Florida 2024 Regular Session

Florida House Bill H1093 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
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2		-	~~ENROLLED~~
3		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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7		-	CODING: Words stricken are deletions; words underlined are additions.
8		-	hb1093-~~03-er~~
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	3	+	CS/HB 1093, Engrossed 1 2024
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9	9		Page 1 of 113
10	10		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
11	11
12	12
13	13
14		-	1
	14	+	A bill to be entitled 1
15	15		An act relating to the Florida Uniform Fiduciary 2
16	16		Income and Principal Act; amending s. 738.101, F.S.; 3
17	17		revising a short title; amending s. 738.102, F.S.; 4
18	18		revising and providing definitions governing ch. 738, 5
19	19		F.S.; amending s. 738.103, F.S.; specifying the s cope 6
20	20		of ch. 738, F.S.; amending s. 738.104, F.S.; 7
21	21		specifying circumstances under which ch. 738, F.S., 8
22	22		applies to a trust; repealing s. 738.1041, F.S., 9
23	23		relating to total return unitrusts; repealing s. 10
24	24		738.105, F.S., relating to judicial control of 11
25	25		discretionary powers; amending s. 738.201, F.S.; 12
26	26		specifying the duties of a fiduciary; providing that a 13
27	27		fiduciary's allocation, determination, or exercise of 14
28	28		discretion is presumed to be fair and reasonable to 15
29	29		all beneficiaries; requiring a fiduciary to take 16
30	30		specified actions; authorizing a fiduciary to exercise 17
31	31		discretionary power of administration under specified 18
32	32		circumstances; requiring the fiduciary to consider 19
33	33		specified factors before exercising such discretionary 20
34	34		power; providing for applicability; amending s. 21
35	35		738.202, F.S.; defining the term "fiduciary decision"; 22
36	36		prohibiting a court from ordering a fiduciary to 23
37	37		change his or her decision unless the decision was an 24
38	38		abuse of discretionary power; prohibiting a court from 25
39		-	~~ENROLLED~~
40		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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42		-
43		-
44		-	CODING: Words stricken are deletions; words underlined are additions.
45		-	hb1093-~~03-er~~
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	40	+	CS/HB 1093, Engrossed 1 2024
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46	46		Page 2 of 113
47	47		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
48	48
49	49
50	50
51	51		determining that a fiduciary abused its di scretion 26
52	52		under specified conditions; authorizing a court to 27
53	53		order a specified remedy; authorizing a court to 28
54	54		determine whether a proposed fiduciary decision will 29
55	55		result in an abuse of discretion; providing that a 30
56	56		beneficiary who opposes a proposed decision has the 31
57	57		burden to establish that such decision is an abuse of 32
58	58		discretion; requiring that any attorney fees incurred 33
59	59		in defending an action related to the abuse of a 34
60	60		fiduciary's discretion be paid from trust assets; 35
61	61		creating s. 738.203, F.S.; authorizing a fiduciary to 36
62	62		adjust between income and principal if such adjustment 37
63	63		assists in administering the trust or estate 38
64	64		impartially; providing construction; providing that a 39
65	65		fiduciary is not liable to another for an adjustment, 40
66	66		or failure to adjust, between inco me and principal 41
67	67		made in good faith; requiring a fiduciary to consider 42
68	68		certain relevant factors when considering such 43
69	69		adjustment; prohibiting a fiduciary from exercising or 44
70	70		considering such adjustment if certain conditions 45
71	71		exist; revising applicability; au thorizing a fiduciary 46
72	72		to release or delegate to a cofiduciary specified 47
73	73		powers to adjust under specified conditions; providing 48
74	74		requirements and powers for any such releases and 49
75	75		delegations; providing applicability; requiring that 50
76		-	~~ENROLLED~~
77		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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80		-
81		-	CODING: Words stricken are deletions; words underlined are additions.
82		-	hb1093-~~03-er~~
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	77	+	CS/HB 1093, Engrossed 1 2024
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83	83		Page 3 of 113
84	84		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
85	85
86	86
87	87
88	88		the description of an exer cise of the power to adjust 51
89	89		between income and principal contain specified 52
90	90		information; amending s. 738.301, F.S.; defining 53
91	91		terms; amending s. 738.302, F.S.; specifying 54
92	92		applicability of specified provisions; authorizing the 55
93	93		conversion of an income trust to a unitrust; 56
94	94		restricting provisions to trusts that are 57
95	95		beneficiaries of an estate; providing construction; 58
96	96		providing that a fiduciary acting in good faith is not 59
97	97		liable to a person affected by a certain action or 60
98	98		inaction; amending s. 738.303, F.S.; specif ying the 61
99	99		authority of a fiduciary with respect to the 62
100	100		administration of certain trusts; providing the 63
101	101		circumstances under which a fiduciary may perform such 64
102	102		actions; authorizing a beneficiary or a fiduciary to 65
103	103		request the court to allow the beneficiary or 66
104	104		fiduciary to take a specified action; requiring a 67
105	105		fiduciary to inform specified persons of a decision to 68
106	106		take action; authorizing a beneficiary to request a 69
107	107		court to direct the fiduciary to take the requested 70
108	108		action under specified circumstances; requiring 71
109	109		fiduciaries to consider specified factors before 72
110	110		taking a certain action; authorizing a fiduciary to 73
111	111		release or delegate the power to take certain actions; 74
112	112		creating s. 738.304, F.S.; requiring a certain notice 75
113		-	~~ENROLLED~~
114		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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120	120		Page 4 of 113
121	121		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
122	122
123	123
124	124
125	125		to be sent to specified parties; providing 76
126	126		applicability; authorizing a person to consent to a 77
127	127		specified action in a record; providing that such 78
128	128		person does not need to be sent notice of such action; 79
129	129		providing requirements for such notices; creating s. 80
130	130		738.305, F.S.; requiring a fiduciary of a unitru st to 81
131	131		follow a certain policy; providing rules for a 82
132	132		unitrust policy; providing additional actions a 83
133	133		unitrust policy may contain; creating s. 738.306, 84
134	134		F.S.; requiring a unitrust rate to be within a 85
135	135		specified range; authorizing a unitrust policy to 86
136	136		provide for specified limits within such range; 87
137	137		requiring a fiduciary who is a non -independent person 88
138	138		to use a specified unitrust rate; creating s. 738.307, 89
139	139		F.S.; requiring a unitrust policy to provide a 90
140	140		specified method for determining fair market value of 91
141	141		an asset in determining a unitrust amount; authorizing 92
142	142		specified unitrust policies to provide methods for 93
143	143		determining a certain net fair market value; 94
144	144		prohibiting certain property from being included in 95
145	145		the determination of the value of a trust; creating s. 96
146	146		738.308, F.S.; requiring a unitrust policy to provide 97
147	147		a specified period; specifying that such period must 98
148	148		be a calendar year; authorizing a unitrust policy to 99
149	149		provide certain standards for periods; creating s. 100
150		-	~~ENROLLED~~
151		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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157	157		Page 5 of 113
158	158		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
159	159
160	160
161	161
162	162		738.309, F.S.; providing applicability; authorizi ng a 101
163	163		trustee of an express unitrust to determine the 102
164	164		unitrust amount by reference to the net fair market 103
165	165		value of the unitrust's assets in a specified 104
166	166		timeframe; providing that distribution of a unitrust 105
167	167		amount is considered a distribution of all the net 106
168	168		income of an express unitrust and is considered an 107
169	169		income interest; specifying that the unitrust amount 108
170	170		is considered a reasonable apportionment of the total 109
171	171		return of the express unitrust; providing that an 110
172	172		express unitrust that allows a distribution in ex cess 111
173	173		of a specified unitrust rate is considered a 112
174	174		distribution of all of the income of the unitrust; 113
175	175		authorizing an express unitrust to provide a mechanism 114
176	176		for changing the unitrust rate and for conversion from 115
177	177		a unitrust to an income trust or from an inco me trust 116
178	178		to a unitrust; specifying that unless an express 117
179	179		unitrust prohibits the power to change the rate or 118
180	180		convert the trust, the trustee has such power; 119
181	181		authorizing the governing instrument of an express 120
182	182		unitrust to grant the trustee discretion to adopt a 121
183	183		certain practice; specifying that unless an express 122
184	184		unitrust provides otherwise, the distribution of an 123
185	185		amount is considered a distribution from specified 124
186	186		sources in a specified order of priority; authorizing 125
187		-	~~ENROLLED~~
188		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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193		-	hb1093-~~03-er~~
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194	194		Page 6 of 113
195	195		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
196	196
197	197
198	198
199	199		a governing instrument of an express unitrus t to allow 126
200	200		exclusion of specified assets; providing that the use 127
201	201		of such assets may be considered equivalent to income 128
202	202		or to the unitrust amount; creating s. 738.310, F.S.; 129
203	203		requiring a trustee, after the conversion of an income 130
204	204		trust to a unitrust, to cons ider the unitrust amount 131
205	205		paid from certain sources in a specified order of 132
206	206		priority; amending s. 738.401, F.S.; defining terms; 133
207	207		specifying that an attribute or action of an entity 134
208	208		includes an attribute or action from any other entity 135
209	209		in which the initial e ntity has an ownership interest 136
210	210		or holds another interest; requiring a fiduciary to 137
211	211		allocate certain money and tangible personal property 138
212	212		to income; requiring a fiduciary to allocate specified 139
213	213		property and money to principal; providing that 140
214	214		certain money received in an entity distribution is a 141
215	215		capital distribution in specified circumstances; 142
216	216		specifying that in cases of capital distribution, the 143
217	217		amount received in an entity distribution must be 144
218	218		reduced to the extent that cumulative distributions 145
219	219		from the entity to the fiduciary are within certain 146
220	220		ranges; authorizing a fiduciary to consider additional 147
221	221		information before deciding to make or change a 148
222	222		decision to make a payment to a beneficiary; providing 149
223	223		that if a fiduciary receives specified additional 150
224		-	~~ENROLLED~~
225		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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231	231		Page 7 of 113
232	232		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
233	233
234	234
235	235
236	236		information after a distribution to a beneficiary, the 151
237	237		fiduciary is not required to change or recover the 152
238	238		payment; authorizing a fiduciary in such a situation 153
239	239		to exercise other specified powers; revising 154
240	240		definitions; requiring a fiduciary to allocate certain 155
241	241		money and property to principal; providing the 156
242	242		mechanism for such allocation; defining the term 157
243	243		"public entity"; conforming provisions to changes made 158
244	244		by the act; amending s. 738.402, F.S.; conforming 159
245	245		provisions to changes made by the act; amending s. 160
246	246		738.403, F.S.; providing applicability; authorizing a 161
247	247		fiduciary to make certain determinations separately 162
248	248		and differently from the decisions concerning 163
249	249		distributions of income or principal; conforming 164
250	250		provisions to changes made by the act; making 165
251	251		technical changes; creating s. 738.404, F.S.; 166
252	252		specifying receipts that a fiduciary must allocate to 167
253	253		principal; creating s. 738.405, F.S.; providing for 168
254	254		the allocation of income from rental property; 169
255	255		creating s. 738.406, F.S.; specifying applicability; 170
256	256		requiring a fiduciary to allocate to income certain 171
257	257		amounts received as interest; requiring a fiduciary to 172
258	258		allocate to income increments in value of certain 173
259	259		bonds or other obligations; creating s. 738.407, F.S.; 174
260	260		specifying applicability; requiring a fiduciary to 175
261		-	~~ENROLLED~~
262		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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268	268		Page 8 of 113
269	269		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
270	270
271	271
272	272
273	273		allocate proceeds from insurance policies or contracts 176
274	274		to principal in a specified manner; creating s. 177
275	275		738.408, F.S.; specifying circumstances under which a 178
276	276		fiduciary may allocate an insubstantial allocation to 179
277	277		principal, subject to certain conditions and 180
278	278		limitations; creating s. 738.409, F.S.; defining 181
279	279		terms; specifying the manner in which a fiduciary may 182
280	280		determine incomes of separate funds; providing duties 183
281	281		of a fiduciary of a marital trust and other trusts; 184
282	282		requiring a fiduciary of a nonseparate fund to 185
283	283		calculate internal income in a specified manner; 186
284	284		providing construction; transferring, renumbering, and 187
285	285		amending s. 738.603, F.S.; revising the definition of 188
286	286		the term "liquidating asset"; providing applicability; 189
287	287		requiring a fiduciary to allocate to income and 190
288	288		principal the receipts produced by liquidating assets 191
289	289		in a certain manner; transferring, renumbering, and 192
290	290		amending s. 738.604, F.S.; requiring a fiduciary to 193
291	291		allocate the receipts from interests in minerals, 194
292	292		water, or other natural resources to income, 195
293	293		principal, or between income and principal under 196
294	294		specified conditions; revising applicability; 197
295	295		providing that an allocation between income and 198
296	296		principal from a receipt from a natural resource is 199
297	297		presumed equitable under a specified condition; 200
298		-	~~ENROLLED~~
299		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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305	305		Page 9 of 113
306	306		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
307	307
308	308
309	309
310	310		providing construction; tr ansferring, renumbering, and 201
311	311		amending s. 738.605, F.S.; requiring a fiduciary to 202
312	312		allocate receipts from timber to income, principal, or 203
313	313		between income and principal under specified 204
314	314		conditions; revising applicability; transferring, 205
315	315		renumbering, and amending s. 738.606, F.S.; 206
316	316		authorizing a settlor's spouse to require the trustee 207
317	317		of a trust that receives certain property to make such 208
318	318		property produce income under specified conditions; 209
319	319		authorizing the trustee to take specified actions if 210
320	320		directed by such spouse ; providing that the trustee 211
321	321		decides whether to take one or a combination of such 212
322	322		actions; revising applicability; providing 213
323	323		construction; transferring, renumbering, and amending 214
324	324		s. 738.607, F.S.; revising the definition of the term 215
325	325		"derivative"; requiring a fiduciary to allocate 216
326	326		specified percentages of certain receipts and 217
327	327		disbursements to income and allocate the balance to 218
328	328		principal; providing construction; requiring certain 219
329	329		fiduciaries to allocate a specified percentage to 220
330	330		income and allocate the balanc e to principal of 221
331	331		certain amounts; transferring, renumbering, and 222
332	332		amending s. 738.608, F.S.; requiring a fiduciary to 223
333	333		allocate to income a receipt from or related to asset -224
334	334		backed securities under a specified condition; 225
335		-	~~ENROLLED~~
336		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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342	342		Page 10 of 113
343	343		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
344	344
345	345
346	346
347	347		requiring a fiduciary to allocate to income a 226
348	348		specified percentage of receipts from the transaction 227
349	349		and the disbursement of a payment received as a result 228
350	350		of an interest in an asset -backed security; conforming 229
351	351		provisions to changes made by the act; creating s. 230
352	352		738.416, F.S.; requiring a fiduc iary to make specified 231
353	353		allocations from receipts from other financial 232
354	354		instruments or arrangements; providing construction; 233
355	355		amending s. 738.501, F.S.; specifying the manner by 234
356	356		which a fiduciary must make disbursements from income; 235
357	357		amending s. 738.502, F.S.; specifying the manner by 236
358	358		which a fiduciary must make disbursements from 237
359	359		principal; amending s. 738.503, F.S.; defining the 238
360	360		term "depreciation"; specifying the manner by which a 239
361	361		fiduciary may make transfers from income to principal 240
362	362		to account for depreciat ion; amending s. 738.504, 241
363	363		F.S.; specifying the manner by which a fiduciary may 242
364	364		make transfers from principal to income for 243
365	365		reimbursements; transferring, renumbering, and 244
366	366		amending s. 738.704, F.S.; providing that a fiduciary 245
367	367		that makes or expects to make a certain principal 246
368	368		disbursement may transfer an appropriate amount from 247
369	369		income to principal in one or more accounting periods; 248
370	370		providing applicability; making technical changes; 249
371	371		deleting a provision relating to payments necessary to 250
372		-	~~ENROLLED~~
373		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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380	380		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
381	381
382	382
383	383
384	384		avoid defaulting on a mo rtgage or security interest on 251
385	385		certain property; transferring, renumbering, and 252
386	386		amending s. 738.705, F.S.; revising the sources from 253
387	387		which a fiduciary must pay a tax required by a share 254
388	388		of an entity's taxable income; requiring a fiduciary 255
389	389		to adjust income or principal receipts if the taxes 256
390	390		paid are reduced due to a deduction for a payment made 257
391	391		to a beneficiary; providing construction; making 258
392	392		technical changes; transferring, renumbering, and 259
393	393		amending s. 738.706, F.S.; revising the circumstances 260
394	394		under which a fiduciary may make adjustments between 261
395	395		income and principal to offset shifts in the economic 262
396	396		interests or tax benefits of specified beneficiaries; 263
397	397		requiring a fiduciary to charge a beneficiary to 264
398	398		reimburse the principal if the beneficiary benefits 265
399	399		from an applicable tax deduction; requiring the share 266
400	400		of reimbursement for each fiduciary or beneficiary to 267
401	401		be the same as its share of the decrease in income 268
402	402		tax; authorizing such fiduciary to charge a 269
403	403		beneficiary to offset the estate tax by obtaining 270
404	404		payment from the beneficiary, withholding an amount 271
405	405		from future distributions, or adopting another method 272
406	406		or combination of methods; creating s. 738.508, F.S.; 273
407	407		defining terms; specifying the manner by which 274
408	408		property expenses are apportioned between a tenant and 275
409		-	~~ENROLLED~~
410		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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417	417		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
418	418
419	419
420	420
421	421		remainderman; providing applicability and 276
422	422		construction; amending s. 738.601, F.S.; providing 277
423	423		applicability; specifying the manner by which a 278
424	424		fiduciary determines and distributes net income; 279
425	425		providing circumstances under which a fiduciary may 280
426	426		not reduce certain principal or income receipts; 281
427	427		amending s. 738.602, F.S.; providing that certain 282
428	428		beneficiaries of non -unitrusts are entitled to receive 283
429	429		a specified share of net income; providing that 284
430	430		certain requirements apply in determining a 285
431	431		beneficiary's share of net i ncome; providing 286
432	432		construction; amending s. 738.701, F.S.; providing 287
433	433		that an income beneficiary is entitled to net income 288
434	434		when an asset is subject to a certain trust or 289
435	435		successive interest; providing that an asset becomes 290
436	436		subject to a specified trust on cer tain dates; 291
437	437		amending s. 738.702, F.S.; specifying the manner by 292
438	438		which a fiduciary allocates certain receipts and makes 293
439	439		disbursements when a decedent dies or income interest 294
440	440		begins; providing construction; amending s. 738.703, 295
441	441		F.S.; defining the term "undis tributed income"; 296
442	442		specifying the manner by which a fiduciary makes 297
443	443		allocations of undistributed income when income 298
444	444		interest ends; amending s. 738.801, F.S.; providing 299
445	445		for uniform application and construction of the act; 300
446		-	~~ENROLLED~~
447		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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454	454		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
455	455
456	456
457	457
458	458		amending s. 738.802, F.S.; providing construction in 301
459	459		relation to federal law; amending s. 738.803, F.S.; 302
460	460		making a technical change; amending s. 738.804, F.S.; 303
461	461		revising application of ch. 738, F.S., to conform to 304
462	462		changes made by the act; providing an effective date. 305
463	463		306
464	464		Be It Enacted by the Legislature of the State of Florida: 307
465	465		308
466	466		Section 1. Section 738.101, Florida Statutes, is amended 309
467	467		to read: 310
468	468		738.101 Short title. —This chapter may be cited as the 311
469	469		"Florida Uniform Fiduciary Income and Principal and Income Act." 312
470	470		Section 2. Section 73 8.102, Florida Statutes, is amended 313
471	471		to read: 314
472	472		738.102 Definitions. —As used in this chapter, the term: 315
473	473		(1) "Accounting period" means a calendar year unless 316
474	474		another 12-month period is selected by a fiduciary selects 317
475	475		another period of 12 calendar months or approximately 12 318
476	476		calendar months. The term includes a part portion of a calendar 319
477	477		year or another period of 12 calendar months or approximately 12 320
478	478		calendar months which other 12-month period that begins when an 321
479	479		income interest begins or ends when an income interest ends. 322
480	480		(2) "Asset-backed security," as provided in s. 738.415, 323
481	481		means a security that is serviced primarily by the cash flows of 324
482	482		a discrete pool of fixed or revolving receivables or other 325
483		-	~~ENROLLED~~
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491	491		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
492	492
493	493
494	494
495	495		financial assets that by their terms convert to cash withi n a 326
496	496		finite time. The term includes rights or other assets that 327
497	497		ensure the servicing or timely distribution of proceeds to the 328
498	498		holder of the asset-backed security. The term does not include 329
499	499		an asset to which s. 738.401, s. 738.409, or s. 738.414 applies. 330
500	500		(3) "Beneficiary" includes: 331
501	501		(a) For a trust: 332
502	502		1. A current beneficiary, including a current income 333
503	503		beneficiary and a beneficiary that may receive only principal; 334
504	504		2. A remainder beneficiary; and 335
505	505		3. Any other successor beneficiary; 336
506	506		(b) For an estate, an heir, and a devisee; and 337
507	507		(c) For a life estate or term interest, a person who holds 338
508	508		a life estate, a term interest, or a remainder or other interest 339
509	509		following a life estate or term interest means, in the case of a 340
510	510		decedent's estate, an heir or devisee and, in the case of a 341
511	511		trust, an income beneficiary or a remainder beneficiary . 342
