SB 954 — Attorney Compensation

736.1007 Trustee’s attorney fees.— (1)(a) Except as provided in paragraph (d), if the trustee of a revocable trust retains an attorney to render legal services in connection with the initial administration of the trust, the attorney is entitled to reasonable compensation for those legal services, payable from the assets of the trust, subject to s.

(b) An(2) Unless attorneyotherwise representingagreed, acompensation trusteebased inon the initialvalue administration of the trust whoassets intendsimmediately tofollowing chargethe asettlor’s feedeath basedand upon the scheduleincome setearned forthby inthe subsectiontrust (2)during shallinitial makeadministration at the followingrate disclosuresof in75 writingpercent toof the trustee:schedule provided in s.

1. There733.6171(3)(a)-(h) is notpresumed ato mandatorybe statutoryreasonable attorneytotal feecompensation for ordinary services of all attorneys employed generally to advise a trustee concerning the trustee’s duties in initial trust administration.

2. The(3) An attorney feewho is notretained required to berender basedonly onlimited theand sizespecifically ofdefined thelegal trust,services andshall thebe presumedcompensated reasonableas fee provided in subsectionthe (2)retaining mayagreement. not be appropriate in all trust administrations.

3. The fee is subject to negotiation between the trustee and the attorney.

4. The selection of the attorney is made at the discretion of the trustee, who is not required to select the attorney who prepared the trust.

5. The trustee shall be entitled to a summary of ordinary and extraordinary services rendered for the fees agreed upon at the conclusion of the representation.

The summary shall be provided by counsel and shall consist of the total hours devoted to the representation or a detailed summary of the services performed during the representation.

(c) The attorney shall obtain the trustee’s timely signature acknowledging the disclosures.

(d) If the attorney does not make the disclosures required by this section, the attorney may not be paid for legal services without prior court approval of the fees or the written consent of the trustee and all qualified beneficiaries.

(2) Unless otherwise agreed and subject to subsection (1), compensation based on the value of the trust assets immediately following the settlor’s death and the income earned by the trust during initial administration at the rate of 75 percent of the schedule provided in s.

733.6171(3)(a)-(h) is presumed to be reasonable total compensation for ordinary services of all attorneys employed generally to advise a trustee concerning the trustee’s duties in the initial trust administration.

(3) Subject to subsection (1), an attorney who is retained to render only limited and specifically defined legal services shall be compensated as provided in the retaining agreement.

(5) Subject(4) Ordinary toservices subsectionof (1),the attorney in additionan toinitial thetrust attorney’sadministration feesinclude forlegal ordinaryadvice services,and therepresentation attorneyconcerning for the trusteetrustee’s shallduties berelating allowedto: further reasonable compensation for any extraordinary service.

What(a) Review constitutesof anthe extraordinarytrust serviceinstrument mayand varyeach dependingamendment onfor manylegal factors,sufficiency including the size and complexityinterpretation. of the trust.

(b) Implementation of substitution of the successor trustee.

(c) Persons who must or should be served with required notices and the method and timing of such service.

(d) The obligation of a successor to require a former trustee to provide an accounting.

(e) The trustee’s duty to protect, insure, and manage trust assets and the trustee’s liability relating to these duties.

(f) The trustee’s duty regarding investments imposed by the prudent investor rule.

(g) The trustee’s obligation to inform and account to beneficiaries and the method of satisfaction of such obligations, the liability of the trust and trustee to the settlor’s creditors, and the advisability or necessity for probate proceedings to bar creditors.

(h) Contributions due to the personal representative of the settlor’s estate for payment of expenses of administration and obligations of the settlor’s estate.

(i) Identifying tax returns required to be filed by the trustee, the trustee’s liability for payment of taxes, and the due date of returns.

(j) Filing a nontaxable affidavit, if not filed by a personal representative.

(k) Order of payment of expenses of administration of the trust and order and priority of abatement of trust distributions.

(l) Distribution of income or principal to beneficiaries or funding of further trusts provided in the governing instrument.

(m) Preparation of any legal documents required to effect distribution.

(n) Fiduciary duties, avoidance of self-dealing, conflicts of interest, duty of impartiality, and obligations to beneficiaries.

(o) If there is a conflict of interest between a trustee who is a beneficiary and other beneficiaries of the trust, advice to the trustee on limitations of certain authority of the trustee regarding discretionary distributions or exercise of certain powers and alternatives for appointment of an independent trustee and appropriate procedures.

(p) Procedures for the trustee’s discharge from liability for administration of the trust on termination or resignation.

(5) In addition to the attorney’s fees for ordinary services, the attorney for the trustee shall be allowed further reasonable compensation for any extraordinary service.

What constitutes an extraordinary service may vary depending on many factors, including the size of the trust.

(i) Any(a) The agreementpromptness, relatingefficiency, to the attorney’s compensation and whetherskill writtenwith disclosureswhich were made to the trusteeinitial inadministration awas timelyhandled mannerby under the circumstancesattorney. pursuant to paragraph (1)(b).

Section(b) The 3. Thisresponsibilities actassumed appliesby, to initial estate and initialpotential trustliabilities administrationsof, commencedthe onattorney. or after October 1, 2021.

Section(c) The 4. Thisnature actand shallvalue takeof effectthe Octoberassets 1,that 2021.are affected by the decedent’s death.

(d) The benefits or detriments resulting to the trust or the trust’s beneficiaries from the attorney’s services.

(e) The complexity or simplicity of the administration and the novelty of issues presented.

(f) The attorney’s participation in tax planning for the estate, the trust, and the trust’s beneficiaries and tax return preparation or review and approval.

(g) The nature of the trust assets, the expenses of administration, and the claims payable by the trust and the compensation paid to other professionals and fiduciaries.

(h) