Florida Senate - 2025                       CS for CS for SB 262
       
       
        
       By the Committees on Community Affairs; and Judiciary; and
       Senator Berman
       
       
       
       
       578-02303-25                                           2025262c2
    1                        A bill to be entitled                      
    2         An act relating to trusts; amending s. 736.04117,
    3         F.S.; revising the definition of the term “authorized
    4         trustee”; revising how an authorized trustee may
    5         exercise the power to invade principal as an
    6         authorized trustee administering a trust; providing
    7         that notice of such exercise by an authorized trustee
    8         is not a trust disclosure document; providing that a
    9         trust disclosure document may not commence a
   10         limitations period unless such trust disclosure
   11         document is provided after the effective date of the
   12         exercise of the power to invade principal by an
   13         authorized trustee; providing applicability; amending
   14         s. 736.08125, F.S.; providing an exception with regard
   15         to protection of successor trustees; creating s.
   16         736.10085, F.S.; barring certain actions initiated by
   17         specified parties against prior trustees; creating s.
   18         736.1110, F.S.; providing that property devised to or
   19         from a revocable trust which is devised, given, or
   20         distributed to a donee by a settlor during the
   21         settlor’s lifetime is treated as a satisfaction of
   22         devise to that donee if certain criteria are met;
   23         providing that property distributed or given to a
   24         devisee during a settlor’s lifetime is to be valued at
   25         the time the devisee came into possession or enjoyment
   26         of the property, or at the time of the death of the
   27         settlor, whichever occurs first; providing
   28         applicability; amending s. 736.1502, F.S.; revising
   29         the definitions of the terms “community property” and
   30         “community property trust”; amending s. 736.151, F.S.;
   31         providing that homestead property transferred by one
   32         or both settlor spouses to a community property trust
   33         will not be treated as a change of ownership for the
   34         purposes of reassessing the property; providing that
   35         such transfer qualifies as a change or transfer of
   36         legal or equitable title between spouses; providing
   37         construction and retroactive application; providing an
   38         effective date.
   39          
   40  Be It Enacted by the Legislature of the State of Florida:
   41  
   42         Section 1. Paragraph (b) of subsection (1), paragraph (a)
   43  of subsection (2), subsection (3), paragraph (a) of subsection
   44  (4), and paragraph (d) of subsection (8) of section 736.04117,
   45  Florida Statutes, are amended, and subsection (12) is added to
   46  that section, to read:
   47         736.04117 Trustee’s power to invade principal in trust.—
   48         (1) DEFINITIONS.—As used in this section, the term:
   49  (b) “Authorized trustee” means a trustee, other than the settlor
   50  or a beneficiary, who has the power to invade the principal of a
   51  trust. For the purposes of this section, an authorized trustee
   52  will not be considered a settlor of a second trust, even if the
   53  authorized trustee created the trust instrument governing the
   54  second trust or made a distribution of assets from the first
   55  trust to the second trust. In determining settlor intent with
   56  respect to a second trust or a modification of the first trust,
   57  the intent of a settlor of the first trust, a settlor of the
   58  second trust, and the authorized trustee may be considered.
   59         (2) DISTRIBUTION FROM FIRST TRUST TO SECOND TRUST WHEN
   60  AUTHORIZED TRUSTEE HAS ABSOLUTE POWER TO INVADE.—
   61         (a) Unless a trust instrument expressly provides otherwise,
   62  an authorized trustee who has absolute power under the terms of
   63  the trust to invade its principal, referred to in this section
   64  as the “first trust,” to make current distributions to or for
   65  the benefit of one or more beneficiaries may instead exercise
   66  such power by modifying the terms of the first trust or by
   67  appointing all or part of the principal of the trust subject to
   68  such power in favor of a trustee of one or more other trusts,
   69  whether created under the same trust instrument as the first
   70  trust or a different trust instrument, including a trust
   71  instrument created for the purposes of exercising the power
   72  granted by this section, each referred to in this section as the
   73  “second trust,” for the current benefit of one or more of such
   74  beneficiaries only if:
   75         1. The beneficiaries of the second trust include only
   76  beneficiaries of the first trust; and
   77         2. The second trust does not reduce any vested interest.
   78         (3) DISTRIBUTION FROM FIRST TRUST TO SECOND TRUST WHEN
   79  AUTHORIZED TRUSTEE DOES NOT HAVE ABSOLUTE POWER TO INVADE.
   80  Unless the trust instrument expressly provides otherwise, an
   81  authorized trustee who has a power, other than an absolute
   82  power, under the terms of a first trust to invade principal to
   83  make current distributions to or for the benefit of one or more
   84  beneficiaries may instead exercise such power by modifying the
   85  terms of the first trust or by appointing all or part of the
   86  principal of the first trust subject to such power in favor of a
   87  trustee of one or more second trusts. If the authorized trustee
   88  exercises such power:
   89         (a) The second trusts, in the aggregate, must shall grant
   90  each beneficiary of the first trust beneficial interests in the
   91  second trusts which are substantially similar to the beneficial
   92  interests of the beneficiary in the first trust.
   93         (b) If the first trust grants a power of appointment to a
   94  beneficiary of the first trust, the second trust must shall
   95  grant such power of appointment in the second trust to such
   96  beneficiary, and the class of permissible appointees must shall
   97  be the same as in the first trust.
   98         (c) If the first trust does not grant a power of
   99  appointment to a beneficiary of the first trust, the second
  100  trust may not grant a power of appointment in the second trust
  101  to such beneficiary.
