Bill Text: FL S0926 | 2010 | Regular Session | Enrolled

---

Bill Title: Trusts [CPSC]

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2010-06-01 - Approved by Governor; Chapter No. 2010-172 [S0926 Detail]

Download: Florida-2010-S0926-Enrolled.html

---

 
ENROLLED 
2010 Legislature                            CS for CS for SB 926 
2010926er 
1 
2         An act relating to trusts; creating s. 736.0902, F.S.; 
3         limiting the duties and liability of certain trustees 
4         with respect to contracts for life insurance; defining 
5         the term “qualified person”; providing for the 
6         application and nonapplication of certain provisions 
7         of state law; requiring that notice of such provisions 
8         be given under certain circumstances; providing 
9         requirements for such notice; providing that such 
10         provisions do not apply if a party notified of the 
11         application of certain provisions of state law objects 
12         in writing; creating a rebuttable presumption of 
13         delivery of notice; defining the term “affiliate” for 
14         specified purposes; providing that certain provisions 
15         of state law do not apply under specified 
16         circumstances; prohibiting the compensation of a 
17         trustee for the performance of certain activities; 
18         amending s. 518.112, F.S.; expanding the list of 
19         delegable investment functions for certain 
20         fiduciaries; revising requirements for the provision 
21         of written notice by a trustee of an intent to begin 
22         delegating investment functions; providing an 
23         effective date. 
24 
25  Be It Enacted by the Legislature of the State of Florida: 
26 
27         Section 1. Section 736.0902, Florida Statutes, is created 
28  to read: 
29         736.0902 Nonapplication of prudent investor rule.— 
30         (1) Notwithstanding the provisions of s. 518.11 or s. 
31  736.0804, with respect to any contract for life insurance 
32  acquired or retained on the life of a qualified person, a 
33  trustee has no duty to: 
34         (a) Determine whether the contract of life insurance is or 
35  was procured or effected in compliance with s. 627.404; 
36         (b) Determine whether any contract of life insurance is, or 
37  remains, a proper investment; 
38         (c) Investigate the financial strength of the life 
39  insurance company; 
40         (d) Determine whether to exercise any policy option 
41  available under the contract for life insurance; 
42         (e) Diversify any such contract for life insurance or the 
43  assets of the trust with respect to the contract for life 
44  insurance; or 
45         (f) Inquire about or investigate the health or financial 
46  condition of any insureds. 
47         (2) For purposes of this section, a “qualified person” is a 
48  person who is insured or a proposed insured, or the spouse of 
49  that person, who has provided the trustee with the funds used to 
50  acquire or pay premiums with respect to a policy of insurance on 
51  the life of that person or the spouse of that person, or on the 
52  lives of that person and the spouse of that person. 
53         (3) The trustee is not liable to the beneficiaries of the 
54  trust or any other person for any loss sustained with respect to 
55  a contract for life insurance to which this section applies. 
56         (4) Unless otherwise provided in the trust instrument, 
57  paragraph (1)(a) applies to any contract for life insurance on 
58  the life of a qualified person. 
59         (5) Unless otherwise provided in the trust instrument, 
60  paragraphs (1)(b)-(f) apply if: 
61         (a) The trust instrument, by reference to this section, 
62  makes this section applicable to contracts for life insurance 
63  held by the trust; or 
64         (b) The trustee gives notice that this section applies to a 
65  contract for life insurance held by the trust. 
66         1. The notice of the application of this section shall be 
67  given to the qualified beneficiaries and shall contain a copy or 
68  restatement of this section. 
69         2. Notice given pursuant to any of the provisions of part 
70  III of this chapter to a person who represents the interests of 
71  any of the persons set forth in subparagraph 1. shall be treated 
72  as notice to the person so represented. 
73         3. Notice shall be given in the manner provided in s. 
74  736.0109. 
75         4. If any person notified pursuant to this paragraph 
76  delivers a written objection to the application of this section 
77  to the trustee within 30 days after the date on which the 
78  objector received such notice, paragraphs (1)(b)-(f) shall not 
79  apply until the objection is withdrawn. 
80         5. There shall exist a rebuttable presumption that any 
81  notice sent by United States mail is received 3 days after 
82  depositing the notice in the United States mail system with 
83  proper postage prepaid. 
84         (6) This section does not apply to any contract for life 
85  insurance purchased from any affiliate of the trustee, or with 
86  respect to which the trustee or any affiliate of the trustee 
87  receives any commission unless the duties have been delegated to 
