly
255 waiving right to disclosure of the property and financial
256 obligations of the other spouse beyond the disclosure provided.
257 3. Did not have notice of the property or financial
258 obligations of the other spouse.
259 (2) Whether a community property trust is unconscionable
260 shall be determined by a court as a matter of law.
261 (3) A community property trust may not be deemed
262 unenforceable solely on the fact that the settlor spouses did
263 not have separate legal representation when executing the
264 community property trust agreement.