512	512		(4)(3) "Carrying value" means the fair market value at the 343
513	513		time the assets are received by the fiduciary. For an estate and 344
514	514		for a trust the estates of decedents and tr usts described in s. 345
515	515		733.707(3), after the settlor's grantor's death, the assets are 346
516	516		considered received as of the date of the settlor's death. If 347
517	517		there is a change in fiduciaries, a majority of the continuing 348
518	518		fiduciaries may elect to adjust the carrying v alues to reflect 349
519	519		the fair market value of the assets at the beginning of their 350
520		-	~~ENROLLED~~
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528	528		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
529	529
530	530
531	531
532	532		administration. If such election is made, it must be reflected 351
533	533		on the first accounting filed after the election. For assets 352
534	534		acquired during the administration of the estate or t rust, the 353
535	535		carrying value is equal to the acquisition costs of the asset. 354
536	536		Carrying value of assets should not be arbitrarily "written up" 355
537	537		or "written down." In some circumstances, including, but not 356
538	538		limited to, those described in ss. 738.410 and 738.602, ca rrying 357
539	539		value may be adjusted with proper disclosure to reflect changes 358
540	540		in carrying value applied in a consistent manner. 359
541	541		(5) "Court" means a circuit court of this state. 360
542	542		(6) "Current income beneficiary" means a beneficiary to 361
543	543		which a fiduciary may or m ust distribute net income, regardless 362
544	544		of whether the fiduciary also distributes principal to the 363
545	545		beneficiary. 364
546	546		(7) "Distribution" means a payment or transfer by a 365
547	547		fiduciary to a beneficiary in the beneficiary's capacity as a 366
548	548		beneficiary, without considera tion other than the beneficiary's 367
549	549		right to receive the payment or transfer under the terms of the 368
550	550		trust as defined in this section, will, life estate, or term 369
551	551		interest. "Distribute," "distributed," and "distributee" have 370
552	552		corresponding meanings. 371
553	553		(8) "Estate" means a decedent's estate, including the 372
554	554		property of the decedent as the estate is originally constituted 373
555	555		and the property of the estate as it exists at any time during 374
556	556		administration. 375
557		-	~~ENROLLED~~
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565	565		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
566	566
567	567
568	568
569	569		(9)(4) "Fiduciary" includes means a trustee, a trust 376
570	570		director as defined in s. 736.0103, or a personal 377
571	571		representative, and a person acting under a delegation from a 378
572	572		fiduciary or a trustee. The term also includes a person that 379
573	573		holds property for a successor beneficiary whose interest may be 380
574	574		affected by an allocation of receipts and expenditures between 381
575	575		income and principal. If there are two or more cofiduciaries, 382
576	576		the term includes all cofiduciaries acting under the terms of 383
577	577		the trust and applicable law an executor, administrator, 384
578	578		successor personal representative, specia l administrator, or a 385
579	579		person performing substantially the same function . 386
580	580		(10)(5) "Income" means money or other property that a 387
581	581		fiduciary receives as current return from a principal asset. The 388
582	582		term includes a part portion of receipts from a sale, exchange , 389
583	583		or liquidation of a principal asset, to the extent provided in 390
584	584		ss. 738.401-738.416 ss. 738.401-738.403 and s. 738.503 . 391
585	585		(6) "Income beneficiary" means a person to whom net income 392
586	586		of a trust is or may be payable. 393
587	587		(11)(7) "Income interest" means the rig ht of a current an 394
588	588		income beneficiary to receive all or part of net income, whether 395
589	589		the terms of the trust require the net income to be distributed 396
590	590		or authorize the net income to be distributed in the fiduciary's 397
591	591		trustee's discretion. The term includes the right of a current 398
592	592		beneficiary to use property held by a fiduciary. 399
593	593		(12) "Independent person" means a person who is not: 400
594		-	~~ENROLLED~~
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602	602		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
603	603
604	604
605	605
606	606		(a) For a trust: 401
607	607		1. A qualified beneficiary as defined in s. 736.0103; 402
608	608		2. A settlor of the trust; 403
609	609		3. An individual whose leg al obligation to support a 404
610	610		beneficiary may be satisfied by a distribution from the trust; 405
611	611		or 406
612	612		4. Any trustee whom an interested distributee has the 407
613	613		power to remove and replace with a related or subordinate party. 408
614	614		(b) For an estate, a beneficiary; 409
615	615		(c) A spouse, a parent, a brother, a sister, or an issue 410
616	616		of an individual described in paragraph (a) or paragraph (b); 411
617	617		(d) A corporation, a partnership, a limited liability 412
618	618		company, or another entity in which persons described in 413
619	619		paragraphs (a), (b), and (c) , in the aggregate, have voting 414
620	620		control; or 415
621	621		(e) An employee of a person described in paragraph (a), 416
622	622		paragraph (b), paragraph (c), or paragraph (d). 417
623	623		(13) "Internal Revenue Code" means the Internal Revenue 418
624	624		Code of 1986, as amended. 419
625	625		(14)(8) "Mandatory income interest" means the right of a 420
626	626		current an income beneficiary to receive net income that the 421
627	627		terms of the trust require the fiduciary to distribute. 422
628	628		(15)(9) "Net income" means the total allocations receipts 423
629	629		allocated to income during an accounting p eriod to income under 424
630	630		the terms of a trust and this chapter minus the disbursements 425
631		-	~~ENROLLED~~
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639	639		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
640	640
641	641
642	642
643	643		made from income during the period, other than distributions, 426
644	644		allocated to income under the terms of the trust and this 427
645	645		chapter. To the extent that the trust is a unitrust under ss. 428
646	646		738.301-738.310, the term means the unitrust amount determined 429
647	647		under ss. 738.301-738.310. The term includes the amount of an 430
648	648		adjustment from principal to income under s. 738.203. The term 431
649	649		does not include the amount of an adjustment plus or minus 432
650	650		transfers under this chapter to or from income to principal 433
651	651		under s. 738.203 during the period. 434
652	652		(16)(10) "Person" means an individual, a business or a 435
653	653		nonprofit entity, corporation, business trust, an estate, a 436
654	654		trust, partnership, limited liability company, association, 437
655	655		joint venture, a public corporation, or any other legal or 438
656	656		commercial entity or a government or governmental subdivision, 439
657	657		agency, or instrumentality , or other legal entity . 440
658	658		(17) "Personal representative" means an executor, an 441
659	659		administrator, a successor personal representative, a special 442
660	660		administrator, or a person that performs substantially the same 443
661	661		function with respect to an estate under the law governing the 444
662	662		person's status. 445
663	663		(18)(11) "Principal" means property held in trust for 446
664	664		distribution to, production of income for, or use by a current 447
665	665		or successor a remainder beneficiary when the trust terminates . 448
666	666		(19) "Record" means information inscribed on a tangible 449
667	667		medium or stored in an electronic or other medium and is 450
668		-	~~ENROLLED~~
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676	676		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
677	677
678	678
679	679
680	680		retrievable in perceivable form. 451
681	681		(20) "Settlor" means a person, including a testator, who 452
682	682		creates or contributes property to a trust. If more than one 453
683	683		person creates or contributes property to a trust, the term 454
684	684		includes each person, to the extent of the trust property 455
685	685		attributable to that person's contribution, except to the extent 456
686	686		that another person has the power to revoke or withdraw that 457
687	687		portion. 458
688	688		(21) "Special tax benefit" means: 459
689	689		(a) Exclusion of a transfer to a trust from gifts 460
690	690		described in s. 2503(b) of the Internal Revenue Code because of 461
691	691		the qualification of an income interest in the trust as a 462
692	692		present interest in property; 463
693	693		(b) Status as a qualified subchapter S trust described in 464
694	694		s. 1361(d)(3) of the Internal Revenue Code at a time the trust 465
695	695		holds stock of an S corporation described in s. 1361(a)(1) of 466
696	696		the Internal Revenue Code; 467
697	697		(c) An estate or gift tax marital deduction for a transfer 468
698	698		to a trust under s. 2056 or s. 2523 of the Internal Revenue Code 469
699	699		which depends or depended in whole or in part on the right of 470
700	700		the settlor's spouse to receive the net income of the trust; 471
701	701		(d) Exemption in whole or in part of a trust from the 472
702	702		federal generation-skipping transfer tax imposed by s. 2601 of 473
703	703		the Internal Revenue Code because the trust was irrevocable on 474
704	704		September 25, 1985, if there is any possibility that: 475
705		-	~~ENROLLED~~
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713	713		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
714	714
715	715
716	716
717	717		1. A taxable distribution as defined in s. 2612(b) of the 476
718	718		Internal Revenue Code could be made from the trust; or 477
719	719		2. A taxable termination as defined in s. 2612(a) of the 478
720	720		Internal Revenue Code could occu r with respect to the trust; or 479
721	721		(e) An inclusion ratio as defined in s. 2642(a) of the 480
722	722		Internal Revenue Code of the trust which is less than one, if 481
723	723		there is any possibility that: 482
724	724		1. A taxable distribution as defined in s. 2612(b) of the 483
725	725		Internal Revenue Code could be made from the trust; or 484
726	726		2. A taxable termination as defined in s. 2612(a) of the 485
727	727		Internal Revenue Code could occur with respect to the trust. 486
728	728		(22) "Successive interest" means the interest of a 487
729	729		successor beneficiary. 488
730	730		(23)(12) "Successor Remainder beneficiary" means a person 489
731	731		entitled to receive income or principal or to use property when 490
732	732		an income interest or other current interest ends. 491
733	733		(24)(13) "Terms of a trust" means : 492
734	734		(a) Except as otherwise provided in paragraph (b), the 493
735	735		manifestation of the settlor's intent regarding a trust's 494
736	736		provisions as: 495
737	737		1. Expressed in the will or trust instrument; or 496
738	738		2. Established by other evidence that would be admissible 497
739	739		in a judicial proceeding. 498
740	740		(b) The trust's provisions as established, determi ned, or 499
741	741		amended by: 500
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750	750		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
751	751
752	752
753	753
754	754		1. A trustee or trust director in accordance with the 501
755	755		applicable law; 502
756	756		2. A court order; or 503
757	757		3. A nonjudicial settlement agreement under s. 736.0111. 504
758	758		(c) For an estate, a will; or 505
759	759		(d) For a life estate or term interest, the corresponding 506
760	760		manifestation of the rights of the beneficiaries to the extent 507
761	761		provided in s. 738.508 the manifestation of the intent of a 508
762	762		grantor or decedent with respect to the trust, expressed in a 509
763	763		manner that admits of its proof in a judicial proceeding, 510
764	764		whether by written or spoken words or by conduct . 511
765	765		(25) "Trust" includes an express trust, whether private or 512
766	766		charitable, with additions to the trust, wherever and however 513
767	767		created; and a trust created or determined by a judgment or 514
768	768		decree under which the trust is to be administered in the manner 515
769	769		of an express trust. The term does not include a constructive 516
770	770		trust; a resulting trust; a conservatorship; a custodial 517
771	771		arrangement under the Florida Uniform Transfers to Minors Act; a 518
772	772		business trust providing for certificates to be issued to 519
773	773		beneficiaries; a common trust fund; a land trust under s. 520
774	774		689.071; a trust created by the form of the account or by the 521
775	775		deposit agreement at a financial institution; a voting trust; a 522
776	776		security arrangement; a liquidation trust; a trust for the 523
777	777		primary purpose of paying debts, dividends, interest, salaries, 524
778	778		wages, profits, pensions, retirement benefits, or employee 525
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787	787		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
788	788
789	789
790	790
791	791		benefits of any kind; or an arrangement under which a person is 526
792	792		a nominee, an escrowee, or an agent for another. 527
793	793		(26)(14) "Trustee" means a person, other than a personal 528
794	794		representative, that owns or holds property for the benefit of a 529
795	795		beneficiary. The term includes an original, additional, or 530
796	796		successor trustee, regardless of whether they are or not 531
797	797		appointed or confirm ed by a court. 532
798	798		(27) "Will" means any testamentary instrument recognized 533
799	799		under applicable law which makes a legally effective disposition 534
800	800		of an individual's property, effective at the individual's 535
801	801		death. The term includes a codicil or other amendment to a 536
802	802		testamentary instrument. 537
803	803		Section 3. Section 738.103, Florida Statutes, is amended 538
804	804		to read: 539
805	805		(Substantial rewording of section. See 540
806	806		s. 738.103, F.S., for present text.) 541
807	807		738.103 Scope.—Except as otherwise provided in the terms 542
808	808		of a trust or this chap ter, this chapter applies to all of the 543
809	809		following: 544
810	810		(1) A trust or an estate. 545
811	811		(2) A life estate or other term interest in which the 546
812	812		interest of one or more persons will be succeeded by the 547
813	813		interest of one or more other persons to the extent provided in 548
814	814		s. 738.508. 549
815	815		Section 4. Section 738.104, Florida Statutes, is amended 550
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824	824		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
825	825
826	826
827	827
828	828		to read: 551
829	829		(Substantial rewording of section. See 552
830	830		s. 738.104, F.S., for present text.) 553
831	831		738.104 Governing law. —Except as otherwise provided in the 554
832	832		terms of a trust or this chapter, t his chapter applies when this 555
833	833		state is the principal place of administration of a trust or 556
834	834		estate or the situs of property that is not held in a trust or 557
835	835		estate and is subject to a life estate or other term interest 558
836	836		described in s. 738.103(2). By accepting the trusteeship of a 559
837	837		trust having its principal place of administration in this state 560
838	838		or by moving the principal place of administration of a trust to 561
839	839		this state, the trustee submits to the application of this 562
840	840		chapter to any matter within the scope of thi s chapter involving 563
841	841		the trust. 564
842	842		Section 5. Section 738.1041, Florida Statutes, is 565
843	843		repealed. 566
844	844		Section 6. Section 738.105, Florida Statutes, is repealed. 567
845	845		Section 7. Section 738.201, Florida Statutes, is amended 568
846	846		to read: 569
847	847		(Substantial rewording of s ection. See 570
848	848		s. 738.201, F.S., for present text.) 571
849	849		738.201 Fiduciary duties; general principles. — 572
850	850		(1) In making an allocation or determination or exercising 573
851	851		discretion under this chapter, a fiduciary shall do all of the 574
852	852		following: 575
853		-	~~ENROLLED~~
854		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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856		-
857		-
858		-	CODING: Words stricken are deletions; words underlined are additions.
859		-	hb1093-~~03-er~~
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861	861		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
862	862
863	863
864	864
865	865		(a) Act in good fait h, based on what is a fair and 576
866	866		reasonable fee to all beneficiaries; 577
867	867		(b) Administer a trust or estate impartially, except to 578
868	868		the extent that the terms of the trust manifest an intent that 579
869	869		the fiduciary favors one or more beneficiaries; 580
870	870		(c) Administer the trust or estate in accordance with the 581
871	871		terms of the trust, even if there is a different provision in 582
872	872		this chapter. 583
873	873		(d) Administer the trust or estate in accordance with this 584
874	874		chapter, except to the extent that the terms of the trust 585
875	875		provide otherwise or authorize the fiduciary to determine 586
876	876		otherwise. 587
877	877		(2) A fiduciary's allocation, determination, or exercise 588
878	878		of discretion under this chapter is presumed to be fair and 589
879	879		reasonable to all beneficiaries. A fiduciary may exercise a 590
880	880		discretionary power of admin istration given to the fiduciary by 591
881	881		the terms of the trust, and an exercise of the power that 592
882	882		produces a result different from a result required or permitted 593
883	883		by this chapter does not create an inference that the fiduciary 594
884	884		abused the fiduciary's discretion. 595
885	885		(3) A fiduciary shall: 596
886	886		(a) Add a receipt to principal, to the extent that the 597
887	887		terms of the trust and this chapter do not allocate the receipt 598
888	888		between income and principal; 599
889	889		(b) Charge a disbursement to principal, to the extent that 600
890		-	~~ENROLLED~~
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893		-
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898	898		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
899	899
900	900
901	901
902	902		the terms of the trust and this chapter do not allocate the 601
903	903		disbursement between income and principal; and 602
904	904		(c) Within 65 days after the fiscal year ends, add any 603
905	905		undistributed income to principal, unless otherwise provided by 604
906	906		the terms of the trust. 605
907	907		(4) A fiduciary may exercise the power to adjust under s. 606
908	908		738.203(1), convert an income trust to a unitrust under ss. 607
909	909		738.301-738.310, change the percentage or method used to 608
910	910		calculate a unitrust amount under ss. 738.301 -738.310, or 609
911	911		convert a unitrust to an income trust under ss. 738.301-738.310 610
912	912		if the fiduciary determines the exercise of the power will 611
913	913		assist the fiduciary to administer the trust or estate 612
914	914		impartially. 613
915	915		(5) The fiduciary must consider the following factors in 614
916	916		making the determination in subsection (4), inclu ding: 615
917	917		(a) The terms of the trust. 616
918	918		(b) The nature, distribution standards, and expected 617
919	919		duration of the trust. 618
920	920		(c) The effect of the allocation rules, including specific 619
921	921		adjustments between income and principal, under ss. 738.301 -620
922	922		738.416. 621
923	923		(d) The desirability of liquidity and regularity of 622
924	924		income. 623
925	925		(e) The desirability of the preservation and appreciation 624
926	926		of principal. 625
927		-	~~ENROLLED~~
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935	935		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
936	936
937	937
938	938
939	939		(f) The extent to which an asset is used or may be used by 626
940	940		a beneficiary. 627
941	941		(g) The increase or decrease in the value of principal 628
942	942		assets, reasonably determined by the fiduciary. 629
943	943		(h) Whether and to what extent the terms of the trust give 630
944	944		the fiduciary power to accumulate income or invade principal or 631
945	945		prohibit the fiduciary from accumulating income or invading 632
946	946		principal. 633
947	947		(i) The extent to which the fiduciary has accumulated 634
948	948		income or invaded principal in preceding accounting periods. 635
949	949		(j) The effect of current and reasonably expected economic 636
950	950		conditions. 637
951	951		(k) The reasonably expected tax consequences of the 638
952	952		exercise of the power. 639
953	953		(l) The identities and circumstances of the beneficiaries. 640
954	954		(6) Except as provided in ss. 738.301 -738.310, this 641
955	955		chapter pertains to the administration of a trust and is 642
956	956		applicable to any trust that is administered in this state or 643
957	957		under its law. This chapter also applies to any estate that is 644
958	958		administered in this state unless the provision is limited in 645
959	959		application to a trustee, rather than a fiduciary. 646
960	960		Section 8. Section 738.202, Florida Statutes, is amended 647
961	961		to read: 648
962	962		(Substantial rewording of section. See 649
963	963		s. 738.202, F.S., for present text.) 650
964		-	~~ENROLLED~~
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972	972		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
973	973
974	974
975	975
976	976		738.202 Judicial review of exercise of discretionary 651
977	977		power; request for instruction. — 652
978	978		(1) As used in this section, the term "fiduciary decision" 653
979	979		means any of the following: 654
980	980		(a) A fiduciary's allo cation between income and principal 655
981	981		or other determination regarding income and principal required 656
982	982		or authorized by the terms of the trust or this chapter. 657
983	983		(b) The fiduciary's exercise or nonexercise of a 658
984	984		discretionary power regarding income and principa l granted by 659
985	985		the terms of the trust or this chapter, including the power to 660
986	986		adjust under s. 738.203, convert an income trust to a unitrust 661
987	987		under ss. 738.301-738.310, change the percentage or method used 662
988	988		to calculate a unitrust amount under ss. 738.301 -738.310, 663
989	989		convert a unitrust to an income trust under ss. 738.301 -738.310, 664
990	990		or the method used to make property productive of income under 665
991	991		s. 738.413. 666
992	992		(c) The fiduciary's implementation of a decision described 667
993	993		in paragraph (a) or paragraph (b). 668
994	994		(2) The court may not order a fiduciary to change a 669
995	995		fiduciary decision unless the court determines that the 670
996	996		fiduciary decision was an abuse of the fiduciary's discretion. A 671
997	997		court may not determine that a fiduciary abused its discretion 672
998	998		merely because the court would ha ve exercised the discretion in 673
999	999		a different manner or would not have exercised the discretion. 674
1000	1000		(3) If the court determines that a fiduciary decision was 675
1001		-	~~ENROLLED~~
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1009	1009		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1010	1010
1011	1011
1012	1012
1013	1013		an abuse of the fiduciary's discretion, the court may order a 676
1014	1014		remedy authorized by law, including thos e prescribed under ss. 677
1015	1015		736.1001 and 736.1002. Following such a determination by the 678
1016	1016		court, the remedy is to place the beneficiaries in the positions 679
1017	1017		the beneficiaries would have occupied if the fiduciary had not 680
1018	1018		abused its discretion, as follows: 681
1019	1019		(a) The court may order the fiduciary to exercise or 682
1020	1020		refrain from exercising the power to adjust under s. 738.203; 683
1021	1021		(b) The court may order the fiduciary to exercise or 684
1022	1022		refrain from exercising the power to convert an income trust to 685
1023	1023		a unitrust under ss. 738.301 -738.310, change the percentage or 686
1024	1024		method used to calculate a unitrust amount under ss. 738.301 -687
1025	1025		738.310, or convert a unitrust to an income trust under ss. 688
1026	1026		738.301-738.310; 689
1027	1027		(c) The court may compel the fiduciary to take any of the 690
1028	1028		actions listed under s. 738.413; 691
1029	1029		(d) To the extent that the abuse of discretion has 692
1030	1030		resulted in no distribution to a beneficiary or a distribution 693
1031	1031		that is too small, the court shall require the fiduciary to 694
1032	1032		distribute from the trust to the beneficiary an amount the court 695
1033	1033		determines will restore the beneficiary, in whole or in part, to 696
1034	1034		his or her appropriate position; 697
1035	1035		(e) To the extent that the abuse of discretion has 698
1036	1036		resulted in a distribution to a beneficiary that is too large, 699
1037	1037		the court shall restore the beneficiaries, the t rust, or both, 700
1038		-	~~ENROLLED~~
