Bill Text: FL H0501 | 2010 | Regular Session | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Estates and Trusts
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2010-04-27 - Placed on Special Order Calendar; Substituted CS/CS/SB 926; Laid on Table, companion bill(s) passed, see CS/CS/SB 926 (Ch. 2010-172) -HJ 01166 [H0501 Detail]
Download: Florida-2010-H0501-Comm_Sub.html
Bill Title: Estates and Trusts
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2010-04-27 - Placed on Special Order Calendar; Substituted CS/CS/SB 926; Laid on Table, companion bill(s) passed, see CS/CS/SB 926 (Ch. 2010-172) -HJ 01166 [H0501 Detail]
Download: Florida-2010-H0501-Comm_Sub.html
CS/HB 501 |
1 | |
2 | An act relating to estates and trusts; amending s. |
3 | 518.112, F.S.; providing additional delegable investment |
4 | functions for fiduciaries relating to life insurance |
5 | contract administration; revising notice requirements and |
6 | criteria for delegation by a fiduciary of investment |
7 | functions to an investment agent; creating s. 736.0902, |
8 | F.S.; specifying certain activities trustees are under no |
9 | duty to undertake relating to administration of certain |
10 | contracts for life insurance; specifying absence of |
11 | liability of trustees to trust beneficiaries for certain |
12 | losses; specifying criteria for application of certain |
13 | provisions; providing for certain notice requirements; |
14 | specifying nonapplication to certain contracts of life |
15 | insurance; providing definitions; providing for |
16 | nonapplication of certain delegable investment functions |
17 | by a trustee under certain circumstances; providing an |
18 | effective date. |
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20 | Be It Enacted by the Legislature of the State of Florida: |
21 | |
22 | Section 1. Paragraph (b) of subsection (2) and paragraph |
23 | (b) of subsection (3) of section 518.112, Florida Statutes, are |
24 | amended to read: |
25 | 518.112 Delegation of investment functions.- |
26 | (2) |
27 | (b) The delegable investment functions under this |
28 | subsection include: |
29 | 1. A determination of whether any insurance contract is or |
30 | remains a proper investment; |
31 | 2. A determination of whether or not to exercise any |
32 | policy option available under any insurance |
33 | 3. A determination of whether or not to diversify such |
34 | contracts relative to one another or to other assets, if any, |
35 | administered by the fiduciary; |
36 | 4. An inquiry about changes in the health or financial |
37 | condition of the insured or insureds relative to any such |
38 | contract; |
39 | 5. A determination of whether the insurance contract was |
40 | procured or effected in compliance with s. 627.404; or |
41 | 6. An investigation of the financial strength of the life |
42 | insurance company. |
43 | (3) A fiduciary may delegate investment functions to an |
44 | investment agent under subsection (1) or subsection (2), if: |
45 | (b) In the case of a trust or estate, the fiduciary has |
46 | given written notice, of its intention to begin delegating |
47 | investment functions under this section, to all beneficiaries, |
48 | or their legal representative, eligible to receive distributions |
49 | from the trust or estate within 30 days of the delegation unless |
50 | such notice is waived by the eligible beneficiaries entitled to |
51 | receive such notice. This notice shall thereafter, until or |
52 | unless the beneficiaries eligible to receive income from the |
53 | trust or distributions from the estate at the time are notified |
54 | to the contrary, authorize the trustee or legal representative |
55 | to delegate investment functions pursuant to this subsection. |
56 | This discretion to revoke the delegation does not imply under |
57 | subsection (2) any continuing obligation to review the agent's |
58 | actions. |
59 | 1. Notice to beneficiaries eligible to receive |
60 | distributions from the trust from the estate, or their legal |
61 | representatives shall be sufficient notice to all persons who |
62 | may join the eligible class of beneficiaries in the future. |
63 | 2. Additionally, as used herein, legal representative |
64 | includes one described in s. 731.303, without any requirement of |
65 | a court order, an attorney-in-fact under a durable power of |
66 | attorney sufficient to grant such authority, a legally appointed |
67 | guardian, or equivalent under applicable law, any living, |
68 | natural guardian of a minor child, or a guardian ad litem. |
69 | 3. Written notice shall be given as provided in part III |
70 | of chapter 731 as to an estate and as provided in s. 736.0109 |
71 | and part III of chapter 736 as to a trust. |
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87 | Section 2. Section 736.0902, Florida Statutes, is created |
