Florida Senate - 2021 CS for SB 954
By the Committee on Judiciary; and Senator Bean
590-02877-21 2021954c1
1 A bill to be entitled
2 An act relating to attorney compensation; amending s.
3 733.6171, F.S.; requiring an attorney who accepts
4 certain engagements to obtain a fee disclosure
5 statement signed by the person responsible for
6 administering an estate; requiring that such
7 disclosure statement contain certain statements;
8 deleting provisions relating to the determination of
9 reasonable compensation for attorneys of personal
10 representatives; deleting provisions relating to
11 petitions to increase or decrease compensation for
12 such attorneys; amending s. 736.1007, F.S.; deleting
13 provisions relating to the determination of reasonable
14 compensation for attorneys of trustees; deleting
15 provisions relating to petitions to increase or
16 decrease compensation for such attorneys; amending ss.
17 733.106 and 736.1005, F.S.; conforming provisions to
18 changes made by the act; providing an effective date.
19
20 Be It Enacted by the Legislature of the State of Florida:
21
22 Section 1. Section 733.6171, Florida Statutes, is amended
23 to read:
24 733.6171 Compensation of attorney for the personal
25 representative.—
26 (1) Attorneys for personal representatives are shall be
27 entitled to reasonable compensation payable from the estate
28 assets without court order. An attorney accepting an engagement
29 to represent an estate in probate or other administration must
30 obtain a fee disclosure statement signed by the person
31 responsible for administering the estate. Such statement must
32 specify all of the following:
33 (a) The attorney fee for representing the estate in probate
34 matters is not set by law and is not required to be based on the
35 size of the estate.
36 (b) The fee is subject to negotiation between the personal
37 representative and the attorney.
38 (c) The selection of the attorney to represent the estate
39 is at the discretion of the personal representative, and the
40 personal representative is not required to select the attorney
41 who drafted the will.
42 (2) The attorney, the personal representative, and persons
43 bearing the impact of the compensation may agree to compensation
44 determined in a different manner than provided in this section.
45 Compensation may also be determined in a different manner than
46 provided in this section if the manner is disclosed to the
47 parties bearing the impact of the compensation and if no
48 objection is made as provided for in the Florida Probate Rules.
49 (3) Compensation for ordinary services of attorneys in
50 formal estate administration is presumed to be reasonable if
51 based on the compensable value of the estate, which is the
52 inventory value of the probate estate assets and the income
53 earned by the estate during the administration as provided in
54 the following schedule:
55 (a) One thousand five hundred dollars for estates having a
56 value of $40,000 or less.
57 (b) An additional $750 for estates having a value of more
58 than $40,000 and not exceeding $70,000.
59 (c) An additional $750 for estates having a value of more
60 than $70,000 and not exceeding $100,000.
61 (d) For estates having a value in excess of $100,000, at
62 the rate of 3 percent on the next $900,000.
63 (e) At the rate of 2.5 percent for all above $1 million and
64 not exceeding $3 million.
65 (f) At the rate of 2 percent for all above $3 million and
66 not exceeding $5 million.
67 (g) At the rate of 1.5 percent for all above $5 million and
68 not exceeding $10 million.
69 (h) At the rate of 1 percent for all above $10 million.
70 (4) In addition to fees for ordinary services, the attorney
71 for the personal representative shall be allowed further
72 reasonable compensation for any extraordinary service. What is
73 an extraordinary service may vary depending on many factors,
74 including the size of the estate. Extraordinary services may
75 include, but are not limited to:
76 (a) Involvement in a will contest, will construction, a
77 proceeding for determination of beneficiaries, a contested
78 claim, elective share proceeding, apportionment of estate taxes,
79 or any adversarial proceeding or litigation by or against the
80 estate.
81 (b) Representation of the personal representative in audit
82 or any proceeding for adjustment, determination, or collection
83 of any taxes.