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1046	1046		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1047	1047
1048	1048
1049	1049
1050	1050		in whole or in part, to their appropriate positions by requiring 701
1051	1051		the fiduciary to withhold an amount from one or more future 702
1052	1052		distributions to the beneficiary who received the distribution 703
1053	1053		that was too large or requiring that beneficiary to r eturn some 704
1054	1054		or all of the distribution to the trust; or 705
1055	1055		(f) To the extent that the court is unable, after applying 706
1056	1056		paragraphs (a)-(e), to restore the beneficiaries or the trust, 707
1057	1057		or both, to the positions they would have occupied if the 708
1058	1058		fiduciary had not abused its discretion, the court may require 709
1059	1059		the fiduciary to pay an appropriate amount from its own funds to 710
1060	1060		one or more of the beneficiaries or the trust or both. 711
1061	1061		(4) On petition by the fiduciary for instruction, the 712
1062	1062		court may determine whether a propos ed fiduciary decision will 713
1063	1063		result in an abuse of the fiduciary's discretion. If the 714
1064	1064		petition describes the proposed decision, contains sufficient 715
1065	1065		information to inform the beneficiary of the reasons for making 716
1066	1066		the proposed decision and the facts on which t he fiduciary 717
1067	1067		relies, and explains how the beneficiary will be affected by the 718
1068	1068		proposed decision, a beneficiary who opposes the proposed 719
1069	1069		decision has the burden to establish that it will result in an 720
1070	1070		abuse of the fiduciary's discretion. 721
1071	1071		(5) If an action is instituted alleging an abuse of 722
1072	1072		discretion in the exercise or nonexercise of the fiduciary's 723
1073	1073		discretion under this chapter and the court determines no abuse 724
1074	1074		of discretion has occurred, the fiduciary's costs and attorney 725
1075		-	~~ENROLLED~~
1076		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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1083	1083		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1084	1084
1085	1085
1086	1086
1087	1087		fees incurred in defending the act ion shall be paid from the 726
1088	1088		trust assets. 727
1089	1089		Section 9. Section 738.203, Florida Statutes, is created 728
1090	1090		to read: 729
1091	1091		738.203 Fiduciary's power to adjust. — 730
1092	1092		(1) Except as otherwise provided in the terms of a trust 731
1093	1093		or this section, a fiduciary, in a record with out court 732
1094	1094		approval, may adjust between income and principal if the 733
1095	1095		fiduciary determines that the exercise of the power to adjust 734
1096	1096		will assist the fiduciary in administering the trust or estate 735
1097	1097		impartially. 736
1098	1098		(2) This section does not create a duty to exerci se or 737
1099	1099		consider the power to adjust under subsection (1) or to inform a 738
1100	1100		beneficiary about the applicability of this section. 739
1101	1101		(3) A fiduciary that in good faith exercises or fails to 740
1102	1102		exercise the power to adjust under subsection (1) is not liable 741
1103	1103		to a person affected by the exercise or failure to exercise. 742
1104	1104		(4) In deciding whether and to what extent to exercise the 743
1105	1105		power to adjust under subsection (1), a fiduciary shall consider 744
1106	1106		all factors the fiduciary considers relevant, including relevant 745
1107	1107		factors in s. 738.201(5) and the application of ss. 738.401(9), 746
1108	1108		738.408, and 738.413. 747
1109	1109		(5) A fiduciary may not exercise the power under 748
1110	1110		subsection (1) to make an adjustment or under s. 738.408 to make 749
1111	1111		a determination that an allocation is insubstantial if: 750
1112		-	~~ENROLLED~~
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1120	1120		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1121	1121
1122	1122
1123	1123
1124	1124		(a) The adjustment or determination would reduce the 751
1125	1125		amount payable to a current income beneficiary from a trust that 752
1126	1126		qualifies for a special tax benefit, except to the extent that 753
1127	1127		the adjustment is made to provide for a reasonable apportionment 754
1128	1128		of the total return of the trust between the current income 755
1129	1129		beneficiary and successor beneficiaries; 756
1130	1130		(b) The adjustment or determination would change the 757
1131	1131		amount payable to a beneficiary, as a fixed annuity or a fixed 758
1132	1132		fraction of the value of the trust assets, under the terms of 759
1133	1133		the trust; 760
1134	1134		(c) The adjustment or determination would reduce an amount 761
1135	1135		that is permanently set aside for a charitable purpose under the 762
1136	1136		terms of the trust unless both income and principal are set 763
1137	1137		aside for the charitable purpose; 764
1138	1138		(d) Possessing or exercising the power would cause a 765
1139	1139		person to be treated as the owner of all or part of the trust 766
1140	1140		for federal income tax purposes and the person would not be 767
1141	1141		treated as the owner if the fiduciary did not possess the power 768
1142	1142		to adjust; 769
1143	1143		(e) Possessing or exercising the power would cause all or 770
1144	1144		part of the value of the trust assets to be included in the 771
1145	1145		gross estate of an individual for federal real estate tax 772
1146	1146		purposes and the assets would not be included in the gross 773
1147	1147		estate of the individual if the fiduci ary did not possess the 774
1148	1148		power to adjust; 775
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1157	1157		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1158	1158
1159	1159
1160	1160
1161	1161		(f) Possessing or exercising the power would cause an 776
1162	1162		individual to be treated as making a gift for federal gift tax 777
1163	1163		purposes; 778
1164	1164		(g) The fiduciary is not an independent person; 779
1165	1165		(h) The trust is irrevocable and provides for income to be 780
1166	1166		paid to the settlor, and possessing or exercising the power 781
1167	1167		would cause the adjusted principal or income to be considered an 782
1168	1168		available resource or available income under a public -benefit 783
1169	1169		program; or 784
1170	1170		(i) The trust is a unitrust u nder ss. 738.301-738.310. 785
1171	1171		(6) If paragraph (5)(d), paragraph (5)(e), paragraph 786
1172	1172		(5)(f), or paragraph (5)(g) applies to a fiduciary: 787
1173	1173		(a) A cofiduciary to which paragraphs (5)(d) -(g) do not 788
1174	1174		apply may exercise the power to adjust, unless the exercise of 789
1175	1175		the power by the remaining cofiduciary or cofiduciaries is not 790
1176	1176		permitted by the terms of the trust or law other than this 791
1177	1177		chapter; or 792
1178	1178		(b) If there is no cofiduciary to which paragraphs (5)(d) -793
1179	1179		(g) do not apply, the fiduciary may appoint a cofiduciary to 794
1180	1180		which paragraphs (5)(d) -(g) do not apply which may be a special 795
1181	1181		fiduciary with limited powers, and the appointed cofiduciary may 796
1182	1182		exercise the power to adjust under subsection (1), unless the 797
1183	1183		appointment of a cofiduciary or the exercise of the power by a 798
1184	1184		cofiduciary is not permitted by the terms of the trust or law 799
1185	1185		other than this chapter. 800
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1194	1194		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1195	1195
1196	1196
1197	1197
1198	1198		(7) A fiduciary may release or delegate to a cofiduciary 801
1199	1199		the power to adjust under subsection (1) if the fiduciary 802
1200	1200		determines that the fiduciary's possession or exercise of the 803
1201	1201		power will or may: 804
1202	1202		(a) Cause a result described in paragraph (5)(a), 805
1203	1203		paragraph (5)(b), paragraph (5)(c), paragraph (5)(d), paragraph 806
1204	1204		(5)(e), paragraph (5)(f), or paragraph (5)(h); or 807
1205	1205		(b) Deprive the trust of a tax benefit or impose a tax 808
1206	1206		burden not described in paragraph (5)(a), paragraph (5)(b), 809
1207	1207		paragraph (5)(c), paragraph (5)(d), paragraph (5)(e), or 810
1208	1208		paragraph (5)(f). 811
1209	1209		(8) A fiduciary's release or delegation to a cofiduciary 812
1210	1210		under subsection (7) of the power to adjust under subsection 813
1211	1211		(1): 814
1212	1212		(a) Must be in a record; 815
1213	1213		(b) Applies to the entire power, unless the release or 816
1214	1214		delegation provides a limitation, which may be a limitation to 817
1215	1215		the power to adjust: 818
1216	1216		1. From income to principal; 819
1217	1217		2. From principal to income; 820
1218	1218		3. For specified property; or 821
1219	1219		4. In specified circumstances. 822
1220	1220		(c) For a delegation, may be modified by a redelegation 823
1221	1221		under this subsection by the cofiduciary to which the delegation 824
1222	1222		is made; and 825
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1231	1231		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1232	1232
1233	1233
1234	1234
1235	1235		(d) Subject to paragraph (c), is permanent, unless the 826
1236	1236		release or delegation provide s a specified period, including a 827
1237	1237		period measured by the life of an individual or the lives of 828
1238	1238		more than one individual. 829
1239	1239		(9) Terms of a trust that deny or limit the power to 830
1240	1240		adjust between income and principal do not affect the 831
1241	1241		application of this sectio n, unless the terms of the trust 832
1242	1242		expressly deny or limit the power to adjust under subsection 833
1243	1243		(1). 834
1244	1244		(10) The exercise of the power to adjust under subsection 835
1245	1245		(1) in any accounting period may apply to the current period, 836
1246	1246		the immediately preceding period, a nd one or more subsequent 837
1247	1247		periods. 838
1248	1248		(11) A description of the exercise of the power to adjust 839
1249	1249		under subsection (1) must be: 840
1250	1250		(a) Included in a report, if any, sent to beneficiaries 841
1251	1251		under s. 736.0813; or 842
1252	1252		(b) Communicated at least annually to the qualified 843
1253	1253		beneficiaries as defined in s. 736.0103 other than the Attorney 844
1254	1254		General. 845
1255	1255		(12) With respect to a trust in existence on January 1, 846
1256	1256		2003: 847
1257	1257		(a) A fiduciary may not have the power to adjust under 848
1258	1258		this section until the statement required in subsect ion (13) is 849
1259	1259		provided and either no objection is made or any objection which 850
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1268	1268		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1269	1269
1270	1270
1271	1271
1272	1272		is made has been terminated. 851
1273	1273		1. An objection is made if, within 60 days after the date 852
1274	1274		of the statement required in subsection (13), a super majority 853
1275	1275		of the eligible beneficiarie s deliver to the fiduciary a written 854
1276	1276		objection to the application of this section to such trust. An 855
1277	1277		objection shall be deemed to be delivered to the fiduciary on 856
1278	1278		the date the objection is mailed to the mailing address listed 857
1279	1279		in the notice provided in subse ction (13). 858
1280	1280		2. An objection is terminated upon the earlier of the 859
1281	1281		receipt of consent from a super majority of eligible 860
1282	1282		beneficiaries of the class that made the objection, or the 861
1283	1283		resolution of the objection under paragraph (c). 862
1284	1284		(b) An objection or conse nt under this section may be 863
1285	1285		executed by a legal representative or natural guardian of a 864
1286	1286		beneficiary without the filing of any proceeding or approval of 865
1287	1287		any court. 866
1288	1288		(c) If an objection is delivered to the fiduciary, then 867
1289	1289		the fiduciary may petition the cir cuit court for an order 868
1290	1290		quashing the objection and vesting in such fiduciary the power 869
1291	1291		to adjust under this section. The burden will be on the 870
1292	1292		objecting beneficiaries to prove that the power to adjust would 871
1293	1293		be inequitable, illegal, or otherwise in contrave ntion of the 872
1294	1294		settlor's intent. The court may award costs and attorney fees 873
1295	1295		relating to the fiduciary's petition in the same manner as in 874
1296	1296		chancery actions. When costs and attorney fees are to be paid 875
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1305	1305		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1306	1306
1307	1307
1308	1308
1309	1309		out of the trust, the court may, in its discretion, direc t from 876
1310	1310		which part of the trust they shall be paid. 877
1311	1311		(d) If no timely objection is made or if the fiduciary is 878
1312	1312		vested with the power to adjust by court order, the fiduciary 879
1313	1313		may thereafter exercise the power to adjust without providing 880
1314	1314		notice of its intent to do so unless, in vesting the fiduciary 881
1315	1315		with the power to adjust, the court determines that unusual 882
1316	1316		circumstances require otherwise. 883
1317	1317		(e)1. If a fiduciary makes a good faith effort to comply 884
1318	1318		with the notice provisions of subsection (13), but fails to 885
1319	1319		deliver notice to one or more beneficiaries entitled to such 886
1320	1320		notice, neither the validity of the notice required under this 887
1321	1321		subsection nor the fiduciary's power to adjust under this 888
1322	1322		section shall be affected until the fiduciary has actual notice 889
1323	1323		that one or more beneficiaries entitled to notice were not 890
1324	1324		notified. Until the fiduciary has actual notice of the notice 891
1325	1325		deficiency, the fiduciary shall have all of the powers and 892
1326	1326		protections granted a fiduciary with the power to adjust under 893
1327	1327		this chapter. 894
1328	1328		2. When the fiduciary has actual notice that one or more 895
1329	1329		beneficiaries entitled to notice under subsection (13) were not 896
1330	1330		notified, the fiduciary's power to adjust under this section 897
1331	1331		shall cease until all beneficiaries who are entitled to such 898
1332	1332		notice, including thos e who were previously provided with such 899
1333	1333		notice, are notified and given the opportunity to object as 900
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1342	1342		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1343	1343
1344	1344
1345	1345
1346	1346		provided for under this subsection. 901
1347	1347		(f) The objection of a super majority of eligible 902
1348	1348		beneficiaries under this subsection shall be valid for a period 903
1349	1349		of 1 year after the date of the notice set forth in subsection 904
1350	1350		(13). Upon expiration of the objection, the fiduciary may 905
1351	1351		thereafter give a new notice under subsection (13). 906
1352	1352		(g) This section is not intended to create or imply a duty 907
1353	1353		of the fiduciary of a tru st existing on January 1, 2003, to seek 908
1354	1354		a power to adjust under this subsection or to give the notice 909
1355	1355		described in subsection (13) if the fiduciary does not desire to 910
1356	1356		have a power to adjust under this section, and no inference of 911
1357	1357		impropriety shall be made as the result of a fiduciary not 912
1358	1358		seeking a power to adjust under this subsection. 913
1359	1359		(13)(a) A fiduciary of a trust in existence on January 1, 914
1360	1360		2003, that is not prohibited under subsection (5) from 915
1361	1361		exercising the power to adjust shall, any time before initi ally 916
1362	1362		exercising the power, provide to all eligible beneficiaries a 917
1363	1363		statement containing the following: 918
1364	1364		1. The name, telephone number, street address, and mailing 919
1365	1365		address of the fiduciary and of any person who may be contacted 920
1366	1366		for further information; 921
1367	1367		2. A statement that unless a super majority of the 922
1368	1368		eligible beneficiaries objects to the application of this 923
1369	1369		section to the trust within 60 days after the date the statement 924
1370	1370		pursuant to this subsection was served, this section shall apply 925
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1379	1379		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1380	1380
1381	1381
1382	1382
1383	1383		to the trust; and 926
1384	1384		3. A statement that, if this section applies to the trust, 927
1385	1385		the fiduciary will have the power to adjust between income and 928
1386	1386		principal and that such a power may have an effect on the 929
1387	1387		distributions to such beneficiary from the trust. 930
1388	1388		(b) The statement may contain information regarding a 931
1389	1389		fiduciary's obligation with respect to the power to adjust 932
1390	1390		between income and principal under this section. 933
1391	1391		(c) The statement shall be served informally, in the 934
1392	1392		manner provided in the Florida Rules of Civil Procedure relat ing 935
1393	1393		to service of pleadings subsequent to the initial pleading. The 936
1394	1394		statement may be served on a legal representative or natural 937
1395	1395		guardian of a beneficiary without the filing of any proceeding 938
1396	1396		or approval of any court. 939
1397	1397		(14) For purposes of subsections (12 ) and (13), the term: 940
1398	1398		(a) "Eligible beneficiaries" means: 941
1399	1399		1. If at the time the determination is made there are one 942
1400	1400		or more beneficiaries described in s. 736.0103(19)(c), the 943
1401	1401		beneficiaries described in s. 736.0103(19)(a) and (c); or 944
1402	1402		2. If there is no beneficiary described in s. 945
1403	1403		736.0103(19)(c), the beneficiaries described in s. 946
1404	1404		736.0103(19)(a) and (b). 947
1405	1405		(b) "Super majority of the eligible beneficiaries" means: 948
1406	1406		1. If at the time the determination is made there are one 949
1407	1407		or more beneficiaries described in s. 736.0103(19)(c), at least 950
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1416	1416		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1417	1417
1418	1418
1419	1419
1420	1420		two-thirds in interest of the beneficiaries described in s. 951
1421	1421		736.0103(19)(a) or two -thirds in interest of the beneficiaries 952
1422	1422		described in s. 736.0103(19)(c), if the interests of the 953
1423	1423		beneficiaries are reasonably ascertainable; otherwise, it means 954
1424	1424		two-thirds in number of either such class; or 955
1425	1425		2. If there is no beneficiary described in s. 956
1426	1426		736.0103(19)(c), at least two -thirds in interest of the 957
1427	1427		beneficiaries described in s. 736.0103(19)(a) or two -thirds in 958
1428	1428		interest of the beneficiaries described in s. 736.0103(19)(b), 959
1429	1429		if the interests of the beneficiaries are reasonably 960
1430	1430		ascertainable, otherwise, two -thirds in number of either such 961
1431	1431		class. 962
1432	1432		(15) A trust exists on January 1, 2003, if it is not 963
1433	1433		revocable on January 1, 2003. A trust is revocable if revocable 964
1434	1434		by the settlor alone or in conjunction with any other person. A 965
1435	1435		trust is not revocable for purposes of this section if revocable 966
1436	1436		by the settlor only with the consent of all persons having a 967
1437	1437		beneficial interest in the propert y. 968
1438	1438		Section 10. Section 738.301, Florida Statutes, is amended 969
1439	1439		to read: 970
1440	1440		(Substantial rewording of section. See 971
1441	1441		s. 738.301, F.S., for present text). 972
1442	1442		738.301 Definitions. —For purposes of this section and ss. 973
1443	1443		738.302-738.310: 974
1444	1444		(1) "Applicable value" means the amount of the net fair 975
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1453	1453		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1454	1454
1455	1455
1456	1456
1457	1457		market value of a trust taken into account under s. 738.307. 976
1458	1458		(2) "Express unitrust" means a trust for which, under the 977
1459	1459		terms of the trust without regard to this section and ss. 978
1460	1460		738.302-738.310, net income must be calculat ed as a unitrust 979
1461	1461		amount. 980
1462	1462		(3) "Income trust" means a trust, created by an inter 981
1463	1463		vivos or testamentary instrument, that directs or permits the 982
1464	1464		trustee to distribute the net income of the trust to one or more 983
1465	1465		persons, in fixed proportions or in amounts or p roportions 984
1466	1466		determined by the trustee and regardless of whether the trust 985
1467	1467		directs or permits the trustee to distribute the principal of 986
1468	1468		the trust to one or more such persons. 987
1469	1469		(4) "Net fair market value of a trust" means the fair 988
1470	1470		market value of the assets of the trust, less the reasonably 989
1471	1471		known noncontingent liabilities of the trust. 990
1472	1472		(5) "Unitrust" means a trust for which net income is a 991
1473	1473		unitrust amount. The term includes an express unitrust. 992
1474	1474		(6) "Unitrust amount" means an amount computed by 993
1475	1475		multiplying a determined value of a trust by a determined 994
1476	1476		percentage. For a unitrust administered under a unitrust policy, 995
1477	1477		the term means the applicable value multiplied by the unitrust 996
1478	1478		rate. 997
1479	1479		(7) "Unitrust policy" means a policy described in ss. 998
1480	1480		738.301-738.310 and adopted under s. 738.303. 999
1481	1481		(8) "Unitrust rate" means the rate used to compute the 1000
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1490	1490		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1491	1491
1492	1492
1493	1493
1494	1494		unitrust amount for a unitrust administered under a unitrust 1001
1495	1495		policy. 1002
1496	1496		Section 11. Section 738.302, Florida Statutes, is amended 1003
1497	1497		to read: 1004
1498	1498		(Substantial rewording of sect ion. See 1005
1499	1499		s. 738.302, F.S., for present text.) 1006
1500	1500		738.302 Applications; duties and remedies. — 1007
1501	1501		(1) Except as otherwise provided in subsection (2), ss. 1008
1502	1502		738.301-738.310 apply to all of the following: 1009
1503	1503		(a) An income trust, unless the terms of the trust 1010
1504	1504		expressly prohibit the use of ss. 738.301 -738.310 by a specific 1011
1505	1505		reference to this paragraph or corresponding provision of prior 1012
1506	1506		law, or an explicit expression of intent that net income not be 1013
1507	1507		calculated as a unitrust amount. 1014
1508	1508		(b) An express unitrust, except to the extent that the 1015
1509	1509		terms of the trust explicitly: 1016
1510	1510		1. Prohibit the use of ss. 738.301 -738.310 by a specific 1017
1511	1511		reference to this paragraph or corresponding provision of prior 1018
1512	1512		law; 1019
1513	1513		2. Prohibit conversion to an income trust; or 1020
1514	1514		3. Limit changes to the me thod of calculating the unitrust 1021
1515	1515		amount. 1022
1516	1516		(c) A unitrust that had been converted from an income 1023
1517	1517		trust. 1024
1518	1518		(2) The provisions of ss. 738.301 -738.310 do not apply to 1025
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1527	1527		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1528	1528
1529	1529
1530	1530
1531	1531		a trust described in s. 170(f)(2)(B), s. 642(c)(5), s. 664(d), 1026
1532	1532		s. 2702(a)(3)(A)(ii) or (iii) , or s. 2702(b) of the Internal 1027
1533	1533		Revenue Code. 1028
1534	1534		(3) An income trust to which ss. 738.301 -738.310 apply 1029
1535	1535		under paragraph (1)(a) may be converted to a unitrust under ss. 1030
1536	1536		738.301-738.310 regardless of the terms of the trust concerning 1031
1537	1537		distributions. Conversion to a unitrust under ss. 738.301 -1032
1538	1538		738.310 does not affect other terms of the trust concerning 1033
1539	1539		distributions of income or principal. 1034
1540	1540		(4) Sections 738.301 -738.310 apply to an estate only to 1035
1541	1541		the extent that a trust is a beneficiary of the estate. To the 1036
1542	1542		extent of the trust's interest in the estate, the estate may be 1037
1543	1543		administered as a unitrust, the administration of the estate as 1038
1544	1544		a unitrust may be discontinued, or the percentage or method used 1039
1545	1545		to calculate the unitrust amount may be changed, in the same 1040
1546	1546		manner as for a trust under those sections. 1041
1547	1547		(5) The provisions of ss. 738.301 -738.310 do not create a 1042
1548	1548		duty to take or consider action under ss. 738.301 -738.310 or to 1043
1549	1549		inform a beneficiary about the applicability of ss. 738.301 -1044
1550	1550		738.310. 1045
1551	1551		(6) A fiduciary that in good faith takes or fails to take 1046
1552	1552		an action under ss. 738.301 -738.310 is not liable to a person 1047
1553	1553		affected by the action or inaction. 1048
1554	1554		Section 12. Section 738.303, Florida Statutes, is amended 1049
1555	1555		to read: 1050
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1564	1564		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1565	1565
1566	1566
1567	1567
1568	1568		(Substantial rewording of section. See 1051
1569	1569		s. 738.303, F.S., for present text.) 1052