88 | to read: |
89 | 736.0902 Nonapplication of prudent investor rule.- |
90 | (1) Notwithstanding the provisions of s. 518.11 or s. |
91 | 736.0804, with respect to any contract of life insurance |
92 | acquired or retained on the life of a qualified person, a |
93 | trustee has no duty to: |
94 | (a) Determine whether the contract of life insurance is or |
95 | was procured or effected in compliance with s. 627.404; |
96 | (b) Determine whether any contract of life insurance is or |
97 | remains a proper investment; |
98 | (c) Investigate the financial strength of the life |
99 | insurance company; |
100 | (d) Determine whether to exercise any policy option |
101 | available under the contract of life insurance; |
102 | (e) Diversify any such contract of life insurance or |
103 | diversify the assets of the trust with respect to the contract |
104 | of life insurance; or |
105 | (f) Inquire about or investigate the health or financial |
106 | condition of any insured or insureds. |
107 | (2) As used in this section, the term "qualified person" |
108 | means a person who is insured or is a proposed insured, or the |
109 | spouse of that person, who has provided the trustee with the |
110 | funds that are used to acquire or pay premiums with respect to a |
111 | policy of insurance on the life of that person or the spouse of |
112 | that person, or on the lives of that person and the spouse of |
113 | that person. |
114 | (3) In all cases in which this section applies, the |
115 | trustee is not liable to the beneficiaries of the trust or any |
116 | other person for any loss sustained with respect to such |
117 | contract of life insurance. |
118 | (4) Unless otherwise provided in the trust instrument, |
119 | paragraph (1)(a) applies to any contract of life insurance on |
120 | the life of a qualified person. |
121 | (5) Unless otherwise provided in the trust instrument, |
122 | paragraphs (1)(b)-(f) apply if: |
123 | (a) The trust instrument, by reference to this section, |
124 | makes this section applicable to contracts of life insurance |
125 | held by the trust; or |
126 | (b) The trustee has provided notice that this section |
127 | applies to a contract of life insurance held by the trust. For |
128 | any notice provided under this paragraph: |
129 | 1. The notice shall be given to the qualified |
130 | beneficiaries and shall contain a copy or restatement of this |
131 | section. |
132 | 2. A notice given to a person who represents the interests |
133 | of any of the persons set forth in subparagraph 1., pursuant to |
134 | any of the provisions of part III of this chapter, shall be |
135 | treated as notice to the person so represented. |
136 | 3. The notice shall be provided pursuant to s. 736.0109. |
137 | 4. If any person notified pursuant to this paragraph |
138 | objects to the application of this section in a writing |
139 | delivered to the trustee within 30 days after the date such |
140 | notice was received, paragraphs (1)(b)-(f) shall not apply until |
141 | the objection is withdrawn. |
142 | 5. There is a rebuttable presumption that any notice sent |
143 | by United States mail is received 3 days after placing the |
144 | notice in the United States mail with proper postage paid. |
145 | (6) This section does not apply to any contract of life |
146 | insurance purchased from any affiliate of the trustee or with |
147 | respect to which the trustee or any affiliate of the trustee |
148 | receives any commission unless the trustee's duties have been |
149 | delegated to another person in accordance with s. 518.112. For |
150 | purposes of this subsection, the term "affiliate" of the trustee |
151 | means any person who controls, is controlled by, or is under |
152 | common control with the trustee. |
153 | (7) Paragraph (1)(a) shall not apply if the trustee |
154 | applied for or accepted ownership of a contract of life |
155 | insurance and the trustee had knowledge that: |
156 | (a) The benefits were not payable to a person specified in |
157 | s. 627.404 when the contract of life insurance was issued; or |
158 | (b) The contract of life insurance is or was purchased |
159 | with resources or guarantees directly or indirectly provided by |
160 | a person who, at the time of the inception of the contract of |
161 | life insurance, did not have an insurable interest in the |
162 | insured as defined by s. 627.404, and, at the time of the |
163 | inception of the contract of life insurance, there is a verbal |
164 | or written arrangement, agreement, or plan with a third party to |
165 | transfer ownership of the policy or policy benefits in a manner |
166 | that would be in violation of the laws of this state. |
167 | Section 3. This act shall take effect upon becoming a law. |
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