84 (c) Tax advice on postmortem tax planning, including, but
85 not limited to, disclaimer, renunciation of fiduciary
86 commission, alternate valuation date, allocation of
87 administrative expenses between tax returns, the QTIP or reverse
88 QTIP election, allocation of GST exemption, qualification for
89 Internal Revenue Code ss. 6166 and 303 privileges, deduction of
90 last illness expenses, fiscal year planning, distribution
91 planning, asset basis considerations, handling income or
92 deductions in respect of a decedent, valuation discounts,
93 special use and other valuation, handling employee benefit or
94 retirement proceeds, prompt assessment request, or request for
95 release of personal liability for payment of tax.
96 (d) Review of estate tax return and preparation or review
97 of other tax returns required to be filed by the personal
98 representative.
99 (e) Preparation of the estate’s federal estate tax return.
100 If this return is prepared by the attorney, a fee of one-half of
101 1 percent up to a value of $10 million and one-fourth of 1
102 percent on the value in excess of $10 million of the gross
103 estate as finally determined for federal estate tax purposes, is
104 presumed to be reasonable compensation for the attorney for this
105 service. These fees shall include services for routine audit of
106 the return, not beyond the examining agent level, if required.
107 (f) Purchase, sale, lease, or encumbrance of real property
108 by the personal representative or involvement in zoning, land
109 use, environmental, or other similar matters.
110 (g) Legal advice regarding carrying on of the decedent’s
111 business or conducting other commercial activity by the personal
112 representative.
113 (h) Legal advice regarding claims for damage to the
114 environment or related procedures.
115 (i) Legal advice regarding homestead status of real
116 property or proceedings involving that status and services
117 related to protected homestead.
118 (j) Involvement in fiduciary, employee, or attorney
119 compensation disputes.
120 (k) Proceedings involving ancillary administration of
121 assets not subject to administration in this state.
122 (5) Upon petition of any interested person, the court may
123 increase or decrease the compensation for ordinary services of
124 the attorney or award compensation for extraordinary services if
125 the facts and circumstances of the particular administration
126 warrant. In determining reasonable compensation, the court shall
127 consider all of the following factors, giving weight to each as
128 it determines to be appropriate:
129 (a) The promptness, efficiency, and skill with which the
130 administration was handled by the attorney.
131 (b) The responsibilities assumed by and the potential
132 liabilities of the attorney.
133 (c) The nature and value of the assets that are affected by
134 the decedent’s death.
135 (d) The benefits or detriments resulting to the estate or
136 interested persons from the attorney’s services.
137 (e) The complexity or simplicity of the administration and
138 the novelty of issues presented.
139 (f) The attorney’s participation in tax planning for the
140 estate and the estate’s beneficiaries and tax return
141 preparation, review, or approval.
142 (g) The nature of the probate, nonprobate, and exempt
143 assets, the expenses of administration, the liabilities of the
144 decedent, and the compensation paid to other professionals and
145 fiduciaries.
146 (h) Any delay in payment of the compensation after the
147 services were furnished.
148 (i) Any other relevant factors.
149 (2)(6) If a separate written agreement regarding
150 compensation exists between the attorney and the decedent, the
151 attorney must shall furnish a copy to the personal
152 representative prior to commencement of employment, and, if
153 employed, must shall promptly file and serve a copy on all
154 interested persons. Neither A separate agreement or nor a
155 provision in the will suggesting or directing that the personal
156 representative retain a specific attorney does not will obligate
157 the personal representative to employ the attorney or obligate
158 the attorney to accept the representation, but if the attorney
159 who is a party to the agreement or who drafted the will is
160 employed, the compensation paid may shall not exceed the
161 compensation provided in the agreement or in the will.