1570	1570		738.303 Authority of fiduciary. — 1053
1571	1571		(1) By complying with subsections (2) and (6), and without 1054
1572	1572		court approval, a fiduciary may do any of the following: 1055
1573	1573		(a) Convert an income trust to a unitrust if the fiduciary 1056
1574	1574		adopts in a record a unitrust policy for the trust which 1057
1575	1575		provides: 1058
1576	1576		1. That in administering the trust, the net income of the 1059
1577	1577		trust will be a unitrust amount rather than net income 1060
1578	1578		determined without regard to ss. 738.301 -738.310; and 1061
1579	1579		2. The percentage and method used to calculate the 1062
1580	1580		unitrust amount. 1063
1581	1581		(b) Change the percentage or method used to calculate a 1064
1582	1582		unitrust amount for a unitrust if the fiduciary adopts in a 1065
1583	1583		record a unitrust policy or an amendment or replacement of a 1066
1584	1584		unitrust policy providing charges in the pe rcentage or method 1067
1585	1585		used to calculate the unitrust amount. 1068
1586	1586		(c) Convert a unitrust to an income trust if the fiduciary 1069
1587	1587		adopts in a record a determination that, in administering the 1070
1588	1588		trust, the net income of the trust will be net income determined 1071
1589	1589		without regard to ss. 738.301-738.310 rather than a unitrust 1072
1590	1590		amount. 1073
1591	1591		(2) A fiduciary may take an action under subsection (1) if 1074
1592	1592		all of the following apply: 1075
1593		-	~~ENROLLED~~
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1600	1600		Page 44 of 113
1601	1601		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1602	1602
1603	1603
1604	1604
1605	1605		(a) The fiduciary determines that the action will assist 1076
1606	1606		the fiduciary to administer a trust impartially. 1077
1607	1607		(b) The fiduciary sends a notice in a record to the 1078
1608	1608		qualified beneficiaries determined under ss. 736.0103 and 1079
1609	1609		736.0110 in the manner required by s. 738.304, describing and 1080
1610	1610		proposing to take the action. 1081
1611	1611		(c) The fiduciary sends a copy of the notice under 1082
1612	1612		paragraph (b) to each settlor of the trust which is: 1083
1613	1613		1. If an individual, living; or 1084
1614	1614		2. If not an individual, in existence. 1085
1615	1615		(d) At least one member of each class of the qualified 1086
1616	1616		beneficiaries determined under ss. 736.0103 and 736.0110, other 1087
1617	1617		than the Attorney General, receiving the notice under paragraph 1088
1618	1618		(b) is: 1089
1619	1619		1. If an individual, legally competent; 1090
1620	1620		2. If not an individual, in existence; or 1091
1621	1621		3. Represented in the manner provided in s. 738.304(2). 1092
1622	1622		(e) The fiduciary does not receive, by the date specified 1093
1623	1623		in the notice under s. 738.304(4)(e), an objection in a record 1094
1624	1624		to the action proposed under paragraph (b) from a person to 1095
1625	1625		which the notice under paragraph (b) is sent. 1096
1626	1626		(3) If a fiduciary receives, not later than the date 1097
1627	1627		stated in the notice under s. 738.304(4)(e), an objection in a 1098
1628	1628		record described in s. 738.304(4)(d) to a proposed action, the 1099
1629	1629		fiduciary or a beneficiary may request the court to have the 1100
1630		-	~~ENROLLED~~
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1638	1638		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1639	1639
1640	1640
1641	1641
1642	1642		action taken as proposed, taken with modifications, or 1101
1643	1643		prevented. A person described i n s. 738.304(1) may oppose the 1102
1644	1644		proposed action in the proceeding under this subsection 1103
1645	1645		regardless of whether the person: 1104
1646	1646		(a) Consented under s. 738.304(3); or 1105
1647	1647		(b) Objected under s. 738.304(4)(d). 1106
1648	1648		(4) If, after sending a notice under paragraph (2)(b), a 1107
1649	1649		fiduciary decides not to take the action proposed in the notice, 1108
1650	1650		the fiduciary must notify in a record each person described in 1109
1651	1651		s. 738.304(1) of the decision not to take the action and the 1110
1652	1652		reasons for the decision. 1111
1653	1653		(5) If a beneficiary requests in a r ecord that a fiduciary 1112
1654	1654		take an action described in subsection (1) and the fiduciary 1113
1655	1655		declines to act or does not act within 60 days after receiving 1114
1656	1656		the request, the beneficiary may request the court to direct the 1115
1657	1657		fiduciary to take the action requested. 1116
1658	1658		(6) In deciding whether and how to take an action 1117
1659	1659		authorized in subsection (1), or whether and how to respond to a 1118
1660	1660		request by a beneficiary under subsection (5), a fiduciary must 1119
1661	1661		consider all factors relevant to the trust and beneficiaries, 1120
1662	1662		including the relevant factors listed in s. 738.201(5). 1121
1663	1663		(7) A fiduciary may release or delegate the power to 1122
1664	1664		convert an income trust to a unitrust under paragraph (1)(a), 1123
1665	1665		change the percentage or method used to calculate a unitrust 1124
1666	1666		amount under paragraph (1)(b), or conve rt a unitrust to an 1125
1667		-	~~ENROLLED~~
1668		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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1675	1675		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1676	1676
1677	1677
1678	1678
1679	1679		income trust under paragraph (1)(c), for a reason described in 1126
1680	1680		s. 738.203(7) and in the manner described in s. 738.203(8). 1127
1681	1681		Section 13. Section 738.304, Florida Statutes, is created 1128
1682	1682		to read: 1129
1683	1683		738.304 Notice.— 1130
1684	1684		(1) A notice required by s. 738.303(2)(b) must be sent in 1131
1685	1685		a manner authorized under s. 736.0109 to all of the following: 1132
1686	1686		(a) The qualified beneficiaries determined under s. 1133
1687	1687		736.0103, other than the Attorney General. 1134
1688	1688		(b) Each person that is granted a power over the trust by 1135
1689	1689		the terms of the trust, to the extent that the power is 1136
1690	1690		exercisable when the person is not then serving as a trustee: 1137
1691	1691		1. Including all of the following: 1138
1692	1692		a. Power over the investment, management, or distribution 1139
1693	1693		of trust property or other matters of tr ust administration. 1140
1694	1694		b. Power to appoint or remove a trustee or person 1141
1695	1695		described in this paragraph. 1142
1696	1696		2. Excluding all of the following: 1143
1697	1697		a. Power of appointment. 1144
1698	1698		b. Power of a beneficiary over the trust, to the extent 1145
1699	1699		that the exercise or nonexercise of the power affects the 1146
1700	1700		beneficial interest of the beneficiary or another beneficiary 1147
1701	1701		represented by the beneficiary under ss. 736.0301 -736.0306 with 1148
1702	1702		respect to the exercise or nonexercise of the power. 1149
1703	1703		c. Power over the trust if the terms of the trust provide 1150
1704		-	~~ENROLLED~~
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1712	1712		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1713	1713
1714	1714
1715	1715
1716	1716		that the power is held in a nonfiduciary capacity and the power 1151
1717	1717		must be held in a nonfiduciary capacity to achieve a tax 1152
1718	1718		objective under the Internal Revenue Code. 1153
1719	1719		(c) Each person that is granted a power by the terms of 1154
1720	1720		the trust to appoint or re move a trustee or person described in 1155
1721	1721		paragraph (b) to the extent the power is exercisable when the 1156
1722	1722		person that exercises the power is not then serving as a trustee 1157
1723	1723		or person described in paragraph (b). 1158
1724	1724		(2) The representation provisions of ss. 736.0301 -736.0306 1159
1725	1725		apply to notice under this section. 1160
1726	1726		(3) A person may consent in a record at any time to action 1161
1727	1727		proposed under s. 738.303(2)(b). A notice required by s. 1162
1728	1728		738.303(2)(b) need not be sent to a person that consents under 1163
1729	1729		this subsection. 1164
1730	1730		(4) A notice required under s. 738.303(2)(b) must include 1165
1731	1731		all of the following: 1166
1732	1732		(a) The action proposed under s. 738.303(2)(b). 1167
1733	1733		(b) For a conversion of an income trust to a unitrust, a 1168
1734	1734		copy of the unitrust policy adopted under s. 738.303(1)(a). 1169
1735	1735		(c) For a change in the percentage or method used to 1170
1736	1736		calculate the unitrust amount, a copy of the unitrust policy or 1171
1737	1737		amendment or replacement of the unitrust policy adopted under s. 1172
1738	1738		738.303(1)(b). 1173
1739	1739		(d) A statement that the person to which the notice is 1174
1740	1740		sent may object to the proposed action by stating in a record 1175
1741		-	~~ENROLLED~~
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1749	1749		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1750	1750
1751	1751
1752	1752
1753	1753		the basis for the objection and sending or delivering the record 1176
1754	1754		to the fiduciary. 1177
1755	1755		(e) The date by which an objection under paragraph (d) 1178
1756	1756		must be received by the fiduciary, which must be at least 30 1179
1757	1757		days after the date the notice is sent. 1180
1758	1758		(f) The date on which the action is proposed to be taken 1181
1759	1759		and the date on which the action is proposed to take effect. 1182
1760	1760		(g) The name and contact information of the fiduciary. 1183
1761	1761		(h) The name and contact information of a person that may 1184
1762	1762		be contacted for additional information. 1185
1763	1763		Section 14. Section 738.305, Florida Statutes, is created 1186
1764	1764		to read: 1187
1765	1765		738.305 Unitrust policy. — 1188
1766	1766		(1) In administering a unitrust under ss. 738.301 -738.310, 1189
1767	1767		a fiduciary shall follow a unitrust policy ado pted under s. 1190
1768	1768		738.303(1)(a) or (b) or amended or replaced under s. 1191
1769	1769		738.303(1)(b). 1192
1770	1770		(2) A unitrust policy must provide all of the following: 1193
1771	1771		(a) The unitrust rate or method for determining the 1194
1772	1772		unitrust rate under s. 738.306. 1195
1773	1773		(b) The method for determin ing the applicable value under 1196
1774	1774		s. 738.307. 1197
1775	1775		(c) The rules described in ss. 738.306 -738.310 which apply 1198
1776	1776		in the administration of the unitrust, whether the rules are: 1199
1777	1777		1. Mandatory as provided in ss. 738.307(1) and (3), 1200
1778		-	~~ENROLLED~~
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1786	1786		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1787	1787
1788	1788
1789	1789
1790	1790		738.308(1), and 738.310; or 1201
1791	1791		2. Optional as provided in ss. 738.306, 738.307(2), and 1202
1792	1792		738.308(2), to the extent that the fiduciary elects to adopt 1203
1793	1793		those rules. 1204
1794	1794		(3) A unitrust policy may do any of the following: 1205
1795	1795		(a) Provide methods and standards for: 1206
1796	1796		1. Determining the timing of the distributions; 1207
1797	1797		2. Making distributions in cash or in kind or partly in 1208
1798	1798		cash and partly in kind; or 1209
1799	1799		3. Correcting an underpayment or overpayment to a 1210
1800	1800		beneficiary based on the unitrust amount if there is an error in 1211
1801	1801		calculating the unitrust amount. 1212
1802	1802		(b) Specify sources and the order of sources, including 1213
1803	1803		categories of income for federal income tax purposes, from which 1214
1804	1804		distributions of a unitrust amount are paid. 1215
1805	1805		(c) Provide other standards and rules that the fiduciary 1216
1806	1806		determines serve the interests of the beneficiaries. 1217
1807	1807		Section 15. Section 738.306, Florida Statutes, is created 1218
1808	1808		to read: 1219
1809	1809		738.306 Unitrust rate. — 1220
1810	1810		(1) A unitrust rate must be at least 3 percent and not 1221
1811	1811		more than 5 percent. Within those limits, the unitrust rate may 1222
1812	1812		be: 1223
1813	1813		(a) A fixed unitrust rate; or 1224
1814	1814		(b)1. A unitrust rate that is determined for each period 1225
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1823	1823		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1824	1824
1825	1825
1826	1826
1827	1827		using: 1226
1828	1828		a. A market index or other published data; or 1227
1829	1829		b. A mathematical blend of market indices or other 1228
1830	1830		published data over a stated number of preceding periods. 1229
1831	1831		2. If the rate calculated under this paragraph would be 1230
1832	1832		less than 3, the rate is 3; and if the rate calculated would be 1231
1833	1833		more than 5, the rate is 5. 1232
1834	1834		(2) Within the limits of subsection (1), a unitrust policy 1233
1835	1835		may provide for any of the following: 1234
1836	1836		(a) A limit on how much the unitrust rate determined under 1235
1837	1837		paragraph (1)(b) may increase over the unitrust rate for the 1236
1838	1838		preceding period or a mathematical blend of unitrust rates over 1237
1839	1839		a stated number of preceding periods. 1238
1840	1840		(b) A limit on how much the unitrust rate determine d under 1239
1841	1841		paragraph (1)(b) may decrease below the unitrust rate for the 1240
1842	1842		preceding period or a mathematical blend of unitrust rates over 1241
1843	1843		a stated number of preceding periods. 1242
1844	1844		(c) A mathematical blend of any of the unitrust rates 1243
1845	1845		determined under paragraph ( 1)(b) and paragraphs (a) and (b). 1244
1846	1846		(3) If the fiduciary is not an independent person, the 1245
1847	1847		percentage used to calculate the unitrust amount is the rate 1246
1848	1848		determined under s. 7520(a)(2) of the Internal Revenue Code in 1247
1849	1849		effect for the month the conversion under this section becomes 1248
1850	1850		effective and for each January thereafter; however, if the rate 1249
1851	1851		determined under s. 7520(a)(2) of the Internal Revenue Code 1250
1852		-	~~ENROLLED~~
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1860	1860		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1861	1861
1862	1862
1863	1863
1864	1864		exceeds 5 percent, the unitrust rate is 5 percent, and if the 1251
1865	1865		rate determined under s. 7520(a)(2) of the Inter nal Revenue Code 1252
1866	1866		is less than 3 percent, the unitrust rate is 3 percent. 1253
1867	1867		Section 16. Section 738.307, Florida Statutes, is created 1254
1868	1868		to read: 1255
1869	1869		738.307 Applicable value. — 1256
1870	1870		(1) A unitrust policy must provide the method for 1257
1871	1871		determining the fair market val ue of an asset for the purpose of 1258
1872	1872		determining the unitrust amount, including all of the following: 1259
1873	1873		(a) The frequency of valuing the asset, which need not 1260
1874	1874		require a valuation in every period. 1261
1875	1875		(b) The date for valuing the asset in each period in which 1262
1876	1876		the asset is valued. 1263
1877	1877		(2) Except as otherwise provided in s. 738.309, a unitrust 1264
1878	1878		policy may provide methods for determining the amount of the net 1265
1879	1879		fair market value of the trust to take into account in 1266
1880	1880		determining the applicable value, including any of the 1267
1881	1881		following: 1268
1882	1882		(a) Obtaining an appraisal of an asset for which fair 1269
1883	1883		market value is not readily available. 1270
1884	1884		(b) Excluding specific assets or groups or types of assets 1271
1885	1885		in addition to those described in subsection (3). 1272
1886	1886		(c) Making other exceptions or modifications of the 1273
1887	1887		treatment of specific assets or groups or types of assets. 1274
1888	1888		(d) Including identification and treatment of cash or 1275
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1897	1897		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1898	1898
1899	1899
1900	1900
1901	1901		property held for distribution. 1276
1902	1902		(e) Using an average of fair market values over a stated 1277
1903	1903		number of preceding periods, not to exceed 3 calendar years. 1278
1904	1904		(f) Determining the reasonable known liabilities of the 1279
1905	1905		trust, including treatment of liabilities to conform with the 1280
1906	1906		treatment of assets under paragraphs (a) -(e). 1281
1907	1907		(3) The following property may not be included in 1282
1908	1908		determining the value of the trust: 1283
1909	1909		(a) Any residential property or any tangible personal 1284
1910	1910		property that, as of the first business day of the current 1285
1911	1911		valuation year, one or more current beneficiaries of the trust 1286
1912	1912		have or have had the right to occupy or have or have had the 1287
1913	1913		right to possess or control, other than in his or her capacity 1288
1914	1914		as trustee of the trust. Instead, the right of occupancy or the 1289
1915	1915		right to possession and control is the unitrust amount with 1290
1916	1916		respect to such property; however, the unitrust amount m ust be 1291
1917	1917		adjusted to take into account partial distributions from or 1292
1918	1918		receipt into the trust of such property during the valuation 1293
1919	1919		year; 1294
1920	1920		(b) Any asset specifically given to a beneficiary and the 1295
1921	1921		return on investment on such property, which return on 1296
1922	1922		investment must be distributable to the beneficiary; and 1297
1923	1923		(c) Any asset while held in an estate. 1298
1924	1924		Section 17. Section 738.308, Florida Statutes, is created 1299
1925	1925		to read: 1300
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1933	1933		Page 53 of 113
1934	1934		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1935	1935
1936	1936
1937	1937
1938	1938		738.308 Period.— 1301
1939	1939		(1) A unitrust policy must provide the period used under 1302
1940	1940		ss. 738.306 and 738.307. The period must be the calendar year. 1303
1941	1941		(2) A unitrust policy may provide standards for: 1304
1942	1942		(a) Using fewer preceding periods under s. 738.306(1)(b)1. 1305
1943	1943		or (2)(a) or (b) if: 1306
1944	1944		1. The trust was not in existence in a preceding period; 1307
1945	1945		or 1308
1946	1946		2. Market indices or other published data are not 1309
1947	1947		available for a preceding period; 1310
1948	1948		(b) Using fewer preceding periods under 738.307(2)(e) if: 1311
1949	1949		1. The trust was not in existence in a preceding period; 1312
1950	1950		or 1313
1951	1951		2. Fair market values are not available for a preceding 1314
1952	1952		period; and 1315
1953	1953		(c) Prorating a unitrust amount on a daily basis for a 1316
1954	1954		part of a period in which the trust or the administration of the 1317
1955	1955		trust as a unitrust or the interest of any beneficiary commences 1318
1956	1956		or terminates. 1319
1957	1957		Section 18. Section 738.309, Florida S tatutes, is created 1320
1958	1958		to read: 1321
1959	1959		738.309 Express unitrust. — 1322
1960	1960		(1) This section applies to a trust that, by its governing 1323
1961	1961		instrument, requires or allows income or net income to be 1324
1962	1962		calculated as a unitrust amount. 1325
1963		-	~~ENROLLED~~
1964		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
1965		-
1966		-
1967		-
1968		-	CODING: Words stricken are deletions; words underlined are additions.
1969		-	hb1093-~~03-er~~
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	1964	+	CS/HB 1093, Engrossed 1 2024
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1970	1970		Page 54 of 113
1971	1971		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
1972	1972
1973	1973
1974	1974
1975	1975		(2) The trustee of an express unitrust may d etermine the 1326
1976	1976		unitrust amount by reference to the net fair market value of the 1327
1977	1977		unitrust's assets in 1 or more years. 1328
1978	1978		(3) Distribution of a unitrust amount is considered a 1329
1979	1979		distribution of all of the net income of an express unitrust and 1330
1980	1980		is considered to be an income interest. 1331
1981	1981		(4) The unitrust amount is considered to be a reasonable 1332
1982	1982		apportionment of the total return of an express unitrust. 1333
1983	1983		(5) An express unitrust that provides or allows a 1334
1984	1984		distribution based on a unitrust rate in excess of 5 percent per 1335
1985	1985		year of the net fair market value of the unitrust assets is 1336
1986	1986		considered a distribution of all of the income of the unitrust 1337
1987	1987		and a distribution of principal of the unitrust to the extent 1338
1988	1988		that the distribution exceeds 5 percent per year. 1339
1989	1989		(6) An express unitr ust may provide a mechanism for 1340
1990	1990		changing the unitrust rate, similar to the mechanism provided 1341
1991	1991		under s. 738.306, based upon the factors noted in that section, 1342
1992	1992		and may provide for a conversion from a unitrust to an income 1343
1993	1993		trust or a reconversion of an income trust to a unitrust under 1344
1994	1994		s. 738.303. 1345
1995	1995		(7) If an express unitrust does not specifically or by 1346
1996	1996		reference to s. 738.306 prohibit a power to change the unitrust 1347
1997	1997		rate or to convert to an income trust under s. 738.303, the 1348
1998	1998		trustee must have such power. 1349
1999	1999		(8) The governing instrument of an express unitrust may 1350
2000		-	~~ENROLLED~~
2001		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
2002		-
2003		-
2004		-
2005		-	CODING: Words stricken are deletions; words underlined are additions.
2006		-	hb1093-~~03-er~~
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2007	2007		Page 55 of 113
2008	2008		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2009	2009
2010	2010
2011	2011
2012	2012		grant the trustee discretion to adopt a consistent practice of 1351
2013	2013		treating capital gains as part of the unitrust amount to the 1352
2014	2014		extent that the unitrust amount exceeds the income determined as 1353
2015	2015		if the trust were not an express unitrust, or the governing 1354
2016	2016		instrument may specify the ordering of classes of income. 1355
2017	2017		(9) Unless the terms of the express unitrust specifically 1356
2018	2018		provide otherwise as provided in subsection (8), the 1357
2019	2019		distribution of a unitrust amount is considered a distribution 1358
2020	2020		made from the following sources, which are listed in order of 1359
2021	2021		priority: 1360
2022	2022		(a) Net accounting income determined under this chapter as 1361
2023	2023		if the trust were not a unitrust; 1362
2024	2024		(b) Ordinary income not allocable to net accounting 1363
2025	2025		income; 1364
2026	2026		(c) Net realized short -term capital gains; 1365
2027	2027		(d) Net realized long -term capital gains; and 1366
2028	2028		(e) The principal of the trust. 1367
2029	2029		(10) The governing instrument of an express unitrust may 1368
2030	2030		provide that the trustee may exclude assets used by the 1369
2031	2031		unitrust's beneficiary, including, but not limited to, a 1370
2032	2032		residence property or tangible personal property, from the net 1371
2033	2033		fair market value of the unitrust's assets for the purposes of 1372
2034	2034		computing the unitrust amount. The use of these assets may be 1373
2035	2035		considered equivalent to i ncome or to the unitrust amount. 1374
2036	2036		Section 19. Section 738.310, Florida Statutes, is created 1375
2037		-	~~ENROLLED~~
2038		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2040		-
2041		-
2042		-	CODING: Words stricken are deletions; words underlined are additions.
2043		-	hb1093-~~03-er~~
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2044	2044		Page 56 of 113
2045	2045		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2046	2046
2047	2047
2048	2048
2049	2049		to read: 1376
2050	2050		738.310 Other rules. —Following the conversion of an income 1377
2051	2051		trust to a unitrust, the trustee shall consider the unitrust 1378
2052	2052		amount as paid from the follow ing sources, which are listed in 1379
2053	2053		order of priority: 1380
2054	2054		(1) Net accounting income determined under this chapter as 1381
2055	2055		if the trust were not a unitrust; 1382
2056	2056		(2) Ordinary income not allocable to net accounting 1383
2057	2057		income; 1384
2058	2058		(3) Net realized short -term capital gains; 1385
2059	2059		(4) Net realized long -term capital gains; and 1386
2060	2060		(5) The principal of the trust. 1387
2061	2061		Section 20. Section 738.401, Florida Statutes, is amended 1388
2062	2062		to read: 1389
2063	2063		738.401 Character of receipts from entity.— 1390
2064	2064		(1) For purposes of this section, the term : 1391
2065	2065		(a) "Capital distribution" means an entity distribution of 1392
2066	2066		money which is a: 1393
2067	2067		1. Return of capital; or 1394
2068	2068		2. Distribution in total or partial liquidation of the 1395
2069	2069		entity. 1396
2070	2070		(b) "Entity": 1397
2071	2071		1. Means a corporation, partnership, limited liability 1398
2072	2072		company, regulated invest ment company, real estate investment 1399
2073	2073		trust, common trust fund, or any other organization or 1400
2074		-	~~ENROLLED~~
2075		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
2076		-
2077		-
2078		-
2079		-	CODING: Words stricken are deletions; words underlined are additions.
