Florida 2025 Regular Session

Florida House Bill H0385 Compare Versions

Version 1 (Old)

Version 2 (New)

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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
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14	14		A bill to be entitled 1
15	15		An act relating to trusts; amending s. 736.04117, 2
16	16		F.S.; revising the definition of the term "authorized 3
17	17		trustee"; revising how an authorized trustee may 4
18	18		exercise the power to invade principal as an 5
19	19		authorized trustee administering a trust; providing 6
20	20		that notice of such exercise by an authorized trustee 7
21	21		is not a trust disclosure document; providing that a 8
22		-	trust disclosure document ~~will~~ not commence a 9
	22	+	trust disclosure document may not commence a 9
23	23		limitations period unless such trust disclosure 10
24	24		document is provided after the effective date of the 11
25	25		exercise of the power to invade principal by an 12
26	26		authorized trustee; providing applicability; amending 13
27	27		s. 736.08125, F.S.; providing an exception with regard 14
28	28		to protection of successor trustees; creating s. 15
29	29		736.10085, F.S.; barring certain actions initiated by 16
30	30		specified parties against prior trustees; creating s. 17
31	31		736.1110, F.S.; providing that property devised to or 18
32	32		from a revocable trust which is devised, given, or 19
33	33		distributed to a donee by a settlor during the 20
34	34		settlor's lifetime is treated as a satisfaction of 21
35	35		devise to that donee if certain criteria are met; 22
36	36		providing that property distributed or given to a 23
37	37		devisee during a settlor's lifetime is to be valued at 24
38	38		the time the devisee came into possession or enjoyment 25
39	39
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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
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49	49
50	50
51	51		of the property, or at the time of the death of th e 26
52	52		settlor, whichever occurs first; providing 27
53	53		applicability; amending s. 736.1502, F.S.; revising 28
54	54		the definitions of the terms "community property" and 29
55	55		"community property trust"; amending s. 736.151, F.S.; 30
56	56		providing that homestead property transferred by o ne 31
57	57		or both settlor spouses to a community property trust 32
58	58		will not be treated as a change of ownership for the 33
59	59		purposes of reassessing the property; providing that 34
60	60		such transfer qualifies as a change or transfer of 35
61	61		legal or equitable title between spouses; providing 36
62	62		construction and retroactive application; providing an 37
63	63		effective date. 38
64	64		39
65	65		Be It Enacted by the Legislature of the State of Florida: 40
66	66		41
67	67		Section 1. Paragraph (b) of subsection (1), paragraph (a) 42
68	68		of subsection (2), subsection (3), paragraph (a ) of subsection 43
69	69		(4), and paragraph (d) of subsection (8) of section 736.04117, 44
70	70		Florida Statutes, are amended, and subsection (12) is added to 45
71	71		that section, to read: 46
72	72		736.04117 Trustee's power to invade principal in trust. — 47
73	73		(1) DEFINITIONS.—As used in this section, the term: 48
74	74		(b) "Authorized trustee" means a trustee, other than the 49
75	75		settlor or a beneficiary, who has the power to invade the 50
76	76
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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
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86	86
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88	88		principal of a trust. For the purposes of this section, an 51
89	89		authorized trustee will not be considered a settlor of a s econd 52
90	90		trust, even if the authorized trustee created the trust 53
91	91		instrument governing the second trust or made a distribution of 54
92	92		assets from the first trust to the second trust. In determining 55
93	93		settlor intent with respect to a second trust or a modification 56
94	94		of the first trust, the intent of a settlor of the first trust, 57
95		-	a settlor of the second trust, ~~and~~ the authorized trustee may be 58
	95	+	a settlor of the second trust, or the authorized trustee may be 58
96	96		considered. 59
97	97		(2) DISTRIBUTION FROM FIRST TRUST TO SECOND TRUST WHEN 60
98	98		AUTHORIZED TRUSTEE HAS ABSOLUTE POWER TO INVADE. — 61
99	99		(a) Unless a trust instrument expressly provides 62
100	100		otherwise, an authorized trustee who has absolute power under 63
101	101		the terms of the trust to invade its principal, referred to in 64
102	102		this section as the "first trust," to make current distributions 65
103	103		to or for the benefit of o ne or more beneficiaries may instead 66
104	104		exercise such power by modifying the terms of the first trust or 67
105	105		by appointing all or part of the principal of the trust subject 68
106	106		to such power in favor of a trustee of one or more other trusts, 69
107	107		whether created under the same trust instrument as the first 70
