Bill Text: FL S1276 | 2019 | Regular Session | Introduced
Bill Title: Attorney Compensation
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2019-05-03 - Died in Judiciary [S1276 Detail]
Download: Florida-2019-S1276-Introduced.html
Florida Senate - 2019 SB 1276 By Senator Bean 4-00664C-19 20191276__ 1 A bill to be entitled 2 An act relating to attorney compensation; amending s. 3 733.6171, F.S.; requiring an attorney who accepts 4 certain engagements to obtain a fee disclosure 5 statement signed by the person responsible for 6 administering an estate; requiring such disclosure 7 statement to contain certain statements; deleting 8 provisions relating to the determination of reasonable 9 compensation for attorneys of personal 10 representatives; deleting provisions relating to 11 petitions to increase or decrease compensation for 12 such attorneys; amending s. 736.1007, F.S.; deleting 13 provisions relating to the determination of reasonable 14 compensation for attorneys of trustees; deleting 15 provisions relating to petitions to increase or 16 decrease compensation for such attorneys; amending ss. 17 733.106 and 736.1005, F.S.; conforming provisions to 18 changes made by the act; providing an effective date. 19 20 Be It Enacted by the Legislature of the State of Florida: 21 22 Section 1. Section 733.6171, Florida Statutes, is amended 23 to read: 24 733.6171 Compensation of attorney for the personal 25 representative.— 26 (1) Attorneys for personal representatives areshall be27 entitled to reasonable compensation payable from the estate 28 assets without court order. An attorney accepting an engagement 29 to represent an estate in probate or other administration must 30 obtain a fee disclosure statement signed by the person 31 responsible for administering the estate. Such statement must 32 specify all of the following: 33 (a) The attorney fee for representing the estate in probate 34 matters is not set by law and is not required to be based on the 35 size of the estate. 36 (b) The fee is subject to negotiation between the personal 37 representative and the attorney. 38 (c) The selection of the attorney to represent the estate 39 is at the discretion of the personal representative and the 40 personal representative is not required to select the attorney 41 who drafted the will. 42(2) The attorney, the personal representative, and persons43bearing the impact of the compensation may agree to compensation44determined in a different manner than provided in this section.45Compensation may also be determined in a different manner than46provided in this section if the manner is disclosed to the47parties bearing the impact of the compensation and if no48objection is made as provided for in the Florida Probate Rules.49(3) Compensation for ordinary services of attorneys in50formal estate administration is presumed to be reasonable if51based on the compensable value of the estate, which is the52inventory value of the probate estate assets and the income53earned by the estate during the administration as provided in54the following schedule:55(a) One thousand five hundred dollars for estates having a56value of $40,000 or less.57(b) An additional $750 for estates having a value of more58than $40,000 and not exceeding $70,000.59(c) An additional $750 for estates having a value of more60than $70,000 and not exceeding $100,000.61(d) For estates having a value in excess of $100,000, at62the rate of 3 percent on the next $900,000.63(e) At the rate of 2.5 percent for all above $1 million and64not exceeding $3 million.65(f) At the rate of 2 percent for all above $3 million and66not exceeding $5 million.67(g) At the rate of 1.5 percent for all above $5 million and68not exceeding $10 million.69(h) At the rate of 1 percent for all above $10 million.70(4) In addition to fees for ordinary services, the attorney71for the personal representative shall be allowed further72reasonable compensation for any extraordinary service. What is73an extraordinary service may vary depending on many factors,74including the size of the estate. Extraordinary services may75include, but are not limited to:76(a) Involvement in a will contest, will construction, a77proceeding for determination of beneficiaries, a contested78claim, elective share proceeding, apportionment of estate taxes,79or any adversarial proceeding or litigation by or against the80estate.81(b) Representation of the personal representative in audit82or any proceeding for adjustment, determination, or collection83of any taxes.84(c) Tax advice on postmortem tax planning, including, but85not limited to, disclaimer, renunciation of fiduciary86commission, alternate valuation date, allocation of87administrative expenses between tax returns, the QTIP or reverse88QTIP election, allocation of GST exemption, qualification for89Internal Revenue Code ss. 6166 and 303 privileges, deduction of90last illness expenses, fiscal year planning, distribution91planning, asset basis considerations, handling income or92deductions in respect of a decedent, valuation discounts,93special use and other valuation, handling employee benefit or94retirement proceeds, prompt assessment request, or request for95release of personal liability for payment of tax.96(d) Review of estate tax return and preparation or review97of other tax returns required to be filed by the personal98representative.99(e) Preparation of the estate’s federal estate tax return.100If this return is prepared by the attorney, a fee of one-half of1011 percent up to a value of $10 million and one-fourth of 1102percent on the value in excess of $10 million of the gross103estate as finally determined for federal estate tax purposes, is104presumed to be reasonable compensation for the attorney for this105service. These fees shall include services for routine audit of106the return, not beyond the examining agent level, if required.107(f) Purchase, sale, lease, or encumbrance of real property108by the personal representative or involvement in zoning, land109use, environmental, or other similar matters.110(g) Legal advice regarding carrying on of the decedent’s111business or conducting other commercial activity by the personal112representative.113(h) Legal advice regarding claims for damage to the114environment or related procedures.115(i) Legal advice regarding homestead status of real116property or proceedings involving that status and services117related to protected homestead.118(j) Involvement in fiduciary, employee, or attorney119compensation disputes.120(k) Proceedings involving ancillary administration of121assets not subject to administration in this state.122(5) Upon petition of any interested person, the court may123increase or decrease the compensation for ordinary services of124the attorney or award compensation for extraordinary services if125the facts and circumstances of the particular administration126warrant. In determining reasonable compensation, the court shall127consider all of the following factors, giving weight to each as128it determines to be appropriate:129(a) The promptness, efficiency, and skill with which the130administration was handled by the attorney.131(b) The responsibilities assumed by and the potential132liabilities of the attorney.133(c) The nature and value of the assets that are affected by134the decedent’s death.135(d) The benefits or detriments resulting to the estate or136interested persons from the attorney’s services.137(e) The complexity or simplicity of the administration and138the novelty of issues presented.139(f) The attorney’s participation in tax planning for the140estate and the estate’s beneficiaries and tax return141preparation, review, or approval.142(g) The nature of the probate, nonprobate, and exempt143assets, the expenses of administration, the liabilities of the144decedent, and the compensation paid to other professionals and145fiduciaries.146(h) Any delay in payment of the compensation after the147services were furnished.148(i) Any other relevant factors.149 (2)(6)If a separate written agreement regarding 150 compensation exists between the attorney and the decedent, the 151 attorney mustshallfurnish a copy to the personal 152 representative prior to commencement of employment, and, if 153 employed, mustshallpromptly file and serve a copy on all 154 interested persons.NeitherA separate agreement ornora 155 provision in the will suggesting or directing that the personal 156 representative retain a specific attorney does notwillobligate 157 the personal representative to employ the attorney or obligate 158 the attorney to accept the representation, but if the attorney 159 who is a party to the agreement or who drafted the will is 160 employed, the compensation paid mayshallnot exceed the 161 compensation provided in the agreement or in the will. 162 Section 2. Section 736.1007, Florida Statutes, is amended 163 to read: 164 736.1007 Trustee’s attorney fees.— 165 (1) If the trustee of a revocable trust retains an attorney 166 to render legal services in connection with the initial 167 administration of the trust, the attorney is entitled to 168 reasonable compensation for those legal services, payable from 169 the assets of the trust, subject to s. 736.0802(10), without 170 court order.The trustee and the attorney may agree to171compensation that is determined in a manner or amount other than172the manner or amount provided in this section. The agreement is173not binding on a person who bears the impact of the compensation174unless that person is a party to or otherwise consents to be175bound by the agreement. The agreement may provide that the176trustee is not individually liable for the attorney fees and177costs.178(2) Unless otherwise agreed, compensation based on the179value of the trust assets immediately following the settlor’s180death and the income earned by the trust during initial181administration at the rate of 75 percent of the schedule182provided in s. 733.6171(3)(a)-(h) is presumed to be reasonable183total compensation for ordinary services of all attorneys184employed generally to advise a trustee concerning the trustee’s185duties in initial trust administration.186(3) An attorney who is retained to render only limited and187specifically defined legal services shall be compensated as188provided in the retaining agreement. If the amount or method of189determining compensation is not provided in the agreement, the190attorney is entitled to a reasonable fee, taking into account191the factors set forth in subsection (6).192(4) Ordinary services of the attorney in an initial trust193administration include legal advice and representation194concerning the trustee’s duties relating to:195(a) Review of the trust instrument and each amendment for196legal sufficiency and interpretation.197(b) Implementation of substitution of the successor198trustee.199(c) Persons who must or should be served with required200notices and the method and timing of such service.201(d) The obligation of a successor to require a former202trustee to provide an accounting.203(e) The trustee’s duty to protect, insure, and manage trust204assets and the trustee’s liability relating to these duties.205(f) The trustee’s duty regarding investments imposed by the206prudent investor rule.207(g) The trustee’s obligation to inform and account to208beneficiaries and the method of satisfaction of such209obligations, the liability of the trust and trustee to the210settlor’s creditors, and the advisability or necessity for211probate proceedings to bar creditors.212(h) Contributions due to the personal representative of the213settlor’s estate for payment of expenses of administration and214obligations of the settlor’s estate.215(i) Identifying tax returns required to be filed by the216trustee, the trustee’s liability for payment of taxes, and the217due date of returns.218(j) Filing a nontaxable affidavit, if not filed by a219personal representative.220(k) Order of payment of expenses of administration of the221trust and order and priority of abatement of trust222distributions.223(l) Distribution of income or principal to beneficiaries or224funding of further trusts provided in the governing instrument.225(m) Preparation of any legal documents required to effect226distribution.227(n) Fiduciary duties, avoidance of self-dealing, conflicts228of interest, duty of impartiality, and obligations to229beneficiaries.230(o) If there is a conflict of interest between a trustee231who is a beneficiary and other beneficiaries of the trust,232advice to the trustee on limitations of certain authority of the233trustee regarding discretionary distributions or exercise of234certain powers and alternatives for appointment of an235independent trustee and appropriate procedures.236(p) Procedures for the trustee’s discharge from liability237for administration of the trust on termination or resignation.238(5) In addition to the attorney’s fees for ordinary239services, the attorney for the trustee shall be allowed further240reasonable compensation for any extraordinary service. What241constitutes an extraordinary service may vary depending on many242factors, including the size of the trust. Extraordinary services243may include, but are not limited to:244(a) Involvement in a trust contest, trust construction, a245proceeding for determination of beneficiaries, a contested246claim, elective share proceedings, apportionment of estate247taxes, or other adversary proceedings or litigation by or248against the trust.249(b) Representation of the trustee in an audit or any250proceeding for adjustment, determination, or collection of any251taxes.252(c) Tax advice on postmortem tax planning, including, but253not limited to, disclaimer, renunciation of fiduciary254commission, alternate valuation date, allocation of255administrative expenses between tax returns, the QTIP or reverse256QTIP election, allocation of GST exemption, qualification for257Internal Revenue Code ss. 303 and 6166 privileges, deduction of258last illness expenses, distribution planning, asset basis259considerations, throwback rules, handling income or deductions260in respect of a decedent, valuation discounts, special use and261other valuation, handling employee benefit or retirement262proceeds, prompt assessment request, or request for release from263personal liability for payment of tax.264(d) Review of an estate tax return and preparation or265review of other tax returns required to be filed by the trustee.266(e) Preparation of decedent’s federal estate tax return. If267this return is prepared by the attorney, a fee of one-half of 1268percent up to a value of $10 million and one-fourth of 1 percent269on the value in excess of $10 million, of the gross estate as270finally determined for federal estate tax purposes, is presumed271to be reasonable compensation for the attorney for this service.272These fees shall include services for routine audit of the273return, not beyond the examining agent level, if required.274(f) Purchase, sale, lease, or encumbrance of real property275by the trustee or involvement in zoning, land use,276environmental, or other similar matters.277(g) Legal advice regarding carrying on of decedent’s278business or conducting other commercial activity by the trustee.279(h) Legal advice regarding claims for damage to the280environment or related procedures.281(i) Legal advice regarding homestead status of trust real282property or proceedings involving the status.283(j) Involvement in fiduciary, employee, or attorney284compensation disputes.285(k) Considerations of special valuation of trust assets,286including discounts for blockage, minority interests, lack of287marketability, and environmental liability.288(6) Upon petition of any interested person in a proceeding289to review the compensation paid or to be paid to the attorney290for the trustee, the court may increase or decrease the291compensation for ordinary services of the attorney for the292trustee or award compensation for extraordinary services if the293facts and circumstances of the particular administration294warrant. In determining reasonable compensation, the court shall295consider all of the following factors giving such weight to each296as the court may determine to be appropriate:297(a) The promptness, efficiency, and skill with which the298initial administration was handled by the attorney.299(b) The responsibilities assumed by, and potential300liabilities of, the attorney.301(c) The nature and value of the assets that are affected by302the decedent’s death.303(d) The benefits or detriments resulting to the trust or304the trust’s beneficiaries from the attorney’s services.305(e) The complexity or simplicity of the administration and306the novelty of issues presented.307(f) The attorney’s participation in tax planning for the308estate, the trust, and the trust’s beneficiaries and tax return309preparation or review and approval.310(g) The nature of the trust assets, the expenses of311administration, and the claims payable by the trust and the312compensation