2080		-	hb1093-~~03-er~~
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2081	2081		Page 57 of 113
2082	2082		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2083	2083
2084	2084
2085	2085
2086	2086		arrangement in which a fiduciary owns or holds has an interest, 1401
2087	2087		regardless of whether the entity is a taxpayer for federal 1402
2088	2088		income tax purposes; and 1403
2089	2089		2. Does not include: 1404
2090	2090		a. A trust or estate to which s. 738.402 applies; 1405
2091	2091		b. A business or other activity to which s. 738.403 1406
2092	2092		applies which is not conducted by an entity described in 1407
2093	2093		subparagraph 1.; 1408
2094	2094		c. An asset-backed security; or 1409
2095	2095		d. An instrument or arrangement to which s. 738.416 1410
2096	2096		applies other than a trust or estate to which s. 738.402 1411
2097	2097		applies, a business or activity to which s. 738.403 applies, or 1412
2098	2098		an asset-backed security to which s. 738.608 applies . 1413
2099	2099		(c) "Entity distribution" means a payment or transfer by 1414
2100	2100		an entity to a person in the person's capacity as an owner or 1415
2101	2101		holder of an interest in the entity. 1416
2102	2102		(d) "Lookback period" means the accounting period and the 1417
2103	2103		preceding two accounting periods or, if less, the number of 1418
2104	2104		accounting periods, or portion of accou nting periods, that the 1419
2105	2105		interest in the entity has been held by the fiduciary. 1420
2106	2106		(2) In this section, an attribute or action of an entity 1421
2107	2107		includes an attribute or action of any other entity in which the 1422
2108	2108		initial entity owns or holds an interest, including an interest 1423
2109	2109		owned or held indirectly through another entity. 1424
2110	2110		(3) Except as otherwise provided in paragraphs (4)(b), 1425
2111		-	~~ENROLLED~~
2112		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2114		-
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2118	2118		Page 58 of 113
2119	2119		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2120	2120
2121	2121
2122	2122
2123	2123		(c), and (d) this section, a fiduciary shall allocate to income : 1426
2124	2124		(a) Money received in an entity distribution; and 1427
2125	2125		(b) Tangible person al property of nominal value received 1428
2126	2126		from the money received from an entity. 1429
2127	2127		(4)(3) Except as otherwise provided in this section, A 1430
2128	2128		fiduciary shall allocate the following receipts from an entity 1431
2129	2129		to principal: 1432
2130	2130		(a) Property received in an entity distrib ution which is 1433
2131	2131		not: 1434
2132	2132		1. other than Money; or 1435
2133	2133		2. Tangible personal property of nominal value . 1436
2134	2134		(b) Money received in an entity one distribution or a 1437
2135	2135		series of related distributions in an exchange for part or all 1438
2136	2136		of the fiduciary's a trust's or estate's interest in the entity 1439
2137	2137		to the extent that the entity distribution reduces the 1440
2138	2138		fiduciary's interest in the entity relative to the interest of 1441
2139	2139		other persons that own or hold interests in the entity . 1442
2140	2140		(c) Money received in an entity distribution that is a 1443
2141	2141		capital distribution, to the extent not allocated to income 1444
2142	2142		total or partial liquidation of the entity . 1445
2143	2143		(d) Money received in an entity distribution from an 1446
2144	2144		entity that is a regulated investment company or a real estate 1447
2145	2145		investment trust if the money receiv ed represents short-term or 1448
2146	2146		long-term capital gain realized within the entity. 1449
2147	2147		(e) Money received from an entity listed on a public stock 1450
2148		-	~~ENROLLED~~
2149		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2151		-
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2154		-	hb1093-~~03-er~~
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2156	2156		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2157	2157
2158	2158
2159	2159
2160	2160		exchange during any year of the trust or estate which exceeds 10 1451
2161	2161		percent of the fair market value of the trust's or estate's 1452
2162	2162		interest in the entity on the first day of that year. The amount 1453
2163	2163		to be allocated to principal must be reduced to the extent that 1454
2164	2164		the cumulative distributions from the entity to the trust or 1455
2165	2165		estate allocated to income do not exceed a cumulative ann ual 1456
2166	2166		return of 3 percent of the fair market value of the interest in 1457
2167	2167		the entity at the beginning of each year or portion of a year 1458
2168	2168		for the number of years or portion of years in the period that 1459
2169	2169		the interest in the entity has been held by the trust or estate . 1460
2170	2170		If a trustee has exercised a power to adjust under s. 738.104 1461
2171	2171		during any period the interest in the entity has been held by 1462
2172	2172		the trust, the trustee, in determining the total income 1463
2173	2173		distributions from that entity, must take into account the 1464
2174	2174		extent to which the exercise of that power resulted in income to 1465
2175	2175		the trust from that entity for that period. If the income of the 1466
2176	2176		trust for any period has been computed under s. 738.1041, the 1467
2177	2177		trustee, in determining the total income distributions from that 1468
2178	2178		entity for that period, must take into account the portion of 1469
2179	2179		the unitrust amount paid as a result of the ownership of the 1470
2180	2180		trust's interest in the entity for that period. 1471
2181	2181		(5)(4) If a fiduciary elects, or continues an election 1472
2182	2182		made by its predecessor, to reinvest divid ends in shares of 1473
2183	2183		stock of a distributing corporation or fund, whether evidenced 1474
2184	2184		by new certificates or entries on the books of the distributing 1475
2185		-	~~ENROLLED~~
2186		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2188		-
2189		-
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2191		-	hb1093-~~03-er~~
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2193	2193		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2194	2194
2195	2195
2196	2196
2197	2197		entity, the new shares retain their character as income. 1476
2198	2198		(6)(5) Except as otherwise provided in subsections ( 10) 1477
2199	2199		and (11), money received in an entity distribution is a capital 1478
2200	2200		distribution Money is received in partial liquidation : 1479
2201	2201		(a) To the extent that the entity, at or near the time of 1480
2202	2202		the entity a distribution, indicates that such money is a 1481
2203	2203		capital distribution in partial liquidation ; or 1482
2204	2204		(b) To the extent that the total amount of money and 1483
2205	2205		property received by the fiduciary in the entity in a 1484
2206	2206		distribution or a series of related entity distributions is or 1485
2207	2207		will be greater than from an entity that is not listed on a 1486
2208	2208		public stock exchange exceeds 20 percent of the fiduciary's 1487
2209	2209		trust's or estate's pro rata share of the entity's gross assets, 1488
2210	2210		as shown by the entity's year -end financial statements 1489
2211	2211		immediately preceding the initial receipt. 1490
2212	2212		1491
2213	2213		This subsection does not apply to an entity to which subsection 1492
2214	2214		(7) applies. 1493
2215	2215		(7)(6) In the case of a capital distribution, the amount 1494
2216	2216		received in an entity distribution allocated to principal must 1495
2217	2217		be reduced to the extent that the cumulative distributions from 1496
2218	2218		the entity to the fiduciary Money may not be taken into account 1497
2219	2219		in determining any excess under paragraph (5)(b), to the extent 1498
2220	2220		that the cumulative distributions from the entity to the trust 1499
2221	2221		or the estate allocated to income do not exceed the greater of: 1500
2222		-	~~ENROLLED~~
2223		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2226		-
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2230	2230		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2231	2231
2232	2232
2233	2233
2234	2234		(a) A cumulative annual return of 3 percent of the 1501
2235	2235		entity's carrying value computed at the beginning of each 1502
2236	2236		accounting period, or portion of an accounting period, during 1503
2237	2237		the lookback period for the number of years or portion of years 1504
2238	2238		that the entity was held by the f iduciary. If a fiduciary 1505
2239	2239		trustee has exercised a power to adjust under s. 738.203 during 1506
2240	2240		the lookback period, the fiduciary s. 738.104 during any period 1507
2241	2241		the interest in the entity has been held by the trust, the 1508
2242	2242		trustee, in determining the total income dis tributions from that 1509
2243	2243		entity, must take into account the extent to which the exercise 1510
2244	2244		of the power resulted in income to the fiduciary trust from that 1511
2245	2245		entity for that period. If the income of a fiduciary during the 1512
2246	2246		lookback trust for any period has been computed under ss. 1513
2247	2247		738.301-738.310, the fiduciary pursuant to s. 738.1041, the 1514
2248	2248		trustee, in determining the total income distributions from the 1515
2249	2249		entity for that period, must take into account the portion of 1516
2250	2250		the unitrust amount paid as a result of the ownership of the 1517
2251	2251		trust's interest in the entity for that period; or 1518
2252	2252		(b) In If the case of an entity is treated as a 1519
2253	2253		partnership, subchapter S corporation, or a disregarded entity 1520
2254	2254		under pursuant to the Internal Revenue Code of 1986, as amended, 1521
2255	2255		the amount of income tax attributable to the fiduciary's trust's 1522
2256	2256		or estate's ownership share of the entity, based on its pro rata 1523
2257	2257		share of the taxable income of the entity that distributes the 1524
2258	2258		money, during the lookback period for the number of years or 1525
2259		-	~~ENROLLED~~
2260		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2262		-
2263		-
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2265		-	hb1093-~~03-er~~
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2267	2267		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2268	2268
2269	2269
2270	2270
2271	2271		portion of years that the interest in the entity was held by the 1526
2272	2272		fiduciary, calculated as if all of the that tax was incurred by 1527
2273	2273		the fiduciary. 1528
2274	2274		(8) If a fiduciary receives additional information about 1529
2275	2275		the application of this section to an entity distribution before 1530
2276	2276		the fiduciary has paid part of the entity distribution to a 1531
2277	2277		beneficiary, the fiduciary may consider the additional 1532
2278	2278		information before making the payment to the beneficiary and may 1533
2279	2279		change a decision to make the payment to the beneficiary. 1534
2280	2280		(9) If a fiduciary receives additional information about 1535
2281	2281		the application of this section to an entity distribution after 1536
2282	2282		the fiduciary has paid part of the entity distribution to a 1537
2283	2283		beneficiary, the fiduciary is not required to change or recover 1538
2284	2284		the payment to the beneficiary but may consider that information 1539
2285	2285		in determining whether to exercise its other powers, including 1540
2286	2286		but not limited to the power to adjust under s. 738.203. 1541
2287	2287		(10)(7) The following applies to money or property 1542
2288	2288		received by a private trustee as a distribution from an 1543
2289	2289		investment entity described in this subsection: 1544
2290	2290		(a) The trustee shall first treat as income of the trust 1545
2291	2291		all of the money or property received from the investment entity 1546
2292	2292		in the current accounting period year which would be considered 1547
2293	2293		income under this chapter if the trustee had directly held the 1548
2294	2294		trust's pro rata share of the assets of the investment entity. 1549
2295	2295		For this purpose, all distributions received in the current 1550
2296		-	~~ENROLLED~~
2297		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2299		-
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2304	2304		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2305	2305
2306	2306
2307	2307
2308	2308		accounting period year must be aggregated. 1551
2309	2309		(b) The trustee shall next treat as i ncome of the trust 1552
2310	2310		any additional money or property received in the current 1553
2311	2311		accounting period year which would have been considered income 1554
2312	2312		in the prior 2 accounting periods years under paragraph (a) if 1555
2313	2313		additional money or property had been received from th e 1556
2314	2314		investment entity in any of those prior 2 accounting periods 1557
2315	2315		years. The amount to be treated as income must shall be reduced 1558
2316	2316		by any distributions of money or property made by the investment 1559
2317	2317		entity to the trust during the current and the prior 2 1560
2318	2318		accounting periods years which were treated as income under this 1561
2319	2319		paragraph. 1562
2320	2320		(c) The remainder of the distribution, if any, is treated 1563
2321	2321		as principal. 1564
2322	2322		(d) As used in this subsection, the term: 1565
2323	2323		1. "Investment entity" means an entity, other than a 1566
2324	2324		business activity conducted by the trustee described in s. 1567
2325	2325		738.403 or an entity that is listed on a public stock exchange, 1568
2326	2326		which is treated as a partnership, subchapter S corporation, or 1569
2327	2327		disregarded entity under pursuant to the Internal Revenue Code 1570
2328	2328		of 1986, as amended, and which normally derives 50 percent or 1571
2329	2329		more of its annual cumulative net income from interest, 1572
2330	2330		dividends, annuities, royalties, rental activity, or other 1573
2331	2331		passive investments, including income from the sale or exchange 1574
2332	2332		of such passive investments. 1575
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2341	2341		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2342	2342
2343	2343
2344	2344
2345	2345		2. "Private trustee" means a trustee who is a natural 1576
2346	2346		person, but is not an independent person as set forth in s. 1577
2347	2347		738.102 only if the trustee is unable to use the power to adjust 1578
2348	2348		between income and principal with respect to receipts from 1579
2349	2349		entities described in this subsection pursuant to s. 738.104 . A 1580
2350	2350		bank, trust company, or other commercial trustee is not 1581
2351	2351		considered a private trustee. 1582
2352	2352		(11) A fiduciary shall allocate to principal any money and 1583
2353	2353		property the fiduciary receives in a distribution or series of 1584
2354	2354		related distributions from a public entity which are greater 1585
2355	2355		than 10 percent of the fair market value of the fiduciary's 1586
2356	2356		interest in the public entity on the first day of the accounting 1587
2357	2357		period. The amount to be allocated to principal must be reduced 1588
2358	2358		to the extent that the cumulative distributions from the entity 1589
2359	2359		to the fiduciary allocated to income do not exceed a cumulative 1590
2360	2360		annual return of 3 percent of the fair market value of the 1591
2361	2361		interest in the entity at the beginning of each accounting 1592
2362	2362		period, or portion of an accounting period, during the lookback 1593
2363	2363		period. If a fiduciary has exercised a power to adjust under s. 1594
2364	2364		738.203 during the lookback period, the fiduciary, in 1595
2365	2365		determining the total income distributions from that entity, 1596
2366	2366		must take into account the e xtent to which the exercise of that 1597
2367	2367		power resulted in income to the fiduciary from that entity for 1598
2368	2368		that period. If the income of the fiduciary during the lookback 1599
2369	2369		period has been computed under ss. 738.301 -738.310, the 1600
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2378	2378		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2379	2379
2380	2380
2381	2381
2382	2382		fiduciary, in determining the total i ncome distribution from 1601
2383	2383		that entity for that period, must take into account the portion 1602
2384	2384		of the unitrust amount paid as a result of the ownership of the 1603
2385	2385		trust's interest in the entity for that period. As used in this 1604
2386	2386		subsection, the term "public entity" mea ns an entity listed on a 1605
2387	2387		public stock exchange. 1606
2388	2388		(12)(8) This section must shall be applied before ss. 1607
2389	2389		738.506 and 738.507 ss. 738.705 and 738.706 and does not modify 1608
2390	2390		or change any of the provisions of those sections. 1609
2391	2391		Section 21. Section 738.402, Flor ida Statutes, is amended 1610
2392	2392		to read: 1611
2393	2393		738.402 Distribution from trust or estate. —A fiduciary 1612
2394	2394		shall allocate to income an amount received as a distribution of 1613
2395	2395		income, including a unitrust distribution under ss. 738.301 -1614
2396	2396		738.310, from a trust or an estate in wh ich the fiduciary trust 1615
2397	2397		has an interest, other than an interest a purchased in a trust 1616
2398	2398		that is an investment entity, and shall interest and allocate to 1617
2399	2399		principal an amount received as a distribution of principal from 1618
2400	2400		the such a trust or estate. If a fiduciary purchases , or 1619
2401	2401		receives from a settlor, an interest in a trust that is an 1620
2402	2402		investment entity, or a decedent or donor transfers an interest 1621
2403	2403		in such a trust to a fiduciary, s. 738.401, s. 738.415, or s. 1622
2404	2404		738.416 or s. 738.608 applies to a receipt from the trust. 1623
2405	2405		Section 22. Section 738.403, Florida Statutes, is amended 1624
2406	2406		to read: 1625
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2415	2415		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2416	2416
2417	2417
2418	2418
2419	2419		738.403 Business and other activity activities conducted 1626
2420	2420		by fiduciary.— 1627
2421	2421		(1) This section applies to If a fiduciary who conducts a 1628
2422	2422		business or other activity conducted by a fiduciary if the 1629
2423	2423		fiduciary determines that it is in the best interests of 1630
2424	2424		interest of all the beneficiaries to account separately for the 1631
2425	2425		business or other activity instead of: 1632
2426	2426		(a) Accounting for the business or other activity as part 1633
2427	2427		of the fiduciary's trust's or estate's general accounting 1634
2428	2428		records; or 1635
2429	2429		(b) Conducting the business or other activity through an 1636
2430	2430		entity described in s. 738.401(1)(b). , the 1637
2431	2431		(2) A fiduciary may account separately under this section 1638
2432	2432		maintain separate accounting records for the transactions of a 1639
2433	2433		the business or another other activity, regardless of whether or 1640
2434	2434		not the assets of the such business or other activity are 1641
2435	2435		segregated from other trust or estate assets held by the 1642
2436	2436		fiduciary. 1643
2437	2437		(3)(2) A fiduciary who accounts separately under this 1644
2438	2438		section for a business or other activity : 1645
2439	2439		(a) May determine: 1646
2440	2440		1. The extent to which the net cash receipts of the 1647
2441	2441		business or other activity must be retained for : 1648
2442	2442		a. Working capital; 1649
2443	2443		b. The acquisition or replacement of fixed assets; and 1650
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2452	2452		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2453	2453
2454	2454
2455	2455
2456	2456		c. Other reasonably foreseeable needs of the business or 1651
2457	2457		other activity; and working capital, the acquisition or 1652
2458	2458		replacement of fixed assets, and other reasonably foreseeable 1653
2459	2459		needs of the business or activity, and 1654
2460	2460		2. The extent to which the remaining net cash receipts are 1655
2461	2461		accounted for as principal or income in the fiduciary's trust's 1656
2462	2462		or estate's general accounting records for the trust. 1657
2463	2463		(b) May make a determination under paragraph (a) 1658
2464	2464		separately and differently from t he fiduciary's decisions 1659
2465	2465		concerning distributions of income or principal; and 1660
2466	2466		(c) Shall account for the net amount received from the 1661
2467	2467		sale of an asset of If a fiduciary sells assets of the business 1662
2468	2468		or other activity, other than a sale in the ordinary cour se of 1663
2469	2469		the business or other activity, the fiduciary must account for 1664
2470	2470		the net amount received as principal in the fiduciary's trust's 1665
2471	2471		or estate's general accounting records for the trust, to the 1666
2472	2472		extent the fiduciary determines that the net amount received is 1667
2473	2473		no longer required in the conduct of the business or other 1668
2474	2474		activity. 1669
2475	2475		(4)(3) Activities for which a fiduciary may account 1670
2476	2476		separately under this section maintain separate accounting 1671
2477	2477		records include: 1672
2478	2478		(a) Retail, manufacturing, service, and other traditi onal 1673
2479	2479		business activities. 1674
2480	2480		(b) Farming. 1675
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2489	2489		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2490	2490
2491	2491
2492	2492
2493	2493		(c) Raising and selling livestock and other animals. 1676
2494	2494		(d) Managing Management of rental properties. 1677
2495	2495		(e) Extracting Extraction of minerals and other natural 1678
2496	2496		resources. 1679
2497	2497		(f) Growing and cutting timber operations. 1680
2498	2498		(g) An activity Activities to which s. 738.414, s. 1681
2499	2499		738.415, or s. 738.416 s. 738.607 applies. 1682
2500	2500		(h) Any other business conducted by the fiduciary. 1683
2501	2501		Section 23. Section 738.404, Florida Statutes, is created 1684
2502	2502		to read: 1685
2503	2503		738.404 Principal receipts. —A fiduciary shall allocate to 1686
2504	2504		principal: 1687
2505	2505		(1) To the extent not allocated to income under this 1688
2506	2506		chapter, an asset received from any of the following: 1689
2507	2507		(a) An individual during the individual's lifetime. 1690
2508	2508		(b) An estate. 1691
2509	2509		(c) A trust on termination of an in come interest. 1692
2510	2510		(d) A payor under a contract naming the fiduciary as 1693
2511	2511		beneficiary. 1694
2512	2512		(2) Except as otherwise provided in ss. 738.401 -738.416, 1695
2513	2513		money or other property received from the sale, exchange, 1696
2514	2514		liquidation, or change in the form of a principal asset. 1697
2515	2515		(3) An amount recovered from a third party to reimburse 1698
2516	2516		the fiduciary because of a disbursement described in s. 1699
2517	2517		738.502(1) or for another reason to the extent not based on the 1700
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2526	2526		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2527	2527
2528	2528
2529	2529
2530	2530		loss of income. 1701
2531	2531		(4) Proceeds of property taken by eminent domain except 1702
2532	2532		that proceeds awarded for loss of income in an accounting period 1703
2533	2533		are income if a current income beneficiary had a mandatory 1704
2534	2534		income interest during the period. 1705
2535	2535		(5) Net income received in an accounting period during 1706
2536	2536		which there is no beneficiary to which a fi duciary may or must 1707
2537	2537		distribute income. 1708
2538	2538		(6) Other receipts as provided in ss. 738.408 -738.416. 1709
2539	2539		Section 24. Section 738.405, Florida Statutes, is created 1710
2540	2540		to read: 1711
2541	2541		738.405 Rental property. —To the extent that a fiduciary 1712
2542	2542		does not account for the manage ment of rental property as a 1713
2543	2543		business under s. 738.403, the fiduciary shall allocate to 1714
2544	2544		income an amount received as rent of real or personal property, 1715
2545	2545		including an amount received for cancellation or renewal of a 1716
2546	2546		lease. An amount received as a refundable deposit, including a 1717
2547	2547		security deposit or a deposit that is to be applied as rent for 1718
2548	2548		future periods: 1719
2549	2549		(1) Must be added to principal and held subject to the 1720
2550	2550		terms of the lease, except as otherwise provided by law other 1721
2551	2551		than this chapter; and 1722
2552	2552		(2) Is not allocated to income or available for 1723
2553	2553		distribution to a beneficiary until the fiduciary's contractual 1724
2554	2554		obligations have been satisfied with respect to that amount. 1725
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2563	2563		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2564	2564
2565	2565
2566	2566
2567	2567		Section 25. Section 738.406, Florida Statutes, is created 1726
2568	2568		to read: 1727
2569	2569		738.406 Receipt on ob ligation to be paid in money. — 1728
2570	2570		(1) This section does not apply to an obligation to which 1729
2571	2571		s. 738.409, s. 738.410, s. 738.411, s. 738.412, s. 738.414, s. 1730
2572	2572		738.415, or s. 738.416 applies. 1731
2573	2573		(2) A fiduciary shall allocate to income, without 1732
2574	2574		provision for amortization of premium, an amount received as 1733
2575	2575		interest on an obligation to pay money to the fiduciary, 1734
2576	2576		including an amount received as consideration for prepaying 1735
2577	2577		principal. 1736
2578	2578		(3) A fiduciary shall allocate to principal an amount 1737
2579	2579		received from the sale, redem ption, or other disposition of an 1738
2580	2580		obligation to pay money to the fiduciary. 1739
2581	2581		(4) A fiduciary shall allocate to income the increment in 1740
2582	2582		value of a bond or other obligation for the payment of money 1741
2583	2583		bearing no stated interest but payable or redeemable, at 1742
2584	2584		maturity or another future time, in an amount that exceeds the 1743
2585	2585		amount in consideration of which it was issued. If the increment 1744
2586	2586		in value accrues and becomes payable pursuant to a fixed 1745
2587	2587		schedule of appreciation, it may be distributed to the 1746
2588	2588		beneficiary who was the income beneficiary at the time of 1747
2589	2589		increment from the first principal cash available or, if none is 1748
2590	2590		available, when the increment is realized by sale, redemption, 1749
2591	2591		or other disposition. If unrealized increment is distributed as 1750
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2600	2600		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2601	2601
2602	2602
2603	2603
2604	2604		income but out of princi pal, the principal must be reimbursed 1751
2605	2605		for the increment when realized. If, in the reasonable judgment 1752
2606	2606		of the fiduciary, exercised in good faith, the ultimate payment 1753
2607	2607		of the bond principal is in doubt, the fiduciary may withhold 1754
2608	2608		the payment of incremental i nterest to the income beneficiary. 1755
2609	2609		Section 26. Section 738.407, Florida Statutes, is created 1756
2610	2610		to read: 1757
2611	2611		738.407 Insurance policy or contract. — 1758
2612	2612		(1) This section does not apply to a contract to which s. 1759
2613	2613		738.409 applies. 1760
2614	2614		(2) Except as otherwise provid ed in subsection (3), a 1761
2615	2615		fiduciary shall allocate to principal the proceeds of a life 1762
2616	2616		insurance policy or other contract received by the fiduciary as 1763
2617	2617		beneficiary, including a contract that insures against damage 1764
2618	2618		to, destruction of, or loss of title to an as set. The fiduciary 1765
2619	2619		shall allocate dividends on an insurance policy to income to the 1766
2620	2620		extent that premiums on the policy are paid from income and to 1767
2621	2621		principal to the extent premiums on the policy are paid from 1768
2622	2622		principal. 1769
2623	2623		(3) A fiduciary shall allocate to i ncome proceeds of a 1770
2624	2624		contract that insures the fiduciary against loss of: 1771
2625	2625		(a) Occupancy or other use by a current income 1772
2626	2626		beneficiary; 1773
2627	2627		(b) Income; or 1774
2628	2628		(c) Subject to s. 738.403, profits from a business. 1775
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2637	2637		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2638	2638
2639	2639
2640	2640
2641	2641		Section 27. Section 738.408, Florida Statutes, is created 1776
2642	2642		to read: 1777
2643	2643		738.408 Insubstantial allocation not required. — 1778
2644	2644		(1) If a fiduciary determines that an allocation between 1779
2645	2645		income and principal required by s. 738.409, s. 738.410, s. 1780
2646	2646		738.411, s. 738.412, or s. 738.415 is insubstantial, the 1781
2647	2647		fiduciary may allocate the entire amount to principal, unless s. 1782
2648	2648		738.203(5) applies to the allocation. 1783
2649	2649		(2) A fiduciary may presume an allocation is insubstantial 1784
2650	2650		under subsection (1) if: 1785
2651	2651		(a) The amount of the allocation would increase or 1786
2652	2652		decrease net income in an accounting period, as determined 1787
2653	2653		before the allocation, by less than 10 percent; and 1788
2654	2654		(b) The asset producing the receipt to be allocated has a 1789
2655	2655		carrying value less than 10 percent of the total carrying value 1790
2656	2656		of the assets owned or held by the fiduciary at the beginning of 1791
2657	2657		the accounting period. 1792
2658	2658		(3) The power to make a determination under subsection (1) 1793
2659	2659		may be: 1794
2660	2660		(a) Exercised by a cofiduciary in the manner described in 1795
2661	2661		s. 738.203(6); or 1796
2662	2662		(b) Released or delegated for a reason described in s. 1797
2663	2663		738.203(7) and in the manner described in s. 738.203(8). 1798
2664	2664		Section 28. Section 738.409, Florida Statutes, is created 1799
2665	2665		to read: 1800
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2674	2674		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2675	2675
2676	2676
2677	2677
2678	2678		738.409 Deferred compensation, annuity, or similar 1801
2679	2679		payment.— 1802
2680	2680		(1) As used in this section, the term: 1803
2681	2681		(a) "Internal income of the se parate fund" means the 1804
2682	2682		amount determined under subsection (2). 1805
2683	2683		(b) "Marital trust" means a trust: 1806
2684	2684		1. Of which the settlor's surviving spouse is the only 1807
2685	2685		current income beneficiary and is entitled to a distribution of 1808
2686	2686		all the current net income of the t rust; and 1809
2687	2687		2. That qualifies for a marital deduction with respect to 1810
2688	2688		the settlor's estate under the Internal Revenue Code or 1811
2689	2689		comparable law of any state because: 1812
2690	2690		a. An election to qualify for a marital deduction under s. 1813
2691	2691		2056(b)(7) of the Internal Reven ue Code has been made; 1814
2692	2692		b. The trust qualified for a marital deduction under s. 1815
2693	2693		2056(b)(5) of the Internal Revenue Code; or 1816
2694	2694		c. The trust otherwise qualifies for a marital deduction. 1817
2695	2695		(c) "Nonseparate fund" means an annuity, a deferred 1818
2696	2696		compensation plan, a pension plan, or other fund for which the 1819
2697	2697		value of the participant's or account owner's right to receive 1820
2698	2698		benefits can be determined only by the occurrence of a date or 1821
2699	2699		event as defined in the instrument governing the fund. 1822
2700	2700		(d) "Payment" means an amou nt a fiduciary may receive over 1823
2701	2701		a fixed number of years or during the life of one or more 1824
2702	2702		individuals because of services rendered or property transferred 1825
2703		-	~~ENROLLED~~
2704		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2711	2711		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2712	2712
2713	2713
2714	2714
2715	2715		to the payor in exchange for future amounts the fiduciary may 1826
2716	2716		receive. The term includes an amount re ceived in money or 1827
2717	2717		property from the payor's general assets or from a separate fund 1828
2718	2718		created by the payor. 1829
2719	2719		(e) "Percent calculated" means a percent equal to the rate 1830
2720	2720		determined under s. 7520 of the Internal Revenue Code in effect 1831
2721	2721		for the month preceding t he beginning of the accounting period; 1832
2722	2722		however, if the percent calculated exceeds 5 percent, it must be 1833
2723	2723		reduced to 5 percent, and if the percent calculated is less than 1834
2724	2724		3 percent, it must be increased to 3 percent. Notwithstanding 1835
2725	2725		the preceding sentence, a fiduciary who is an independent person 1836
2726	2726		as defined in s. 738.102 may set the percent calculated at a 1837
2727	2727		percentage no less than 3 percent and no greater than 5 percent. 1838
2728	2728		(f) "Separate fund" includes a private or commercial 1839
2729	2729		annuity, an individual retirement account, and a pension, 1840
2730	2730		profit-sharing, stock-bonus, stock ownership plan, or other 1841
2731	2731		deferred compensation fund holding assets exclusively for the 1842
2732	2732		benefit of a participant or account owner. 1843
2733	2733		(2) For each accounting period, the following rules apply 1844
2734	2734		to a separate fund: 1845
2735	2735		(a) The fiduciary may determine the internal income of the 1846
2736	2736		separate fund as if the separate fund were a trust subject to 1847
2737	2737		this chapter. 1848
2738	2738		(b) Alternatively, the fiduciary may deem the internal 1849
2739	2739		income of the separate fund to equal the percent calculated of 1850
2740		-	~~ENROLLED~~
2741		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2748	2748		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2749	2749
2750	2750
2751	2751
2752	2752		the value of the separate fund according to the most recent 1851
2753	2753		statement of value preceding the beginning of the accounting 1852
2754	2754		period. The fiduciary is not liable for good faith reliance upon 1853
2755	2755		any valuation supplied by the person or persons in posse ssion of 1854
2756	2756		the fund. If the fiduciary makes or terminates an election under 1855
2757	2757		this paragraph, the fiduciary must make such disclosure in a 1856
2758	2758		trust disclosure document that satisfies the requirements of s. 1857
2759	2759		736.1008(4)(c). 1858
2760	2760		(c) If the fiduciary cannot determine t he value of the 1859
2761	2761		separate fund under paragraph (b), the value of the separate 1860
2762	2762		fund is deemed to equal the present value of the expected future 1861
2763	2763		payments as determined under s. 7520 of the Internal Revenue 1862
2764	2764		Code for the month preceding the beginning of the acc ounting 1863
2765	2765		period for which the computation is made. 1864
2766	2766		(d) The fiduciary may elect the method of determining the 1865
2767	2767		income of the fund pursuant to this subsection and may change 1866
2768	2768		the method of determining income of the fund for any future 1867
2769	2769		accounting period. 1868
2770	2770		(3) A fiduciary shall allocate a payment received from a 1869
2771	2771		separate fund during an accounting period to income, to the 1870
2772	2772		extent of the internal income of the separate fund during the 1871
2773	2773		period, and allocate the balance to principal. 1872
2774	2774		(4) The fiduciary of a marital trust shall: 1873
2775	2775		(a) Withdraw from a separate fund the amount the current 1874
2776	2776		income beneficiary of the trust requests the fiduciary to 1875
2777		-	~~ENROLLED~~
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2785	2785		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2786	2786
2787	2787
2788	2788
2789	2789		withdraw, not greater than the amount by which the internal 1876
2790	2790		income of the separate fund during the accounting period exceeds 1877
2791	2791		the amount the fiduciary otherwise receives from the separate 1878
2792	2792		fund during the period. 1879
2793	2793		(b) Transfer from principal to income the amount the 1880
2794	2794		current income beneficiary requests the fiduciary to transfer, 1881
2795	2795		but not greater than the amount by which the internal income of 1882
2796	2796		the separate fund during the period exceeds the amount the 1883
2797	2797		fiduciary receives from the separate fund during the period 1884
2798	2798		after the application of paragraph (a). 1885
2799	2799		(c) Distribute to the current income beneficiary as 1886
2800	2800		income: 1887
2801	2801		1. The amount of the i nternal income of the separate fund 1888
2802	2802		received or withdrawn during the period; and 1889
2803	2803		2. The amount transferred from principal to income under 1890
2804	2804		paragraph (b). 1891
2805	2805		(5) For a trust, other than a marital trust, of which one 1892
2806	2806		or more current income beneficiaries are entitled to a 1893
2807	2807		distribution of all the current net income, the fiduciary shall 1894
2808	2808		transfer from principal to income the amount by which the 1895
2809	2809		internal income of the separate fund during the accounting 1896
2810	2810		period exceeds the amount the fiduciary receives from the 1897
2811	2811		separate fund during the period. 1898
2812	2812		(6) The fiduciary of a nonseparate fund shall calculate 1899
2813	2813		internal income of the fund as the percent calculated of the 1900
2814		-	~~ENROLLED~~
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2822	2822		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2823	2823
2824	2824
2825	2825
2826	2826		present value of the right to receive the remaining payments as 1901
2827	2827		determined under s. 7520(a)(2) of the Inter nal Revenue Code for 1902
2828	2828		the month preceding the beginning of the accounting period. 1903
2829	2829		(7) If a fiduciary owns a separate fund or a nonseparate 1904
2830	2830		fund before January 1, 2025, the fiduciary may determine 1905
2831	2831		internal income, allocate payments, and account for unwithd rawn 1906
2832	2832		internal income as provided in this section or in the manner 1907
2833	2833		used by the fiduciary before January 1, 2025. Such fiduciary is 1908
2834	2834		not required to consider subsection (5). If the fiduciary 1909
2835	2835		acquires a separate fund or a nonseparate fund on or after 1910
2836	2836		January 1, 2025, the fiduciary must calculate internal income, 1911
2837	2837		allocate payments, and account for unwithdrawn internal income 1912
2838	2838		as provided in this section. 1913
2839	2839		Section 29. Section 738.603, Florida Statutes, is 1914
2840	2840		transferred, renumbered as section 738.410, Florida Stat utes, 1915
2841	2841		and amended to read: 1916
2842	2842		738.410 738.603 Liquidating asset.— 1917
2843	2843		(1) As used in For purposes of this section, the term 1918
2844	2844		"liquidating asset" means an asset whose value the value of 1919
2845	2845		which will diminish or terminate because the asset is expected 1920
2846	2846		to produce receipts for a period of limited time duration. The 1921
2847	2847		term includes a leasehold, patent, copyright, royalty right, and 1922
2848	2848		right to receive payments during a period of for more than 1 1923
2849	2849		year under an arrangement that does not provide for the payment 1924
2850	2850		of interest on the unpaid balance. The term does not include a 1925
2851		-	~~ENROLLED~~
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2859	2859		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2860	2860
2861	2861
2862	2862
2863	2863		payment subject to s. 738.602, resources subject to s. 738.604, 1926
2864	2864		timber subject to s. 738.605, an activity subject to s. 738.607, 1927
2865	2865		an asset subject to s. 738.608, or any asset for which the 1928
2866	2866		fiduciary establishe s a reserve for depreciation under s. 1929
2867	2867		738.703. 1930
2868	2868		(2) This section does not apply to a receipt that is 1931
2869	2869		subject to s. 738.401, s. 738.409, s. 738.411, s. 738.412, s. 1932
2870	2870		738.414, s. 738.415, s. 738.416, or s. 738.503. 1933
2871	2871		(3) A fiduciary shall allocate to income a receipt 1934
2872	2872		produced by a liquidating asset to the extent that the receipt 1935
2873	2873		does not exceed 5 percent of the receipts from the carrying 1936
2874	2874		value of the asset at the beginning of the accounting period and 1937
2875	2875		allocate a liquidating asset and the balance to principal the 1938
2876	2876		balance of the receipt . 1939
2877	2877		(4) The amount Amounts allocated to principal shall reduce 1940
2878	2878		the carrying value of the liquidating asset, but not below zero. 1941
2879	2879		Amounts received in excess of the remaining carrying value must 1942
2880	2880		be allocated to principal. 1943
2881	2881		Section 30. Section 738.604, Florida Statutes, is 1944
2882	2882		transferred, renumbered as section 738.411, Florida Statutes, 1945
2883	2883		and amended to read: 1946
2884	2884		738.411 738.604 Minerals, water, and other natural 1947
2885	2885		resources.— 1948
2886	2886		(1) To the extent that If a fiduciary does not account for 1949
2887	2887		a receipt accounts for receipts from an interest in minerals , 1950
2888		-	~~ENROLLED~~
2889		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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2896	2896		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2897	2897
2898	2898
2899	2899
2900	2900		water, or other natural resources as a business under s. 738.403 1951
2901	2901		pursuant to this section , the fiduciary shall allocate the 1952
2902	2902		receipt such receipts as follows : 1953
2903	2903		(a) To income, to the extent receive d: 1954
2904	2904		1. If received As nominal delay rental or nominal annual 1955
2905	2905		rent on a lease; 1956
2906	2906		2. As a factor for interest or the equivalent of interest 1957
2907	2907		under an agreement creating a production payment; or 1958
2908	2908		3. On account of an interest in renewable water; , a 1959
2909	2909		receipt shall be allocated to income. 1960
2910	2910		(b) To principal, if received from a production payment, a 1961
2911	2911		receipt shall be allocated to income if and to the extent that 1962
2912	2912		subparagraph (a)2. does not apply; or the agreement creating the 1963
2913	2913		production payment provides a factor fo r interest or its 1964
2914	2914		equivalent. The balance shall be allocated to principal. 1965
2915	2915		(c) Between income and principal equitably, to the extent 1966
2916	2916		received: 1967
2917	2917		1. On account of an interest in nonrenewable water; 1968
2918	2918		2. If an amount received As a royalty, shut-in-well 1969
2919	2919		payment, take-or-pay payment, or bonus; or, or delay rental is 1970
2920	2920		more than nominal, 90 percent shall be allocated to principal 1971
2921	2921		and the balance to income. 1972
2922	2922		3.(d) If an amount is received From a working interest or 1973
2923	2923		any other interest not provided for in paragrap h (a) or, 1974
2924	2924		paragraph (b) or subparagraph 1. or subparagraph 2. , or 1975
2925		-	~~ENROLLED~~
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2933	2933		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2934	2934
2935	2935
2936	2936
2937	2937		paragraph (c), 90 percent of the net amount received shall be 1976
2938	2938		allocated to principal and the balance to income. 1977
2939	2939		(2) An amount received on account of an interest in water 1978
2940	2940		that is renewable shall be allocated to income. If the water is 1979
2941	2941		not renewable, 90 percent of the amount shall be allocated to 1980
2942	2942		principal and the balance to income. 1981
2943	2943		(3) This section chapter applies to an interest owned or 1982
2944	2944		held by a fiduciary regardless of whether or not a settlor 1983
2945	2945		decedent or donor was extracting minerals, water, or other 1984
2946	2946		natural resources before the fiduciary owned or held the 1985
2947	2947		interest became subject to the trust or estate . 1986
2948	2948		(3) An allocation of a receipt under paragraph (1)(c) is 1987
2949	2949		presumed to be equitable if the amount allocated to principal is 1988
2950	2950		equal to the amount allowed by the Internal Revenue Code as a 1989
2951	2951		deduction for depletion of the interest. 1990
2952	2952		(4) If a fiduciary trust or estate owns or holds an 1991
2953	2953		interest in minerals, water, or other natural resources before 1992
2954	2954		January 1, 2025 on January 1, 2003, the fiduciary may allocate 1993
2955	2955		receipts from the interest as provided in this section chapter 1994
2956	2956		or in the manner used by the fiduciary before January 1, 2025 1995
2957	2957		January 1, 2003. If the fiduciary trust or estate acquires an 1996
2958	2958		interest in minerals, water, or other natural resources on or 1997
2959	2959		after January 1, 2025 January 1, 2003, the fiduciary must shall 1998
2960	2960		allocate receipts from the interest as provided in this section 1999
2961	2961		chapter. 2000
2962		-	~~ENROLLED~~
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2970	2970		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
2971	2971
2972	2972
2973	2973
2974	2974		Section 31. Section 738.605, Florida Statutes, is 2001
2975	2975		transferred, renumbered as section 738.412, Florida Statutes, 2002
2976	2976		and amended to read: 2003
2977	2977		738.412 738.605 Timber.— 2004
2978	2978		(1) To the extent that If a fiduciary does not account 2005
2979	2979		accounts for receipts from the sale of timber and related 2006
2980	2980		products as a business under s. 738. 403 pursuant to this 2007
2981	2981		section, the fiduciary shall allocate the such net receipts as 2008
2982	2982		follows: 2009
2983	2983		(a) To income, to the extent that the amount of timber cut 2010
2984	2984		removed from the land does not exceed the rate of growth of the 2011
2985	2985		timber during the accounting periods i n which a beneficiary has 2012
2986	2986		a mandatory income interest ; 2013
2987	2987		(b) To principal, to the extent that the amount of timber 2014
2988	2988		cut removed from the land exceeds the rate of growth of the 2015
2989	2989		timber or the net receipts are from the sale of standing timber; 2016
2990	2990		(c) To or Between income and principal if the net receipts 2017
2991	2991		are from the lease of land used for growing and cutting timber 2018
2992	2992		timberland or from a contract to cut timber from land owned by a 2019
2993	2993		trust or estate by determining the amount of timber cut removed 2020
2994	2994		from the land under the lease or contract and applying the rules 2021
2995	2995		in paragraphs (a) and (b); or 2022
2996	2996		(d) To principal, to the extent that advance payments, 2023
2997	2997		bonuses, and other payments are not allocated under pursuant to 2024
2998	2998		paragraph (a), paragraph (b), or paragraph (c). 2025
2999		-	~~ENROLLED~~
3000		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3007	3007		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3008	3008
3009	3009
3010	3010
3011	3011		(2) In determining net receipts to be allocated under 2026
3012	3012		pursuant to subsection (1), a fiduciary shall deduct and 2027
3013	3013		transfer to principal a reasonable amount for depletion. 2028
3014	3014		(3) This section chapter applies to land owned or held by 2029
3015	3015		a fiduciary regardless of whether or not a settlor decedent or 2030
3016	3016		donor was cutting harvesting timber from the land property 2031
3017	3017		before the fiduciary owned or held the property became subject 2032
3018	3018		to the trust or estate . 2033
3019	3019		(4) If a fiduciary trust or estate owns or holds an 2034
3020	3020		interest in land used for growing and cutting timber before 2035
3021	3021		January 1, 2025 timberland on January 1, 2003 , the fiduciary may 2036
3022	3022		allocate net receipts from the sale of timber and related 2037
3023	3023		products as provided in this section chapter or in the manner 2038
3024	3024		used by the fiduciary before January 1, 2025 January 1, 2003. If 2039
3025	3025		the fiduciary trust or estate acquires an interest in land used 2040
3026	3026		for growing and cutting timber on or after January 1, 2025 2041
3027	3027		timberland after January 1, 2003 , the fiduciary must shall 2042
3028	3028		allocate net receipts from the sale of timber and related 2043
3029	3029		products as provided in this section chapter. 2044
3030	3030		Section 32. Section 738.606, Florida Statutes, is 2045
3031	3031		transferred, renumbered as section 738.413, Florida Statutes, 2046
3032	3032		and amended to read: 2047
3033	3033		738.413 738.606 Marital deduction property not productive 2048
3034	3034		of income.— 2049
3035	3035		(1) If a trust received property for which a gift or 2050
3036		-	~~ENROLLED~~
3037		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3044	3044		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3045	3045
3046	3046
3047	3047
3048	3048		estate tax marital deduction was under the Internal Revenue Code 2051
3049	3049		or comparable law of any state is allowed, for all or if part of 2052
3050	3050		a trust received property satisfyi ng, or if assets are 2053
3051	3051		transferred to a trust that satisfies the requirements of s. 2054
3052	3052		732.2025(2)(a) and (c), and such property has assets have been 2055
3053	3053		used in whole or in part to satisfy an election by a surviving 2056
3054	3054		spouse under s. 732.2125 , and the settlor's spouse holds a 2057
3055	3055		mandatory income interest in the trust, the spouse may require 2058
3056	3056		the trustee, to the extent that the trust assets otherwise do 2059
3057	3057		consist of property that, in the aggregate, does not provide the 2060
3058	3058		spouse with sufficient income from or use of the trust assets to 2061
3059	3059		qualify for the deduction, or to satisfy an election by a 2062
3060	3060		surviving spouse under s. 732.2125, to make the property 2063
3061	3061		productive of income within a reasonable time. The trustee may: 2064
3062	3062		(a) Convert property to property productive of income 2065
3063	3063		within a reasonable time; 2066
3064	3064		(b) Exercise the power to adjust under s. 738.203; 2067
3065	3065		(c) Exercise the power to convert to or from a unitrust 2068
3066	3066		under s. 738.303; or 2069
3067	3067		(d) Exercise the fiduciary's authority under the terms of 2070
3068	3068		the trust to otherwise provide the surviving spou se with 2071
3069	3069		sufficient income from the trust assets, or the use of the trust 2072
3070	3070		assets, to qualify for the marital deduction, or to satisfy an 2073
3071	3071		election by a surviving spouse under s. 732.2125. 2074
3072	3072		(2) The trustee may decide which action or combination of 2075
3073		-	~~ENROLLED~~
3074		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3081	3081		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3082	3082
3083	3083
3084	3084
3085	3085		actions listed in subsection (1) to take. 2076
3086	3086		(3) Subsection (1) shall apply , and if amounts the trustee 2077
3087	3087		transfers from principal to income under s. 738.104 and 2078
3088	3088		distributes to the spouse from principal pursuant to the terms 2079
3089	3089		of the trust are insufficient to provide the spouse with the 2080
3090	3090		beneficial enjoyment required to obtain the marital deduction, 2081
3091	3091		even though, in the case of an elective share trust under s. 2082
3092	3092		732.2025(2), a marital deduction is not made or is only 2083
3093	3093		partially made, the spouse may require the trustee of such 2084
3094	3094		marital trust or elective share trust to make property 2085
3095	3095		productive of income, convert property within a reasonable time, 2086
3096	3096		or exercise the power conferred by ss. 738.104 and 738.1041 . 2087
3097	3097		(4) The terms of a trust as defined in s. 738.102 may not 2088
3098	3098		supersede this section unless such terms explicitly reference 2089
3099	3099		this section The trustee may decide which action or combination 2090
3100	3100		of actions to take. 2091
3101	3101		(2) In cases not governed by subsection (1), proceeds from 2092
3102	3102		the sale or other disposition of an asset are principal without 2093
3103	3103		regard to the amount of income the asset produces during any 2094
3104	3104		accounting period. 2095
3105	3105		Section 33. Section 738.607, Florida Statutes, is 2096
3106	3106		transferred, renumbered as section 738.414, Florida Statutes, 2097
3107	3107		and amended to read: 2098
3108	3108		738.414 738.607 Derivatives or and options.— 2099
3109	3109		(1) As used in For purposes of this section, the term 2100
3110		-	~~ENROLLED~~
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3118	3118		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3119	3119
3120	3120
3121	3121
3122	3122		"derivative" means a contract , an or financial instrument, or 2101
3123	3123		other arrangement, or a combination of contracts , and financial 2102
3124	3124		instruments, or other arrangements, of which the value, rights, 2103
3125	3125		and obligations are, in whole or in part, dependent on or 2104
3126	3126		derived from an underlying which gives a trust the right or 2105
3127	3127		obligation to participate in some or all changes in the price of 2106
3128	3128		a tangible or intangible asset , a or group of tangible or 2107
3129	3129		intangible assets, an index, or an occurrence of an event. The 2108
3130	3130		term includes stocks, fixed income securities, and financial 2109
3131	3131		instruments and arrangements based on indices, commodities, 2110
3132	3132		interest rates, weather -related events, and credit -default 2111
3133	3133		events assets, or changes in a rate, an index of prices or 2112
3134	3134		rates, or other market indicator for an asset or a group of 2113
3135	3135		assets. 2114
3136	3136		(2) To the extent that a fiduciary does not account for a 2115
3137	3137		transaction in derivatives as a business under s. 738.403 for 2116
3138	3138		transactions in derivatives , the fiduciary shall allocate 10 2117
3139	3139		percent of to principal receipts from the transaction and 10 2118
3140	3140		percent of and disbursements made in connection with the 2119
3141	3141		transaction to income and allocate the balance to principal 2120
3142	3142		those transactions. 2121
3143	3143		(3) Subsection (4) applies if: 2122
3144	3144		(a) A fiduciary: 2123
3145	3145		1. If a fiduciary Grants an option to buy property from a 2124
3146	3146		the trust, regardless of or estate whether or not the trust or 2125
3147		-	~~ENROLLED~~
3148		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3155	3155		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3156	3156
3157	3157
3158	3158
3159	3159		estate owns the property when the option is granted ;, 2126
3160	3160		2. Grants an option that permits another person to sell 2127
3161	3161		property to the trust ; or 2128
3162	3162		3. estate, or Acquires an option to buy property for the 2129
3163	3163		trust or estate or an option to sell an asset owned by the trust 2130
3164	3164		or estate;, and 2131
3165	3165		(b) The fiduciary or other owner of the asset is required 2132
3166	3166		to deliver the asset if the option is exercised , an amount 2133
3167	3167		received for granting the option shall be allocated to 2134
3168	3168		principal. An amount paid to acquire the option shall be paid 2135
3169	3169		from principal. 2136
3170	3170		(4) If this subsection applies, the f iduciary must 2137
3171	3171		allocate 10 percent to income and allocate the balance to 2138
3172	3172		principal of the following amounts: 2139
3173	3173		(a) An amount received for granting the option; 2140
3174	3174		(b) An amount paid to acquire the option; and 2141
3175	3175		(c) A Gain or loss realized on upon the exercise, 2142
3176	3176		exchange, settlement, offset, closing, or expiration of the 2143
3177	3177		option of an option, including an option granted to a grantor of 2144
3178	3178		the trust or estate for services rendered, shall be allocated to 2145
3179	3179		principal. 2146
3180	3180		Section 34. Section 738.608, Florida Statutes, is 2147
3181	3181		transferred, renumbered as section 738.415, Florida Statutes, 2148
3182	3182		and amended to read: 2149
3183	3183		738.415 738.608 Asset-backed securities.— 2150
3184		-	~~ENROLLED~~
3185		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3192	3192		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3193	3193
3194	3194
3195	3195
3196	3196		(1) Except as otherwise provided in subsection (2), a 2151
3197	3197		fiduciary shall allocate to income a receipt from or related to 2152
3198	3198		an asset-backed security, as defined in s. 738.102, to the 2153
3199	3199		extent that the payor identifies the payment as being from For 2154
3200	3200		purposes of this section, "asset -backed security" means an asset 2155
3201	3201		the value of which is based upon the right given the owner to 2156
3202	3202		receive distributions from the proceeds of financial assets that 2157
3203	3203		provide collateral for the security. The term includes an asset 2158
3204	3204		that gives the owner the right to receive from the collateral 2159
3205	3205		financial assets only the interest or other current return and 2160
3206	3206		allocate to principal the balance of the receipt or only the 2161
3207	3207		proceeds other than interest or current return . The term does 2162
3208	3208		not include an asset to which s. 738.401 or s. 738.602 applies. 2163
3209	3209		(2) If a fiduciary receives one or more payments in 2164
3210	3210		exchange for part or all of the fiduciary's interest in an 2165
3211	3211		asset-backed security, including a liquidation or redemption of 2166
3212	3212		the fiduciary's interest in the security trust or estate 2167
3213	3213		receives a payment from interest or other current return and 2168
3214	3214		from other proceeds of the collateral financial assets, the 2169
3215	3215		fiduciary must shall allocate to income 10 percent of receipts 2170
3216	3216		from the transaction and 10 percent of disbursements made in 2171
3217	3217		connection with the transaction, and allocate to principal the 2172
3218	3218		portion of the payment which the payor identifies as bei ng from 2173
3219	3219		interest or other current return and allocate the balance of the 2174
3220	3220		receipts and disbursements payment to principal . 2175
3221		-	~~ENROLLED~~
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3229	3229		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3230	3230
3231	3231
3232	3232
3233	3233		(3) If a trust or estate receives one or more payments in 2176
3234	3234		exchange for the trust's or estate's entire interest in an 2177
3235	3235		asset-backed security during a single accounting period, the 2178
3236	3236		fiduciary shall allocate the payments to principal. If a payment 2179
3237	3237		is one of a series of payments that will result in the 2180
3238	3238		liquidation of the trust's or estate's interest in the security 2181
3239	3239		over more than a single ac counting period, the fiduciary shall 2182
3240	3240		allocate 10 percent of the payment to income and the balance to 2183
3241	3241		principal. 2184
3242	3242		Section 35. Section 738.416, Florida Statutes, is created 2185
3243	3243		to read: 2186
3244	3244		738.416 Other financial instrument or arrangement. —A 2187
3245	3245		fiduciary shall allocate receipts from or related to a financial 2188
3246	3246		instrument or arrangement not otherwise addressed by this 2189
3247	3247		chapter. The allocation must be consistent with ss. 738.414 and 2190
3248	3248		738.415. 2191
3249	3249		Section 36. Section 738.501, Florida Statutes, is amended 2192
3250	3250		to read: 2193
3251	3251		(Substantial rewording of section. See 2194
3252	3252		s. 738.501, F.S., for present text.) 2195
3253	3253		738.501 Disbursement from income. —Subject to s. 738.504, 2196
3254	3254		and except as otherwise provided in s. 738.601(3)(b) or (c), a 2197
3255	3255		fiduciary shall disburse from income: 2198
3256	3256		(1) One-half of: 2199
3257	3257		(a) The regular compensation of the fiduciary and of any 2200
3258		-	~~ENROLLED~~
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3266	3266		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3267	3267
3268	3268
3269	3269
3270	3270		person providing investment advisory, custodial, or other 2201
3271	3271		services to the fiduciary to the extent that income is 2202
3272	3272		sufficient; and 2203
3273	3273		(b) An expense for an accounting, judicial or nonjudicial 2204
3274	3274		proceeding, or other matter that involves both income and 2205
3275	3275		successive interests to the extent income is sufficient. 2206
3276	3276		(2) The balance of the disbursements described in 2207
3277	3277		subsection (1), to the extent that a fiduciary who is an 2208
3278	3278		independent person determines that making thos e disbursements 2209
3279	3279		from income would be in the interests of the beneficiaries. 2210
3280	3280		(3) Any other ordinary expense incurred in connection with 2211
3281	3281		administration, management, or preservation of property and 2212
3282	3282		distribution of income, including interest, an ordinary rep air, 2213
3283	3283		a regularly recurring tax assessed against principal, and an 2214
3284	3284		expense of an accounting, judicial or nonjudicial proceeding, or 2215
3285	3285		other matter that involves primarily an income interest, to the 2216
3286	3286		extent that income is sufficient. 2217
3287	3287		(4) A premium on insuranc e covering loss of a principal 2218
3288	3288		asset or income from or use of the asset. 2219
3289	3289		Section 37. Section 738.502, Florida Statutes, is amended 2220
3290	3290		to read: 2221
3291	3291		(Substantial rewording of section. See 2222
3292	3292		s. 738.502, F.S., for present text.) 2223
3293	3293		738.502 Disbursement from principal.— 2224
3294	3294		(1) Subject to s. 738.505, and except as otherwise 2225
3295		-	~~ENROLLED~~
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3303	3303		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3304	3304
3305	3305
3306	3306
3307	3307		provided in s. 738.601(3)(b), a fiduciary shall disburse all of 2226
3308	3308		the following from principal: 2227
3309	3309		(a) The balance of the disbursements described in s. 2228
3310	3310		738.501(1) and (3), after application of s . 738.501(2). 2229
3311	3311		(b) The fiduciary's compensation calculated on principal 2230
3312	3312		as a fee for acceptance, distribution, or termination. 2231
3313	3313		(c) A payment of an expense to prepare for or execute a 2232
3314	3314		sale or other disposition of property. 2233
3315	3315		(d) A payment on the principa l of a trust debt. 2234
3316	3316		(e) A payment of an expense of an accounting, judicial or 2235
3317	3317		nonjudicial proceeding, or other matter that involves primarily 2236
3318	3318		principal, including a proceeding to construe the terms of the 2237
3319	3319		trust or protect property. 2238
3320	3320		(f) A payment of a premium for insurance, including title 2239
3321	3321		insurance, not described in s. 738.501(4) of which the fiduciary 2240
3322	3322		is the owner and beneficiary. 2241
3323	3323		(g) A payment of estate, inheritance, and other transfer 2242
3324	3324		taxes, including penalties, apportioned to the trust. 2243
3325	3325		(h) A payment related to environmental matters including: 2244
3326	3326		1. Reclamation; 2245
3327	3327		2. Assessing environmental conditions; 2246
3328	3328		3. Remedying and removing environmental contamination; 2247
3329	3329		4. Monitoring remedial activities and the release of 2248
3330	3330		substances; 2249
3331	3331		5. Preventing future releases of substances; 2250
3332		-	~~ENROLLED~~
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3340	3340		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3341	3341
3342	3342
3343	3343
3344	3344		6. Collecting amounts from persons liable or potentially 2251
3345	3345		liable for the costs of the activities described in 2252
3346	3346		subparagraphs 1.-5.; 2253
3347	3347		7. Penalties imposed under environmental laws or 2254
3348	3348		regulations; 2255
3349	3349		8. Other actions to comply with e nvironmental laws or 2256
3350	3350		regulations; 2257
3351	3351		9. Statutory or common law claims by third parties; and 2258
3352	3352		10 Defending claims based on environmental matters. 2259
3353	3353		(i) A payment of a premium for insurance for matters 2260
3354	3354		described in paragraph (h). 2261
3355	3355		(2) If a principal asset is encumbered with an obligation 2262
3356	3356		that requires income from the asset to be paid directly to a 2263
3357	3357		creditor, the fiduciary must transfer from principal to income 2264
3358	3358		an amount equal to the income paid to the creditor in reduction 2265
3359	3359		of the principal balance of the obl igation. 2266
3360	3360		Section 38. Section 738.503, Florida Statutes, is amended 2267
3361	3361		to read: 2268
3362	3362		(Substantial rewording of section. See 2269
3363	3363		s. 738.503, F.S., for present text.) 2270
3364	3364		738.503 Transfers from income to principal for 2271
3365	3365		depreciation.— 2272
3366	3366		(1) For purposes of this section , "depreciation" means a 2273
3367	3367		reduction in value due to wear, tear, decay, corrosion, or 2274
3368	3368		gradual obsolescence of a tangible asset having a useful life of 2275
3369		-	~~ENROLLED~~
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3377	3377		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3378	3378
3379	3379
3380	3380
3381	3381		more than 1 year. 2276
3382	3382		(2) A fiduciary may transfer to principal a reasonable 2277
3383	3383		amount of the net cash receipts from a principal asset that is 2278
3384	3384		subject to depreciation but may not transfer any amount for 2279
3385	3385		depreciation: 2280
3386	3386		(a) Of the part of real property used or available for use 2281
3387	3387		by a beneficiary as a residence; 2282
3388	3388		(b) Of tangible personal property held or made available 2283
3389	3389		for the personal use or enjoyment of a beneficiary; or 2284
3390	3390		(c) Under this section, to the extent that the fiduciary 2285
3391	3391		accounts: 2286
3392	3392		1. Under s. 738.410 for the asset; or 2287
3393	3393		2. Under s. 738.403 for the business or other activity in 2288
3394	3394		which the asset is use d. 2289
3395	3395		(3) An amount transferred to principal under this section 2290
3396	3396		need not be separately held. 2291
3397	3397		Section 39. Section 738.504, Florida Statutes, is amended 2292
3398	3398		to read: 2293
3399	3399		(Substantial rewording of section. See 2294
3400	3400		s. 738.504, F.S., for present text.) 2295
3401	3401		738.504 Reimbursement of income from principal. — 2296
3402	3402		(1) If a fiduciary makes or expects to make an income 2297
3403	3403		disbursement described in subsection (2), the fiduciary may 2298
3404	3404		transfer an appropriate amount from principal to income in one 2299
3405	3405		or more accounting periods to reimburse i ncome. 2300
3406		-	~~ENROLLED~~
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3414	3414		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3415	3415
3416	3416
3417	3417
3418	3418		(2) To the extent that the fiduciary has not been and does 2301
3419	3419		not expect to be reimbursed by a third party, income 2302
3420	3420		disbursements to which subsection (1) applies include: 2303
3421	3421		(a) An amount chargeable to principal but paid from income 2304
3422	3422		because principal is illiquid; 2305
3423	3423		(b) A disbursement made to prepare property for sale, 2306
3424	3424		including improvements and commissions; and 2307
3425	3425		(c) A disbursement described in s. 738.502(1). 2308
3426	3426		(3) If an asset whose ownership gives rise to an income 2309
3427	3427		disbursement becomes subject to a suc cessive interest after an 2310
3428	3428		income interest ends, the fiduciary may continue to make 2311
3429	3429		transfers under subsection (1). 2312
3430	3430		Section 40. Section 738.704, is transferred, renumbered as 2313
3431	3431		section 738.505, Florida Statutes, and amended to read: 2314
3432	3432		738.505 738.704 Reimbursement of principal from income 2315
3433	3433		Transfers from income to reimburse principal .— 2316
3434	3434		(1) If a fiduciary makes or expects to make a principal a 2317
3435	3435		principal disbursement described in subsection (2) this section, 2318
3436	3436		the fiduciary may transfer an appropriate amount from income to 2319
3437	3437		principal in one or more accounting periods to reimburse 2320
3438	3438		principal or to provide a reserve for future principal 2321
3439	3439		disbursements. 2322
3440	3440		(2) Principal disbursements to which subsection (1) 2323
3441	3441		applies include the following, but only To the extent that a the 2324
3442	3442		fiduciary has not been and does not expect to be reimbursed by a 2325
3443		-	~~ENROLLED~~
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3451	3451		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3452	3452
3453	3453
3454	3454
3455	3455		third party, principal disbursements to which subsection (1) 2326
3456	3456		applies include: 2327
3457	3457		(a) An amount chargeable to income but paid from principal 2328
3458	3458		because income is not sufficient; the amount is unusually large. 2329
3459	3459		(b) The cost of an improvement to principal, whether a 2330
3460	3460		change to an existing asset or the construction of a new asset, 2331
3461	3461		including a special assessment; Disbursements made to prepare 2332
3462	3462		property for rental, including tenant allowances, lease hold 2333
3463	3463		improvements, and broker's commissions. 2334
3464	3464		(c) A disbursement made to prepare property for rental, 2335
3465	3465		including tenant allowances, leasehold improvements, and 2336
3466	3466		commissions; Disbursements described in s. 738.702(1)(g) . 2337
3467	3467		(d) A periodic payment on an obligat ion secured by a 2338
3468	3468		principal asset, to the extent the amount transferred from 2339
3469	3469		income to principal for depreciation is less than the periodic 2340
3470	3470		payment; and 2341
3471	3471		(e) A disbursement described in s. 738.502(1). 2342
3472	3472		(3) If an the asset whose the ownership of which gives 2343
3473	3473		rise to a principal disbursement the disbursements becomes 2344
3474	3474		subject to a successive income interest after an income interest 2345
3475	3475		ends, the a fiduciary may continue to make transfers under 2346
3476	3476		transfer amounts from income to principal as provided in 2347
3477	3477		subsection (1). 2348
3478	3478		(4) To the extent principal cash is not sufficient to pay 2349
3479	3479		the principal balance of payments due on mortgaged property, 2350
3480		-	~~ENROLLED~~
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3488	3488		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3489	3489
3490	3490
3491	3491
3492	3492		income may be applied to such payment in order to avoid a 2351
3493	3493		default on any mortgage or security interest securing the 2352
3494	3494		property. Income shall be reimbursed for such payments out of 2353
3495	3495		the first available principal cash. If the asset the ownership 2354
3496	3496		of which gives rise to the disbursements described in this 2355
3497	3497		subsection becomes subject to a successive income interest after 2356
3498	3498		an income interest ends, all rights of the initial income 2357
3499	3499		interest shall lapse, and amounts remaining due from principal 2358
3500	3500		shall not be a lien on the assets of the trust. 2359
3501	3501		Section 41. Section 738.705, Florida Statutes, is 2360
3502	3502		transferred, renumbered as section 738.506, Florida Statu tes, 2361
3503	3503		and amended to read: 2362
3504	3504		738.506 738.705 Income taxes.— 2363
3505	3505		(1) A tax required to be paid by a fiduciary which is 2364
3506	3506		based on receipts allocated to income must shall be paid from 2365
3507	3507		income. 2366
3508	3508		(2) A tax required to be paid by a fiduciary which is 2367
3509	3509		based on receipts allocated to principal must shall be paid from 2368
3510	3510		principal, even if the tax is called an income tax by the taxing 2369
3511	3511		authority. 2370
3512	3512		(3) Subject to subsection (4) and ss. 738.504, 738.505, 2371
3513	3513		and 738.507, a tax required to be paid by a fiduciary on a the 2372
3514	3514		trust's or estate's share of an entity's taxable income in an 2373
3515	3515		accounting period must shall be paid from proportionately: 2374
3516	3516		(a) From Income and principal proportionately to the 2375
3517		-	~~ENROLLED~~
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3525	3525		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3526	3526
3527	3527
3528	3528
3529	3529		allocation between income and principal of to the extent 2376
3530	3530		receipts from the entity in the period are allocated to income . 2377
3531	3531		(b) From principal to the extent receipts from the entity 2378
3532	3532		are allocated to principal. 2379
3533	3533		(c) From Principal to the extent that the tax exceeds the 2380
3534	3534		income taxes payable by the trust or estate exceed the total 2381
3535	3535		receipts from the entity in the period. 2382
3536	3536		(4) After applying subsections (1), (2), and (3), a 2383
3537	3537		fiduciary shall adjust income or principal receipts, to the 2384
3538	3538		extent the taxes that the fiduciary pays are reduced because of 2385
3539	3539		a deduction for a pa yment made to a beneficiary. 2386
3540	3540		(5) Subject to the limitations and excluded assets 2387
3541	3541		provided under s. 736.08145, a reimbursement of state or federal 2388
3542	3542		income tax elected to be made by a fiduciary pursuant to s. 2389
3543	3543		736.08145 must be allocated and paid under paragr aphs (3)(a) and 2390
3544	3544		(b) After applying subsections (1) -(3), the fiduciary shall 2391
3545	3545		adjust income or principal receipts to the extent that the 2392
3546	3546		trust's or estate's income taxes are reduced, but not 2393
3547	3547		eliminated, because the trust or estate receives a deduction for 2394
3548	3548		payments made to a beneficiary . The amount distributable to that 2395
3549	3549		beneficiary as income as a result of this adjustment shall be 2396
3550	3550		equal to the cash received by the trust or estate, reduced, but 2397
3551	3551		not below zero, by the entity's taxable income allocable to the 2398
3552	3552		trust or estate multiplied by the trust's or estate's income tax 2399
3553	3553		rate. The reduced amount shall be divided by the difference 2400
3554		-	~~ENROLLED~~
3555		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3562	3562		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3563	3563
3564	3564
3565	3565
3566	3566		between 1 and the trust's or estate's income tax rate in order 2401
3567	3567		to determine the amount distributable to that beneficiary as 2402
3568	3568		income before giving effect to other receipts or disbursements 2403
3569	3569		allocable to that beneficiary's interest. 2404
3570	3570		Section 42. Section 738.706, Florida Statutes, is 2405
3571	3571		transferred, renumbered as section 738.507, Florida Statutes, 2406
3572	3572		and amended to read: 2407
3573	3573		738.507 738.706 Adjustment Adjustments between principal 2408
3574	3574		and income because of taxes. — 2409
3575	3575		(1) A fiduciary may make an adjustment adjustments between 2410
3576	3576		principal and income and principal to offset the shifting of 2411
3577	3577		economic interests or tax benefits between current income 2412
3578	3578		beneficiaries and successor remainder beneficiaries which arises 2413
3579	3579		arise from: 2414
3580	3580		(a) An election or decision Elections and decisions, other 2415
3581	3581		than those described in paragraph (b), that the fiduciary makes 2416
3582	3582		from time to time regarding a tax matter, other than a decision 2417
3583	3583		to claim an income tax deduction to which subsection (2) applies 2418
3584	3584		matters; 2419
3585	3585		(b) An income tax or any other tax that is imposed on upon 2420
3586	3586		the fiduciary or a beneficiary as a result of a transaction 2421
3587	3587		involving the fiduciary or a distribution by from the fiduciary 2422
3588	3588		estate or trust; or 2423
3589	3589		(c) The Ownership by the fiduciary an estate or trust of 2424
3590	3590		an interest in an entity a part of whose taxable income, 2425
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3599	3599		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3600	3600
3601	3601
3602	3602
3603	3603		regardless of whether or not distributed, is includable in the 2426
3604	3604		taxable income of the fiduciary estate, trust, or a beneficiary; 2427
3605	3605		or 2428
3606	3606		(d) An election or decision a fiduciary makes to reimburse 2429
3607	3607		any tax under s. 736.08145 . 2430
3608	3608		(2) If the amount of an estate tax marital deduction or 2431
3609	3609		charitable contribution deduction is reduced because a fiduciary 2432
3610	3610		deducts an amount paid from principal for income tax purposes 2433
3611	3611		instead of deducting it such amount for estate tax purposes , 2434
3612	3612		and, as a result, estate taxes paid from principal are increased 2435
3613	3613		and income taxes paid by a fiduciary or a an estate, trust, or 2436
3614	3614		beneficiary are decreased, the fiduciary shall charge each 2437
3615	3615		estate, trust, or beneficiary that benefits from the decrease in 2438
3616	3616		income tax to shall reimburse the principal from which the 2439
3617	3617		increase in estate tax is paid. The total reimbursement must 2440
3618	3618		shall equal the increase in the estate t ax, to the extent that 2441
3619	3619		the principal used to pay the increase would have qualified for 2442
3620	3620		a marital deduction or charitable contribution deduction but for 2443
3621	3621		the payment. The proportionate share of the reimbursement for 2444
3622	3622		each fiduciary estate, trust, or beneficiary whose income taxes 2445
3623	3623		are reduced must shall be the same as its such estate's, 2446
3624	3624		trust's, or beneficiary's proportionate share of the total 2447
3625	3625		decrease in income tax. An estate or trust shall reimburse 2448
3626	3626		principal from income. 2449
3627	3627		(3) A fiduciary that charges a beneficiary under 2450
3628		-	~~ENROLLED~~
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3636	3636		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3637	3637
3638	3638
3639	3639
3640	3640		subsection (2) may offset the charge by obtaining payment from 2451
3641	3641		the beneficiary, withholding an amount from future distributions 2452
3642	3642		to the beneficiary, or adopting another method or combination of 2453
3643	3643		methods. 2454
3644	3644		Section 43. Section 738.508, Flo rida Statutes, is created 2455
3645	3645		to read: 2456
3646	3646		738.508 Apportionment of property expenses between tenant 2457
3647	3647		and remainderman.— 2458
3648	3648		(1) For purposes of this section, the term: 2459
3649	3649		(a) "Remainderman" means the holder of the remainder 2460
3650	3650		interests after the expiration of a tenan t's estate in property. 2461
3651	3651		(b) "Tenant" means the holder of an estate for life or 2462
3652	3652		term of years in real property or personal property, or both. 2463
3653	3653		(2) If a trust has not been created, expenses shall be 2464
3654	3654		apportioned between the tenant and remainderman as follo ws: 2465
3655	3655		(a) The following expenses are allocated to and shall be 2466
3656	3656		paid by the tenant: 2467
3657	3657		1. All ordinary expenses incurred in connection with the 2468
3658	3658		administration, management, or preservation of the property, 2469
3659	3659		including interest, ordinary repairs, regularly recur ring taxes 2470