108	108		trust or a different trust instrument, including a trust 71
109	109		instrument created for the purposes of exercising the power 72
110	110		granted by this section, each referred to in this section as the 73
111	111		"second trust," for the current benefi t of one or more of such 74
112	112		beneficiaries only if: 75
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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
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125	125		1. The beneficiaries of the second trust include only 76
126	126		beneficiaries of the first trust; and 77
127	127		2. The second trust does not reduce any vested interest. 78
128	128		(3) DISTRIBUTION FROM FIRST TRUST TO SECOND TRUST WHE N 79
129	129		AUTHORIZED TRUSTEE DOES NOT HAVE ABSOLUTE POWER TO INVADE. —80
130	130		Unless the trust instrument expressly provides otherwise, an 81
131	131		authorized trustee who has a power, other than an absolute 82
132	132		power, under the terms of a first trust to invade principal to 83
133	133		make current distributions to or for the benefit of one or more 84
134	134		beneficiaries may instead exercise such power by modifying the 85
135	135		terms of the first trust or by appointing all or part of the 86
136	136		principal of the first trust subject to such power in favor of a 87
137	137		trustee of one or more second trusts. If the authorized trustee 88
138	138		exercises such power: 89
139	139		(a) The second trusts, in the aggregate, must shall grant 90
140	140		each beneficiary of the first trust beneficial interests in the 91
141	141		second trusts which are substantially similar to the benefici al 92
142	142		interests of the beneficiary in the first trust. 93
143	143		(b) If the first trust grants a power of appointment to a 94
144	144		beneficiary of the first trust, the second trust must shall 95
145	145		grant such power of appointment in the second trust to such 96
146	146		beneficiary, and the cla ss of permissible appointees must shall 97
147	147		be the same as in the first trust. 98
148	148		(c) If the first trust does not grant a power of 99
149	149		appointment to a beneficiary of the first trust, the second 100
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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
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162	162		trust may not grant a power of appointment in the second trust 101
163	163		to such beneficiary. 102
164	164		(d) Notwithstanding paragraphs (a), (b), and (c), the term 103
165	165		of the second trust may extend beyond the term of the first 104
166	166		trust, and, for any period after the first trust would have 105
167	167		otherwise terminated, in whole or in part, under the provisions 106
168	168		of the first trust, the trust instrument of the second trust 107
169	169		may, with respect to property subject to such extended term: 108
170	170		1. Include language providing the trustee with the 109
171	171		absolute power to invade the principal of the second trust 110
172	172		during such extended term; and 111
173	173		2. Create a power of appointment, if the power holder is a 112
174	174		current beneficiary of the first trust, or expand the class of 113
175	175		permissible appointees in favor of which a power of appointment 114
176	176		may be exercised. 115
177	177		(4) DISTRIBUTION FROM FIRST TRUST TO SUPPLEMENTAL NEEDS 116
178	178		TRUST.— 117
179	179		(a) Notwithstanding subsections (2) and (3), unless the 118
180	180		trust instrument expressly provides otherwise, an authorized 119
181	181		trustee who has the power under the terms of a first trust to 120
182	182		invade the principal of the first trust to make current 121
183	183		distributions to or for the benefit of a beneficiary with a 122
184	184		disability may instead exercise such power by modifying the 123
185	185		terms of the first trust or by appointing all or part of the 124
186	186		principal of the first trust in favor of a trustee of a se cond 125
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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
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199	199		trust that is a supplemental needs trust if: 126
200	200		1. The supplemental needs trust benefits the beneficiary 127
201	201		with a disability; 128
202	202		2. The beneficiaries of the second trust include only 129
203	203		beneficiaries of the first trust; and 130
204	204		3. The authorized trustee determ ines that the exercise of 131
205	205		such power will further the purposes of the first trust. 132
206	206		(8) NOTICE.— 133
207	207		(d) The authorized trustee's notice under this subsection 134
208	208		is not a trust disclosure document as defined in s. 736.1008(4) 135
209	209		and does not limit the right of an y beneficiary to object to the 136
210	210		exercise of the authorized trustee's power to invade principal 137
211	211		except as otherwise provided in other applicable provisions of 138
212	212		this code. With respect to the exercise of the authorized 139
213		-	trustee's power to invade principal, ~~a tru st~~ disclosure ~~document~~ 140