paid to other professionals and fiduciaries.313(h) Any delay in payment of the compensation after the314services were furnished.315(i) Any other relevant factors.316 (2)(7)If a separate written agreement regarding 317 compensation exists between the attorney and the settlor, the 318 attorney mustshallfurnish a copy to the trustee prior to 319 commencement of employment and, if employed, mustshallpromptly 320 file and serve a copy on all interested persons. A separate 321 agreement or a provision in the trust suggesting or directing 322 the trustee to retain a specific attorney does not obligate the 323 trustee to employ the attorney or obligate the attorney to 324 accept the representation but, if the attorney who is a party to 325 the agreement or who drafted the trust is employed, the 326 compensation paid mayshallnot exceed the compensation provided 327 in the agreement. 328(8) Asused in this section, the term “initial trust329administration” means administration of a revocable trust during330the period that begins with the death of the settlor and ends on331the final distribution of trust assets outright or to continuing332trusts created under the trust agreement but, if an estate tax333return is required, not until after issuance of an estate tax334closing letter or other evidence of termination of the estate335tax proceeding. This initial period is not intended to include336continued regular administration of the trust.337 Section 3. Subsection (4) of section 733.106, Florida 338 Statutes, is amended to read: 339 733.106 Costs and attorney fees.— 340 (4) If costs and attorney fees are to be paid from the 341 estate under this section,s. 733.6171(4),s. 736.1005, or s. 342 736.1006, the court, in its discretion, may direct from what 343 part of the estate they shall be paid. 344 (a) If the court directs an assessment against a person’s 345 part of the estate and such part is insufficient to fully pay 346 the assessment, the court may direct payment from the person’s 347 part of a trust, if any, if a pour-over will is involved and the 348 matter is interrelated with the trust. 349 (b) All or any part of the costs and attorney fees to be 350 paid from the estate may be assessed against one or more 351 persons’ part of the estate in such proportions as the court 352 finds to be just and proper. 353 (c) In the exercise of its discretion, the court may 354 consider the following factors: 355 1. The relative impact of an assessment on the estimated 356 value of each person’s part of the estate. 357 2. The amount of costs and attorney fees to be assessed 358 against a person’s part of the estate. 359 3. The extent to which a person whose part of the estate is 360 to be assessed, individually or through counsel, actively 361 participated in the proceeding. 362 4. The potential benefit or detriment to a person’s part of 363 the estate expected from the outcome of the proceeding. 364 5. The relative strength or weakness of the merits of the 365 claims, defenses, or objections, if any, asserted by a person 366 whose part of the estate is to be assessed. 367 6. Whether a person whose part of the estate is to be 368 assessed was a prevailing party with respect to one or more 369 claims, defenses, or objections. 370 7. Whether a person whose part of the estate is to be 371 assessed unjustly caused an increase in the amount of costs and 372 attorney fees incurred by the personal representative or another 373 interested person in connection with the proceeding. 374 8. Any other relevant fact, circumstance, or equity. 375 (d) The court may assess a person’s part of the estate 376 without finding that the person engaged in bad faith, 377 wrongdoing, or frivolousness. 378 Section 4. Subsection (2) of section 736.1005, Florida 379 Statutes, is amended to read: 380 736.1005 Attorney fees for services to the trust.— 381 (2) If attorney fees are to be paid from the trust under 382 subsection (1),s. 736.1007(5)(a),or s. 733.106(4)(a), the 383 court, in its discretion, may direct from what part of the trust 384 the fees shall be paid. 385 (a) All or any part of the attorney fees to be paid from 386 the trust may be assessed against one or more persons’ part of 387 the trust in such proportions as the court finds to be just and 388 proper. 389 (b) In the exercise of its discretion, the court may 390 consider the following factors: 391 1. The relative impact of an assessment on the estimated 392 value of each person’s part of the trust. 393 2. The amount of attorney fees to be assessed against a 394 person’s part of the trust. 395 3. The extent to which a person whose part of the trust is 396 to be assessed, individually or through counsel, actively 397 participated in the proceeding. 398 4. The potential benefit or detriment to a person’s part of 399 the trust expected from the outcome of the proceeding. 400 5. The relative strength or weakness of the merits of the 401 claims, defenses, or objections, if any, asserted by a person 402 whose part of the trust is to be assessed. 403 6. Whether a person whose part of the trust is to be 404 assessed was a prevailing party with respect to one or more 405 claims, defenses, or objections. 406 7. Whether a person whose part of the trust is to be 407 assessed unjustly caused an increase in the amount of attorney 408 fees incurred by the trustee or another person in connection 409 with the proceeding. 410 8. Any other relevant fact, circumstance, or equity. 411 (c) The court may assess a person’s part of the trust 412 without finding that the person engaged in bad faith, 413 wrongdoing, or frivolousness. 414 Section 5. This act shall take effect July 1, 2019.