3660	3660		assessed against the property, and expenses of a proceeding or 2471
3661	3661		other matter that concerns primarily the tenant's estate or use 2472
3662	3662		of the property. 2473
3663	3663		2. Recurring premiums on insurance covering the loss of 2474
3664	3664		the property or the loss of income from or use of the property. 2475
3665		-	~~ENROLLED~~
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3673	3673		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3674	3674
3675	3675
3676	3676
3677	3677		3. Any of the expenses described in subparagraph (b)3. 2476
3678	3678		which are attributable to the use of the property by the tenant. 2477
3679	3679		(b) The following expenses are allocated to and shall be 2478
3680	3680		paid by the remainderman: 2479
3681	3681		1. Payments on the princip al of a debt secured by the 2480
3682	3682		property, except to the extent that the debt is for expenses 2481
3683	3683		allocated to the tenant. 2482
3684	3684		2. Expenses of a proceeding or other matter that concerns 2483
3685	3685		primarily the title to the property, other than title to the 2484
3686	3686		tenant's estate. 2485
3687	3687		3. Except as provided in subparagraph (a)3., expenses 2486
3688	3688		related to environmental matters, including reclamation, 2487
3689	3689		assessing environmental conditions, remedying and removing 2488
3690	3690		environmental contamination, monitoring remedial activities and 2489
3691	3691		the release of substance s, preventing future releases of 2490
3692	3692		substances, collecting amounts from persons liable or 2491
3693	3693		potentially liable for the costs of such activities, penalties 2492
3694	3694		imposed under environmental laws or regulations and other 2493
3695	3695		payments made to comply with those laws or regul ations, 2494
3696	3696		statutory or common law claims by third parties, and defending 2495
3697	3697		claims based on environmental matters. 2496
3698	3698		4. Extraordinary repairs. 2497
3699	3699		(c) If the tenant or remainderman incurred an expense for 2498
3700	3700		the benefit of his or her own estate without consent or 2499
3701	3701		agreement of the other, he or she must pay such expense in full. 2500
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3710	3710		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3711	3711
3712	3712
3713	3713
3714	3714		(d) Except as provided in paragraph (c), the cost of, or 2501
3715	3715		special taxes or assessments for, an improvement representing an 2502
3716	3716		addition of value to property forming part of the principal 2503
3717	3717		shall be paid by the tenant if the improvement is not reasonably 2504
3718	3718		expected to outlast the estate of the tenant. In all other 2505
3719	3719		cases, only a part shall be paid by the tenant while the 2506
3720	3720		remainder shall be paid by the remainderman. The part payable by 2507
3721	3721		the tenant is ascertainable by taking that percentage of the 2508
3722	3722		total that is found by dividing the present value of the 2509
3723	3723		tenant's estate by the present value of an estate of the same 2510
3724	3724		form as that of the tenant, except that it is limited for a 2511
3725	3725		period corresponding to the reasona bly expected duration of the 2512
3726	3726		improvement. The computation of present values of the estates 2513
3727	3727		shall be made by using the rate determined under s. 7520(a)(2) 2514
3728	3728		of the Internal Revenue Code then in effect and, in the case of 2515
3729	3729		an estate for life, the official morta lity tables then in effect 2516
3730	3730		under s. 7520 of the Internal Revenue Code. Other evidence of 2517
3731	3731		duration or expectancy may not be considered. 2518
3732	3732		(3) This section does not apply to the extent that it is 2519
3733	3733		inconsistent with the instrument creating the estates, the 2520
3734	3734		agreement of the parties, or the specific direction of the 2521
3735	3735		Internal Revenue Code taxing or other applicable law. 2522
3736	3736		(4) The common law applicable to tenants and remaindermen 2523
3737	3737		supplements this section, except as modified by this section or 2524
3738	3738		other laws. 2525
3739		-	~~ENROLLED~~
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3747	3747		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3748	3748
3749	3749
3750	3750
3751	3751		Section 44. Section 738.601, Florida Statutes, is amended 2526
3752	3752		to read: 2527
3753	3753		(Substantial rewording of section. See 2528
3754	3754		s. 738.601, F.S., for present text.) 2529
3755	3755		738.601 Determination and distribution of net income. — 2530
3756	3756		(1) This section applies when: 2531
3757	3757		(a) The death of an indiv idual results in the creation of 2532
3758	3758		an estate or trust; or 2533
3759	3759		(b) An income interest in a trust terminates, whether the 2534
3760	3760		trust continues or is distributed. 2535
3761	3761		(2) A fiduciary of an estate or trust with an income 2536
3762	3762		interest that terminates shall determine, under su bsection (6) 2537
3763	3763		and ss. 738.401-738.508 and 738.701-738.703, the amount of net 2538
3764	3764		income and net principal receipts received from property 2539
3765	3765		specifically given to a beneficiary. The fiduciary shall 2540
3766	3766		distribute the net income and net principal receipts to the 2541
3767	3767		beneficiary who is to receive the specific property. 2542
3768	3768		(3) A fiduciary shall determine the income and net income 2543
3769	3769		of an estate or income interest in a trust which terminates, 2544
3770	3770		other than the amount of net income determined under subsection 2545
3771	3771		(2), under ss. 738.401 -738.508 and 738.701-738.703, and by: 2546
3772	3772		(a) Including in net income all income from property used 2547
3773	3773		or sold to discharge liabilities. 2548
3774	3774		(b) Paying from income or principal, in the fiduciary's 2549
3775	3775		discretion, fees of attorneys, accountants, and fiduciaries; 2550
3776		-	~~ENROLLED~~
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3784	3784		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3785	3785
3786	3786
3787	3787
3788	3788		court costs and other expenses of administration; and interest 2551
3789	3789		on estate and inheritance taxes and other taxes imposed because 2552
3790	3790		of the decedent's death, but the fiduciary may pay the expenses 2553
3791	3791		from income of property passing to a trust for which the 2554
3792	3792		fiduciary claims an estate tax marital or charitable deduction 2555
3793	3793		under the Internal Revenue Code or comparable law of any state 2556
3794	3794		only to the extent that: 2557
3795	3795		1. The payment of the expenses from income will not cause 2558
3796	3796		the reduction or loss of the deduction; or 2559
3797	3797		2. The fiduciary makes an adjustment under s. 738.507(2); 2560
3798	3798		and 2561
3799	3799		(c) Paying from principal other disbursements made or 2562
3800	3800		incurred in connection with the settlement of the estate or the 2563
3801	3801		winding up of an income interest that terminates, including: 2564
3802	3802		1. To the extent authorize d by the decedent's will, the 2565
3803	3803		terms of the trust, or applicable law, debts, funeral expenses, 2566
3804	3804		disposition of remains, family allowances, estate and 2567
3805	3805		inheritance taxes, and other taxes imposed because of the 2568
3806	3806		decedent's death; and 2569
3807	3807		2. Related penalties appor tioned by the decedent's will, 2570
3808	3808		the terms of the trust, or applicable law to the estate or 2571
3809	3809		income interest that terminates. 2572
3810	3810		(4) If a decedent's will or the terms of a trust provide 2573
3811	3811		for the payment of interest or the equivalent of interest to a 2574
3812	3812		beneficiary who receives a pecuniary amount outright, the 2575
3813		-	~~ENROLLED~~
3814		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3816		-
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3819		-	hb1093-~~03-er~~
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3821	3821		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3822	3822
3823	3823
3824	3824
3825	3825		fiduciary shall make the payment from net income determined 2576
3826	3826		under subsection (3) or from principal to the extent that net 2577
3827	3827		income is insufficient. 2578
3828	3828		(5) A fiduciary shall distribute net income remaining 2579
3829	3829		after payments required by subsection (4) in the manner 2580
3830	3830		described in s. 738.602 to all other beneficiaries, including a 2581
3831	3831		beneficiary who receives a pecuniary amount in trust, even if 2582
3832	3832		the beneficiary holds an unqualified power to withdraw assets 2583
3833	3833		from the trust or other presently exercisable general power of 2584
3834	3834		appointment over the trust. 2585
3835	3835		(6) A fiduciary may not reduce principal or income 2586
3836	3836		receipts from property described in subsection (2) because of a 2587
3837	3837		payment described in s. 738.501 or s. 738.502 to the extent that 2588
3838	3838		the decedent's will, the terms of the trust, or applicable law 2589
3839	3839		requires the fiduciary to make the payment from assets other 2590
3840	3840		than the property or that the fiduciary recovers or expects to 2591
3841	3841		recover the payment from a third party. The net income and 2592
3842	3842		principal receipts from the property must be determined by 2593
3843	3843		including the amount the fiduciary receives or pays regarding 2594
3844	3844		the property, whether the amount accrued or became due before, 2595
3845	3845		on, or after the date of the decedent's death or an income 2596
3846	3846		interest's terminating ev ent, and making a reasonable provision 2597
3847	3847		for an amount the estate or income interest may become obligated 2598
3848	3848		to pay after the property is distributed. 2599
3849	3849		Section 45. Section 738.602, Florida Statutes, is amended 2600
3850		-	~~ENROLLED~~
3851		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
3852		-
3853		-
3854		-
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3856		-	hb1093-~~03-er~~
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3858	3858		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3859	3859
3860	3860
3861	3861
3862	3862		to read: 2601
3863	3863		(Substantial rewording of section. See 2602
3864	3864		s. 738.602, F.S., for present text.) 2603
3865	3865		738.602 Distribution to successor beneficiary. — 2604
3866	3866		(1) Except to the extent that ss. 738.301 -738.310 apply 2605
3867	3867		for a beneficiary that is a trust, each beneficiary described in 2606
3868	3868		s. 738.601(5) is entitled to receive a share of the net income 2607
3869	3869		equal to the beneficiary's fractional interest in undistributed 2608
3870	3870		principal assets, using carrying values as of the distribution 2609
3871	3871		date. If a fiduciary makes more than one distribution of assets 2610
3872	3872		to beneficiaries to which this section applies , each 2611
3873	3873		beneficiary, including a beneficiary who does not receive part 2612
3874	3874		of the distribution, is entitled, as of each distribution date, 2613
3875	3875		to a share of the net income the fiduciary received after the 2614
3876	3876		decedent's death, an income interest's other terminating eve nt, 2615
3877	3877		or the preceding distribution by the fiduciary. 2616
3878	3878		(2) In determining a beneficiary's share of net income 2617
3879	3879		under subsection (1), the following rules apply: 2618
3880	3880		(a) The beneficiary is entitled to receive a share of the 2619
3881	3881		net income equal to the beneficiary's fractional interest in the 2620
3882	3882		undistributed principal assets immediately before the 2621
3883	3883		distribution date. 2622
3884	3884		(b) The beneficiary's fractional interest under paragraph 2623
3885	3885		(a) must be calculated: 2624
3886	3886		1. On the aggregate carrying value of the assets as of the 2625
3887		-	~~ENROLLED~~
3888		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3890		-
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3893		-	hb1093-~~03-er~~
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	3888	+	CS/HB 1093, Engrossed 1 2024
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3895	3895		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3896	3896
3897	3897
3898	3898
3899	3899		distribution date; and 2626
3900	3900		2. Reduced by: 2627
3901	3901		a. Any liabilities of the estate or trust; 2628
3902	3902		b. Property specifically given to a beneficiary under the 2629
3903	3903		decedent's will or the terms of the trust; and 2630
3904	3904		c. Property required to pay pecuniary amounts not in 2631
3905	3905		trust. 2632
3906	3906		(c) If a disproportionate distribution of principal is 2633
3907	3907		made to any beneficiary, the respective fractional interests of 2634
3908	3908		all beneficiaries in the undistributed principal assets must be 2635
3909	3909		recomputed by: 2636
3910	3910		1. Adjusting the carrying value of the principal assets to 2637
3911	3911		their fair market value before the distribution; 2638
3912	3912		2. Reducing the fractional interest of the recipient of 2639
3913	3913		the disproportionate distribution in the remaining principal 2640
3914	3914		assets by the fair market value of the principal distribution; 2641
3915	3915		and 2642
3916	3916		3. Recomputing the fraction al interests of all 2643
3917	3917		beneficiaries in the remaining principal assets based upon the 2644
3918	3918		now restated carrying values. 2645
3919	3919		(d) The distribution date under paragraph (a) may be the 2646
3920	3920		date as of which the fiduciary calculates the value of the 2647
3921	3921		assets if that date is re asonably near the date on which the 2648
3922	3922		assets are distributed. All distributions to a beneficiary must 2649
3923	3923		be valued based on the assets' fair market value on the date of 2650
3924		-	~~ENROLLED~~
3925		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3932	3932		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3933	3933
3934	3934
3935	3935
3936	3936		the distribution. 2651
3937	3937		(3) To the extent that a fiduciary does not distribute 2652
3938	3938		under this section all the collected but undistributed net 2653
3939	3939		income to each beneficiary as of a distribution date, the 2654
3940	3940		fiduciary shall maintain records showing the interest of each 2655
3941	3941		beneficiary in the net income. 2656
3942	3942		(4) If this section applies to income from an asset, a 2657
3943	3943		fiduciary may apply the requirements in this section to net gain 2658
3944	3944		or loss realized from the disposition of the asset after the 2659
3945	3945		decedent's date of death, an income interest's terminating 2660
3946	3946		event, or the preceding distribution by the fiduciary. 2661
3947	3947		(5) The carrying val ue or fair market value of trust 2662
3948	3948		assets shall be determined on an asset -by-asset basis and is 2663
3949	3949		conclusive if reasonable and determined in good faith. 2664
3950	3950		Determinations of fair market value based on appraisals 2665
3951	3951		performed within 2 years before or after the valuat ion date are 2666
3952	3952		presumed reasonable. The values of trust assets are conclusively 2667
3953	3953		presumed to be reasonable and determined in good faith unless 2668
3954	3954		proven otherwise in a proceeding commenced by or on behalf of a 2669
3955	3955		person interested in the trust within the time provi ded in s. 2670
3956	3956		736.1008. 2671
3957	3957		Section 46. Section 738.701, Florida Statutes, is amended 2672
3958	3958		to read: 2673
3959	3959		(Substantial rewording of section. See 2674
3960	3960		s. 738.701, F.S., for present text.) 2675
3961		-	~~ENROLLED~~
3962		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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3969	3969		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
3970	3970
3971	3971
3972	3972
3973	3973		738.701 When right to income begins and ends. — 2676
3974	3974		(1) An income beneficiary is entitle d to net income in 2677
3975	3975		accordance with the terms of the trust from the date an income 2678
3976	3976		interest begins. The income interest begins on the date 2679
3977	3977		specified in the terms of the trust or, if no date is specified, 2680
3978	3978		on the date an asset becomes subject to: 2681
3979	3979		(a) The trust for the current income beneficiary; or 2682
3980	3980		(b) A successive interest for a successor beneficiary. 2683
3981	3981		(2) An asset becomes subject to a trust under paragraph 2684
3982	3982		(1)(a): 2685
3983	3983		(a) For an asset that is transferred to the trust during 2686
3984	3984		the settlor's life, on the date the asset is transferred; 2687
3985	3985		(b) For an asset that becomes subject to the trust because 2688
3986	3986		of a decedent's death, on the date of the decedent's death, even 2689
3987	3987		if there is an intervening period of administration of the 2690
3988	3988		decedent's estate; or 2691
3989	3989		(c) For an asset tha t is transferred to a fiduciary by a 2692
3990	3990		third party because of a decedent's death, on the date of the 2693
3991	3991		decedent's death. 2694
3992	3992		(3) An asset becomes subject to a successive interest 2695
3993	3993		under paragraph (1)(b) on the day after the preceding income 2696
3994	3994		interest ends, as dete rmined under subsection (4), even if there 2697
3995	3995		is an intervening period of administration to wind up the 2698
3996	3996		preceding income interest. 2699
3997	3997		(4) An income interest ends on the day before an income 2700
3998		-	~~ENROLLED~~
3999		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
4000		-
4001		-
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	4001	+
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4006	4006		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
4007	4007
4008	4008
4009	4009
4010	4010		beneficiary dies or another terminating event occurs, or on the 2701
4011	4011		last day of a period during which there is no beneficiary to 2702
4012	4012		which a fiduciary may or must distribute income. 2703
4013	4013		Section 47. Section 738.702, Florida Statutes, is amended 2704
4014	4014		to read: 2705
4015	4015		(Substantial rewording of section. See 2706
4016	4016		s. 738.702, F.S., for present text.) 2707
4017	4017		738.702 Apportionment of receipts and disbursements when 2708
4018	4018		decedent dies or income interest begins. — 2709
4019	4019		(1) A fiduciary shall allocate an income receipt or 2710
4020	4020		disbursement, other than a receipt to which s. 738.601(2) 2711
4021	4021		applies, to principal if its due date occurs before the date on 2712
4022	4022		which: 2713
4023	4023		(a) For an estate, the decedent died; or 2714
4024	4024		(b) For a trust or successive interest, an income interest 2715
4025	4025		begins. 2716
4026	4026		(2) If the due date of a periodic income receipt or 2717
4027	4027		disbursement occurs on or after the date on which a decedent 2718
4028	4028		died or an income interest begins, a fiduciary must allocate the 2719
4029	4029		receipt or disbursement to income. 2720
4030	4030		(3) If an income receipt or disbursement is not periodic 2721
4031	4031		or has no due date, a fiduciary must treat the receipt or 2722
4032	4032		disbursement under this section as accruin g from day to day. The 2723
4033	4033		fiduciary shall allocate to principal the portion of the receipt 2724
4034	4034		or disbursement accruing before the date on which a decedent 2725
4035		-	~~ENROLLED~~
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4043	4043		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
4044	4044
4045	4045
4046	4046
4047	4047		died or an income interest begins, and shall allocate to income 2726
4048	4048		the balance. 2727
4049	4049		(4) A receipt or disbursemen t is periodic under 2728
4050	4050		subsections (2) and (3) if: 2729
4051	4051		(a) The receipt or disbursement must be paid at regular 2730
4052	4052		intervals under an obligation to make payments; or 2731
4053	4053		(b) The payor customarily makes payments at regular 2732
4054	4054		intervals. 2733
4055	4055		(5) An item of income or an obli gation is due under this 2734
4056	4056		section on the date the payor is required to make a payment. If 2735
4057	4057		a payment date is not stated, there is no due date. 2736
4058	4058		(6) Distributions to shareholders or other owners from an 2737
4059	4059		entity to which s. 738.401 applies are due: 2738
4060	4060		(a) On the date fixed by or on behalf of the entity for 2739
4061	4061		determining the persons entitled to receive the distribution; 2740
4062	4062		(b) If no date is fixed, on the date of the decision by or 2741
4063	4063		on behalf of the entity to make the distribution; or 2742
4064	4064		(c) If no date is fixed and t he fiduciary does not know 2743
4065	4065		the date of the decision by or on behalf of the entity to make 2744
4066	4066		the distribution, on the date the fiduciary learns of the 2745
4067	4067		decision. 2746
4068	4068		(7) Section 733.817 controls over any provision of this 2747
4069	4069		chapter to the contrary. 2748
4070	4070		Section 48. Section 738.703, Florida Statutes, is amended 2749
4071	4071		to read: 2750
4072		-	~~ENROLLED~~
4073		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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4080	4080		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
4081	4081
4082	4082
4083	4083
4084	4084		(Substantial rewording of section. See 2751
4085	4085		s. 738.703, F.S., for present text.) 2752
4086	4086		738.703 Apportionment when income interest ends. — 2753
4087	4087		(1) As used in this section, the term "undistributed 2754
4088	4088		income" means net income received on or before the date on which 2755
4089	4089		an income interest ends. The term does not include an item of 2756
4090	4090		income or expense which is due or accrued or net income that has 2757
4091	4091		been added or is required to be added to principal under the 2758
4092	4092		terms of the trust. 2759
4093	4093		(2) Except as otherwise provided in subsection (3), when a 2760
4094	4094		mandatory income interest of a beneficiary ends, the fiduciary 2761
4095	4095		shall pay the beneficiary's share of the undistributed income 2762
4096	4096		that is not disposed of under the terms of the trust to the 2763
4097	4097		beneficiary or, if the beneficiary does not survive the date the 2764
4098	4098		interest ends, to the beneficiary's estate. 2765
4099	4099		(3) If a beneficiary has an unqualified power to withdraw 2766
4100	4100		more than 5 percent of the value of a trust immediately before 2767
4101	4101		an income interest ends: 2768
4102	4102		(a) The fiduciary shall allocate to principal the 2769
4103	4103		undistributed income from the portion of the trust which may be 2770
4104	4104		withdrawn; and 2771
4105	4105		(b) Subsection (2) applies only to the balance of the 2772
4106	4106		undistributed income. 2773
4107	4107		(4) When a fiduciary's obligation to pay a fixed ann uity 2774
4108	4108		or a fixed fraction of the value of assets ends, the fiduciary 2775
4109		-	~~ENROLLED~~
4110		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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4117	4117		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
4118	4118
4119	4119
4120	4120
4121	4121		shall prorate the final payment as required to preserve income 2776
4122	4122		tax, gift tax, estate tax, or other tax benefits. 2777
4123	4123		Section 49. Section 738.801, Florida Statutes, is amended 2778
4124	4124		to read: 2779
4125	4125		(Substantial rewording of section. See 2780
4126	4126		s. 738.801, F.S., for present text.) 2781
4127	4127		738.801 Uniformity of application and construction. —In 2782
4128	4128		applying and construing this act, consideration shall be given 2783
4129	4129		to the need to promote uniformity of the law with respect t o its 2784
4130	4130		subject matter among states that enact it. 2785
4131	4131		Section 50. Section 738.802, Florida Statutes, is amended 2786
4132	4132		to read: 2787
4133	4133		(Substantial rewording of section. See 2788
4134	4134		s. 738.802, F.S., for present text.) 2789
4135	4135		738.802 Relation to Electronic Signatures in Global and 2790
4136	4136		National Commerce Act. —This chapter modifies, limits, or 2791
4137	4137		supersedes the Electronic Signatures in Global and National 2792
4138	4138		Commerce Act, 15 U.S.C. ss. 7001 et seq., but does not modify, 2793
4139	4139		limit, or supersede section 101(c) of that act, 15 U.S.C. s. 2794
4140	4140		7001(c), or authorize electronic delivery of any of the notices 2795
4141	4141		described in s. 103(b) of that act, 15 U.S.C. s. 7003(b). This 2796
4142	4142		chapter does not modify, limit, or supersede s. 117.285. 2797
4143	4143		Section 51. Section 738.803, Florida Statutes, is amended 2798
4144	4144		to read: 2799
4145	4145		738.803 Severability.—If any provision of this chapter or 2800
4146		-	~~ENROLLED~~
4147		-	CS/HB 1093, Engrossed 1 2024 ~~Legislature~~
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	4150	+
	4151	+	CODING: Words stricken are deletions; words underlined are additions.
	4152	+	hb1093-02-e1
4153	4153		Page 113 of 113
4154	4154		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
4155	4155
4156	4156
4157	4157
4158	4158		its application to any person or circumstance is held invalid, 2801
4159	4159		the invalidity does shall not affect other provisions or 2802
4160	4160		applications of this chapter which can be given effect without 2803
4161	4161		the invalid provision or appl ication, and to this end the 2804
4162	4162		provisions of this chapter are severable. 2805
4163	4163		Section 52. Section 738.804, Florida Statutes, is amended 2806
4164	4164		to read: 2807
4165	4165		738.804 Application. —Except as provided in the terms of 2808
4166	4166		the trust instrument, the will, or this chapter, this ch apter 2809
4167	4167		shall apply to any receipt or expense received or incurred and 2810
4168	4168		any disbursement made after January 1, 2025 January 1, 2003, by 2811
4169	4169		any trust or decedent's estate, whether established before or 2812
4170	4170		after January 1, 2025 January 1, 2003, and whether the asset 2813
4171	4171		involved was acquired by the trustee or personal representative 2814
4172	4172		before or after January 1, 2025 January 1, 2003. Receipts or 2815
4173	4173		expenses received or incurred and disbursements made before 2816
4174	4174		January 1, 2025, must January 1, 2003, shall be governed by the 2817
4175	4175		law of this state in effect at the time of the event, except as 2818
4176	4176		otherwise expressly provided in the will or terms of the trust 2819
4177	4177		or in this chapter. 2820
4178	4178		Section 53. This act shall take effect January 1, 2025. 2821