162 Section 2. Section 736.1007, Florida Statutes, is amended
163 to read:
164 736.1007 Trustee’s attorney fees.—
165 (1) If the trustee of a revocable trust retains an attorney
166 to render legal services in connection with the initial
167 administration of the trust, the attorney is entitled to
168 reasonable compensation for those legal services, payable from
169 the assets of the trust, subject to s. 736.0802(10), without
170 court order. The trustee and the attorney may agree to
171 compensation that is determined in a manner or amount other than
172 the manner or amount provided in this section. The agreement is
173 not binding on a person who bears the impact of the compensation
174 unless that person is a party to or otherwise consents to be
175 bound by the agreement. The agreement may provide that the
176 trustee is not individually liable for the attorney fees and
177 costs.
178 (2) Unless otherwise agreed, compensation based on the
179 value of the trust assets immediately following the settlor’s
180 death and the income earned by the trust during initial
181 administration at the rate of 75 percent of the schedule
182 provided in s. 733.6171(3)(a)-(h) is presumed to be reasonable
183 total compensation for ordinary services of all attorneys
184 employed generally to advise a trustee concerning the trustee’s
185 duties in initial trust administration.
186 (3) An attorney who is retained to render only limited and
187 specifically defined legal services shall be compensated as
188 provided in the retaining agreement. If the amount or method of
189 determining compensation is not provided in the agreement, the
190 attorney is entitled to a reasonable fee, taking into account
191 the factors set forth in subsection (6).
192 (4) Ordinary services of the attorney in an initial trust
193 administration include legal advice and representation
194 concerning the trustee’s duties relating to:
195 (a) Review of the trust instrument and each amendment for
196 legal sufficiency and interpretation.
197 (b) Implementation of substitution of the successor
198 trustee.
199 (c) Persons who must or should be served with required
200 notices and the method and timing of such service.
201 (d) The obligation of a successor to require a former
202 trustee to provide an accounting.
203 (e) The trustee’s duty to protect, insure, and manage trust
204 assets and the trustee’s liability relating to these duties.
205 (f) The trustee’s duty regarding investments imposed by the
206 prudent investor rule.
207 (g) The trustee’s obligation to inform and account to
208 beneficiaries and the method of satisfaction of such
209 obligations, the liability of the trust and trustee to the
210 settlor’s creditors, and the advisability or necessity for
211 probate proceedings to bar creditors.
212 (h) Contributions due to the personal representative of the
213 settlor’s estate for payment of expenses of administration and
214 obligations of the settlor’s estate.
215 (i) Identifying tax returns required to be filed by the
216 trustee, the trustee’s liability for payment of taxes, and the
217 due date of returns.
218 (j) Filing a nontaxable affidavit, if not filed by a
219 personal representative.
220 (k) Order of payment of expenses of administration of the
221 trust and order and priority of abatement of trust
222 distributions.
223 (l) Distribution of income or principal to beneficiaries or
224 funding of further trusts provided in the governing instrument.
225 (m) Preparation of any legal documents required to effect
226 distribution.
227 (n) Fiduciary duties, avoidance of self-dealing, conflicts
228 of interest, duty of impartiality, and obligations to
229 beneficiaries.
230 (o) If there is a conflict of interest between a trustee
231 who is a beneficiary and other beneficiaries of the trust,
232 advice to the trustee on limitations of certain authority of the
233 trustee regarding discretionary distributions or exercise of
234 certain powers and alternatives for appointment of an
235 independent trustee and appropriate procedures.
236 (p) Procedures for the trustee’s discharge from liability
237 for administration of the trust on termination or resignation.
238 (5) In addition to the attorney’s fees for ordinary
239 services, the attorney for the trustee shall be allowed further
240 reasonable compensation for any extraordinary service. What
241 constitutes an extraordinary service may vary depending on many
242 factors, including the size of the trust. Extraordinary services
243 may include, but are not limited to:
244 (a) Involvement in a trust contest, trust construction, a
245 proceeding for determination of beneficiaries, a contested
246 claim, elective share proceedings, apportionment of estate
247 taxes, or other adversary proceedings or litigation by or
248 against the trust.
249 (b) Representation of the trustee in an audit or any
250 proceeding for adjustment, determination, or collection of any
251 taxes.