214		-	will not commence a limitations period unless the trust 141
	213	+	trustee's power to invade principal, such trust disclosure 140
	214	+	document will not commence a limitations period unless the trust 141
215	215		disclosure document is provided after the effective date of the 142
216	216		exercise of such power to invade principal by the authorized 143
217	217		trustee. 144
218	218		(12) APPLICATION.—This section applies to all trusts that 145
219	219		are governed by the laws of this state or that have a principal 146
220	220		place of administration within this state. 147
221	221		Section 2. Subsection (3) of section 736.08125, Florida 148
222	222		Statutes, is amended to read: 149
223	223		736.08125 Protection of successor tr ustees.— 150
224	224
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236	236		(3) Except as provided in s. 736.10085, nothing in this 151
237	237		section does not affect affects any liability of the prior 152
238	238		trustee or the right of the successor trustee or any beneficiary 153
239	239		to pursue an action or claim against the prior trustee. 154
240	240		Section 3. Section 736.10085, Florida Statutes, is created 155
241	241		to read: 156
242	242		736.10085 Claims against former trustees. —An action or 157
243	243		claim by a successor trustee or other person acting on behalf of 158
244	244		the trust against a prior trustee is barred to the same extent 159
245	245		that the action or claim would be barred if brought by the 160
246	246		beneficiary whose interests are represented by the successor 161
247	247		trustee or other person acting on behalf of the trust. 162
248	248		Section 4. Section 736.1110, Florida Statutes, is created 163
249	249		to read: 164
250	250		736.1110 Ademption by satisfaction.— 165
251	251		(1) Property devised to or from a revocable trust which a 166
252	252		settlor gave to a donee during the settlor's lifetime or which 167
253	253		is distributed from a revocable trust to a donee during the 168
254	254		settlor's lifetime is to be treated as a satisfactio n of a 169
255	255		devise to that donee, in whole or in part, upon the settlor's 170
256	256		death, if any of the following circumstances applies: 171
257	257		(a) The trust instrument provides for the deduction of the 172
258	258		lifetime gift or distribution. 173
259	259		(b) The settlor or the trustee of the r evocable trust 174
260	260		declares in a contemporaneous writing that the gift or 175
261	261
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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
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273	273		distribution is to be deducted from the devise or is in 176
274	274		satisfaction of the devise. 177
275	275		(c) The devisee acknowledges in writing that the gift or 178
276	276		distribution is in satisfaction of the devi se. 179
277	277		(2) For purposes of part satisfaction, property 180
278	278		distributed or given during the settlor's lifetime is valued at 181
279	279		the time the devisee came into possession or enjoyment of the 182
280	280		property or at the time of the death of the settlor, whichever 183
281	281		occurs first. 184
282	282		(3) This section applies to revocable trusts that become 185
283	283		irrevocable on or after July 1, 2025. 186
284	284		Section 5. Subsections (1) and (2) of section 736.1502, 187
285	285		Florida Statutes, are amended to read: 188
286	286		736.1502 Definitions. —Unless the context otherwise 189
287	287		requires, as used in this part: 190
288	288		(1) "Community property" means the property and the 191
289	289		appreciation of and income from the property owned by a 192
290	290		qualified trustee of a community property trust during the 193
291	291		marriage of the settlor spouses. The property owned by a 194
292	292		community property trust pursuant to this part and the 195
293	293		appreciation of and income from such property are shall be 196
294	294		deemed to be community property for purposes of general law. 197
295	295		(2) "Community property trust" means an express trust that 198
296	296		complies with s. 736.150 3 and is created, amended, restated, or 199
297	297		modified on or after July 1, 2021. 200
298	298
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310	310		Section 6. Subsection (3) is added to section 736.151, 201
311	311		Florida Statutes, to read: 202
312	312		736.151 Homestead property. — 203
313	313		(3) A transfer of homestead property by one or both of the 204
314	314		settlor spouses to a community property trust will not be 205
315	315		treated as a change of ownership for purposes of reassessing the 206
316	316		property and instead qualifies as a change or transfer of legal 207
317	317		or equitable title between spouses as described in s. 208
318	318		193.155(3)(a)2. 209
319	319		Section 7. The amendments made by this act to ss. 210
320	320		736.04117, 736.1502, and 736.151, Florida Statutes, are remedial 211
321	321		and apply to trusts created before, on, or after the effective 212
322	322		date of this act. 213
323	323		Section 8. This act shall take effect upon becoming a law. 214