  102         (d) Notwithstanding paragraphs (a), (b), and (c), the term
  103  of the second trust may extend beyond the term of the first
  104  trust, and, for any period after the first trust would have
  105  otherwise terminated, in whole or in part, under the provisions
  106  of the first trust, the trust instrument of the second trust
  107  may, with respect to property subject to such extended term:
  108         1. Include language providing the trustee with the absolute
  109  power to invade the principal of the second trust during such
  110  extended term; and
  111         2. Create a power of appointment, if the power holder is a
  112  current beneficiary of the first trust, or expand the class of
  113  permissible appointees in favor of which a power of appointment
  114  may be exercised.
  115         (4) DISTRIBUTION FROM FIRST TRUST TO SUPPLEMENTAL NEEDS
  116  TRUST.—
  117         (a) Notwithstanding subsections (2) and (3), unless the
  118  trust instrument expressly provides otherwise, an authorized
  119  trustee who has the power under the terms of a first trust to
  120  invade the principal of the first trust to make current
  121  distributions to or for the benefit of a beneficiary with a
  122  disability may instead exercise such power by modifying the
  123  terms of the first trust or by appointing all or part of the
  124  principal of the first trust in favor of a trustee of a second
  125  trust that is a supplemental needs trust if:
  126         1. The supplemental needs trust benefits the beneficiary
  127  with a disability;
  128         2. The beneficiaries of the second trust include only
  129  beneficiaries of the first trust; and
  130         3. The authorized trustee determines that the exercise of
  131  such power will further the purposes of the first trust.
  132         (8) NOTICE.—
  133         (d) The authorized trustee’s notice under this subsection
  134  is not a trust disclosure document as defined in s. 736.1008(4)
  135  and does not limit the right of any beneficiary to object to the
  136  exercise of the authorized trustee’s power to invade principal
  137  except as otherwise provided in other applicable provisions of
  138  this code. With respect to the exercise of the authorized
  139  trustee’s power to invade principal, a trust disclosure document
  140  will not commence a limitations period unless the trust
  141  disclosure document is provided after the effective date of the
  142  exercise of such power to invade principal by the authorized
  143  trustee.
  144         (12) APPLICATION.—This section applies to all trusts that
  145  are governed by the laws of this state or that have a principal
  146  place of administration within this state.
  147         Section 2. Subsection (3) of section 736.08125, Florida
  148  Statutes, is amended to read:
  149         736.08125 Protection of successor trustees.—
  150         (3) Except as provided in s. 736.10085, nothing in this
  151  section does not affect affects any liability of the prior
  152  trustee or the right of the successor trustee or any beneficiary
  153  to pursue an action or claim against the prior trustee.
  154         Section 3. Section 736.10085, Florida Statutes, is created
  155  to read:
  156         736.10085 Claims against former trustees.—An action or
  157  claim by a successor trustee or other person acting on behalf of
  158  the trust against a prior trustee is barred to the same extent
  159  that the action or claim would be barred if brought by the
  160  beneficiary whose interests are represented by the successor
  161  trustee or other person acting on behalf of the trust.
  162         Section 4. Section 736.1110, Florida Statutes, is created
  163  to read:
  164         736.1110Ademption by satisfaction.—
  165         (1) Property devised to or from a revocable trust which a
  166  settlor gave to a donee during the settlor’s lifetime or which
  167  is distributed from a revocable trust to a donee during the
  168  settlor’s lifetime is to be treated as a satisfaction of a
  169  devise to that donee, in whole or in part, upon the settlor’s
  170  death, if any of the following circumstances applies:
  171         (a) The trust instrument provides for the deduction of the
  172  lifetime gift or distribution.
  173         (b) The settlor or the trustee of the revocable trust
  174  declares in a contemporaneous writing that the gift or
  175  distribution is to be deducted from the devise or is in
  176  satisfaction of the devise.
  177         (c) The devisee acknowledges in writing that the gift or
  178  distribution is in satisfaction of the devise.
  179         (2) For purposes of part satisfaction, property distributed
  180  or given during the settlor’s lifetime is valued at the time the
  181  devisee came into possession or enjoyment of the property or at
  182  the time of the death of the settlor, whichever occurs first.
  183         (3) This section applies to revocable trusts that become
  184  irrevocable on or after July 1, 2025.
  185         Section 5. Subsections (1) and (2) of section 736.1502,
  186  Florida Statutes, are amended to read:
  187         736.1502 Definitions.—Unless the context otherwise
  188  requires, as used in this part:
  189         (1) “Community property” means the property and the
  190  appreciation of and income from the property owned by a
  191  qualified trustee of a community property trust during the
  192  marriage of the settlor spouses. The property owned by a
  193  community property trust pursuant to this part and the
  194  appreciation of and income from such property are shall be
  195  deemed to be community property for purposes of general law.
  196         (2) “Community property trust” means an express trust that
  197  complies with s. 736.1503 and is created, amended, restated, or
  198  modified on or after July 1, 2021.
  199         Section 6. Subsection (3) is added to section 736.151,
  200  Florida Statutes, to read:
  201         736.151 Homestead property.—
  202         (3) A transfer of homestead property by one or both of the
  203  settlor spouses to a community property trust will not be
  204  treated as a change of ownership for purposes of reassessing the
  205  property and instead qualifies as a change or transfer of legal
  206  or equitable title between spouses as described in s.
  207  193.155(3)(a)2.
  208         Section 7. The amendments made by this act to ss.
  209  736.04117, 736.1502, and 736.151, Florida Statutes, are remedial
  210  and apply to trusts created before, on, or after the effective
  211  date of this act.
  212         Section 8. This act shall take effect upon becoming a law.