252 (c) Tax advice on postmortem tax planning, including, but
253 not limited to, disclaimer, renunciation of fiduciary
254 commission, alternate valuation date, allocation of
255 administrative expenses between tax returns, the QTIP or reverse
256 QTIP election, allocation of GST exemption, qualification for
257 Internal Revenue Code ss. 303 and 6166 privileges, deduction of
258 last illness expenses, distribution planning, asset basis
259 considerations, throwback rules, handling income or deductions
260 in respect of a decedent, valuation discounts, special use and
261 other valuation, handling employee benefit or retirement
262 proceeds, prompt assessment request, or request for release from
263 personal liability for payment of tax.
264 (d) Review of an estate tax return and preparation or
265 review of other tax returns required to be filed by the trustee.
266 (e) Preparation of decedent’s federal estate tax return. If
267 this return is prepared by the attorney, a fee of one-half of 1
268 percent up to a value of $10 million and one-fourth of 1 percent
269 on the value in excess of $10 million, of the gross estate as
270 finally determined for federal estate tax purposes, is presumed
271 to be reasonable compensation for the attorney for this service.
272 These fees shall include services for routine audit of the
273 return, not beyond the examining agent level, if required.
274 (f) Purchase, sale, lease, or encumbrance of real property
275 by the trustee or involvement in zoning, land use,
276 environmental, or other similar matters.
277 (g) Legal advice regarding carrying on of decedent’s
278 business or conducting other commercial activity by the trustee.
279 (h) Legal advice regarding claims for damage to the
280 environment or related procedures.
281 (i) Legal advice regarding homestead status of trust real
282 property or proceedings involving the status.
283 (j) Involvement in fiduciary, employee, or attorney
284 compensation disputes.
285 (k) Considerations of special valuation of trust assets,
286 including discounts for blockage, minority interests, lack of
287 marketability, and environmental liability.
288 (6) Upon petition of any interested person in a proceeding
289 to review the compensation paid or to be paid to the attorney
290 for the trustee, the court may increase or decrease the
291 compensation for ordinary services of the attorney for the
292 trustee or award compensation for extraordinary services if the
293 facts and circumstances of the particular administration
294 warrant. In determining reasonable compensation, the court shall
295 consider all of the following factors giving such weight to each
296 as the court may determine to be appropriate:
297 (a) The promptness, efficiency, and skill with which the
298 initial administration was handled by the attorney.
299 (b) The responsibilities assumed by, and potential
300 liabilities of, the attorney.
301 (c) The nature and value of the assets that are affected by
302 the decedent’s death.
303 (d) The benefits or detriments resulting to the trust or
304 the trust’s beneficiaries from the attorney’s services.
305 (e) The complexity or simplicity of the administration and
306 the novelty of issues presented.
307 (f) The attorney’s participation in tax planning for the
308 estate, the trust, and the trust’s beneficiaries and tax return
309 preparation or review and approval.
310 (g) The nature of the trust assets, the expenses of
311 administration, and the claims payable by the trust and the
312 compensation paid to other professionals and fiduciaries.
313 (h) Any delay in payment of the compensation after the
314 services were furnished.
315 (i) Any other relevant factors.
316 (2)(7) If a separate written agreement regarding
317 compensation exists between the attorney and the settlor, the
318 attorney must shall furnish a copy to the trustee prior to
319 commencement of employment and, if employed, must shall promptly
320 file and serve a copy on all interested persons. A separate
321 agreement or a provision in the trust suggesting or directing
322 the trustee to retain a specific attorney does not obligate the
323 trustee to employ the attorney or obligate the attorney to
324 accept the representation but, if the attorney who is a party to
325 the agreement or who drafted the trust is employed, the
326 compensation paid may shall not exceed the compensation provided
327 in the agreement.