88  another person in accordance with s. 518.112. For purposes of 
89  this subsection, an “affiliate” is any person who controls, is 
90  controlled by, or is under common control with the trustee. 
91         (7) Paragraph (1)(a) does not apply if the trustee applied 
92  for or accepted ownership of a contract of life insurance and 
93  the trustee had knowledge that: 
94         (a) The benefits were not payable to a person specified in 
95  s. 627.404 when the contract of life insurance was issued; or 
96         (b) The contract of life insurance is or was purchased with 
97  resources or guarantees directly or indirectly provided by a 
98  person who, at the time of the inception of such contract, did 
99  not have an insurable interest in the insured as defined by s. 
100  627.404, and, at the time of the inception of such contract, 
101  there is a verbal or written arrangement, agreement, or plan 
102  with a third party to transfer ownership of the policy or policy 
103  benefits in a manner that would be in violation of state law. 
104         (8) A trustee who performs fiduciary or advisory services 
105  related to a policy of life insurance to which subsection (1) 
106  applies shall not be compensated for performing the applicable 
107  service to which subsection (1) applies. 
108         Section 2. Paragraph (b) of subsection (2) and paragraph 
109  (b) of subsection (3) of section 518.112, Florida Statutes, are 
110  amended to read: 
111         518.112 Delegation of investment functions.— 
112         (2) 
113         (b) The delegable investment functions under this 
114  subsection include: 
115         1. A determination of whether the insurance contract was 
116  procured or effected in compliance with s. 627.404; 
117         2.1. A determination of whether any insurance contract is 
118  or remains a proper investment; 
119         3. The investigation of the financial strength of the life 
120  insurance company; 
121         4.2. A determination of whether or not to exercise any 
122  policy option available under any insurance such contracts; 
123         5.3. A determination of whether or not to diversify such 
124  contracts relative to one another or to other assets, if any, 
125  administered by the fiduciary; or 
126         6.4. An inquiry about changes in the health or financial 
127  condition of the insured or insureds relative to any such 
128  contract. 
129         (3) A fiduciary may delegate investment functions to an 
130  investment agent under subsection (1) or subsection (2), if: 
131         (b) In the case of a trust or estate, the fiduciary has 
132  given written notice, of its intention to begin delegating 
133  investment functions under this section, to all beneficiaries, 
134  or their legal representative, eligible to receive distributions 
135  from the trust or estate within 30 days of the delegation unless 
136  such notice is waived by the eligible beneficiaries entitled to 
137  receive such notice. This notice shall thereafter, until or 
138  unless the beneficiaries eligible to receive income from the 
139  trust or distributions from the estate at the time are notified 
140  to the contrary, authorize the trustee or legal representative 
141  to delegate investment functions pursuant to this subsection. 
142  This discretion to revoke the delegation does not imply under 
143  subsection (2) any continuing obligation to review the agent’s 
144  actions. 
145         1. Notice to beneficiaries eligible to receive 
146  distributions from the trust from the estate, or their legal 
147  representatives shall be sufficient notice to all persons who 
148  may join the eligible class of beneficiaries in the future. 
149         2. Additionally, as used herein, legal representative 
150  includes one described in s. 731.303, without any requirement of 
151  a court order, an attorney-in-fact under a durable power of 
152  attorney sufficient to grant such authority, a legally appointed 
153  guardian, or equivalent under applicable law, any living, 
154  natural guardian of a minor child, or a guardian ad litem. 
155         3. Written notice shall be given as provided in part III of 
156  chapter 731 as to an estate, and as provided in s. 736.0109 and 
157  part III of chapter 736 as to a trust.: 
158         a. By any form of mail or by any commercial delivery 
159  service, approved for service of process by the chief judge of 
160  the judicial circuit in which the trust has its principal place 
161  of business at the date of notice, requiring a signed receipt; 
162         b. As provided by law for service of process; or 
163         c. By an elisor as may be provided in the Florida Rules of 
164  Civil Procedure. 
165 
166  Notice by mail or by approved commercial delivery service is 
167  complete on receipt of notice. Proof of notice must be by 
168  verified statement of the person mailing or sending notice, and 
169  there must be attached thereto the signed receipt or other 
170  satisfactory evidence that delivery was effected on the 
171  addressee or on the addressee’s agent. Proof of notice must be 
172  maintained among the trustee’s permanent records. 
173         Section 3. This act shall take effect July 1, 2010.