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, mustshallgrant 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 mustshall95 grant such power of appointment in the second trust to such 96 beneficiary, and the class of permissible appointees mustshall97 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 inthis 151 section does not affectaffectsany 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: 164 736.1110 Ademption 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 areshall be195deemed tobecommunity 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.