328 (8) As used in this section, the term “initial trust
329 administration” means administration of a revocable trust during
330 the period that begins with the death of the settlor and ends on
331 the final distribution of trust assets outright or to continuing
332 trusts created under the trust agreement but, if an estate tax
333 return is required, not until after issuance of an estate tax
334 closing letter or other evidence of termination of the estate
335 tax proceeding. This initial period is not intended to include
336 continued regular administration of the trust.
337 Section 3. Subsection (4) of section 733.106, Florida
338 Statutes, is amended to read:
339 733.106 Costs and attorney fees.—
340 (4) If costs and attorney fees are to be paid from the
341 estate under this section, s. 733.6171(4), s. 736.1005, or s.
342 736.1006, the court, in its discretion, may direct from what
343 part of the estate they shall be paid.
344 (a) If the court directs an assessment against a person’s
345 part of the estate and such part is insufficient to fully pay
346 the assessment, the court may direct payment from the person’s
347 part of a trust, if any, if a pour-over will is involved and the
348 matter is interrelated with the trust.
349 (b) All or any part of the costs and attorney fees to be
350 paid from the estate may be assessed against one or more
351 persons’ part of the estate in such proportions as the court
352 finds to be just and proper.
353 (c) In the exercise of its discretion, the court may
354 consider the following factors:
355 1. The relative impact of an assessment on the estimated
356 value of each person’s part of the estate.
357 2. The amount of costs and attorney fees to be assessed
358 against a person’s part of the estate.
359 3. The extent to which a person whose part of the estate is
360 to be assessed, individually or through counsel, actively
361 participated in the proceeding.
362 4. The potential benefit or detriment to a person’s part of
363 the estate expected from the outcome of the proceeding.
364 5. The relative strength or weakness of the merits of the
365 claims, defenses, or objections, if any, asserted by a person
366 whose part of the estate is to be assessed.
367 6. Whether a person whose part of the estate is to be
368 assessed was a prevailing party with respect to one or more
369 claims, defenses, or objections.
370 7. Whether a person whose part of the estate is to be
371 assessed unjustly caused an increase in the amount of costs and
372 attorney fees incurred by the personal representative or another
373 interested person in connection with the proceeding.
374 8. Any other relevant fact, circumstance, or equity.
375 (d) The court may assess a person’s part of the estate
376 without finding that the person engaged in bad faith,
377 wrongdoing, or frivolousness.
378 Section 4. Subsection (2) of section 736.1005, Florida
379 Statutes, is amended to read:
380 736.1005 Attorney fees for services to the trust.—
381 (2) If attorney fees are to be paid from the trust under
382 subsection (1), s. 736.1007(5)(a), or s. 733.106(4)(a), the
383 court, in its discretion, may direct from what part of the trust
384 the fees shall be paid.
385 (a) All or any part of the attorney fees to be paid from
386 the trust may be assessed against one or more persons’ part of
387 the trust in such proportions as the court finds to be just and
388 proper.
389 (b) In the exercise of its discretion, the court may
390 consider the following factors:
391 1. The relative impact of an assessment on the estimated
392 value of each person’s part of the trust.
393 2. The amount of attorney fees to be assessed against a
394 person’s part of the trust.
395 3. The extent to which a person whose part of the trust is
396 to be assessed, individually or through counsel, actively
397 participated in the proceeding.
398 4. The potential benefit or detriment to a person’s part of
399 the trust expected from the outcome of the proceeding.
400 5. The relative strength or weakness of the merits of the
401 claims, defenses, or objections, if any, asserted by a person
402 whose part of the trust is to be assessed.
403 6. Whether a person whose part of the trust is to be
404 assessed was a prevailing party with respect to one or more
405 claims, defenses, or objections.
406 7. Whether a person whose part of the trust is to be
407 assessed unjustly caused an increase in the amount of attorney
408 fees incurred by the trustee or another person in connection
409 with the proceeding.
410 8. Any other relevant fact, circumstance, or equity.
411 (c) The court may assess a person’s part of the trust
412 without finding that the person engaged in bad faith,
413 wrongdoing, or frivolousness.
414 Section 5. This act shall take effect July 1, 2021.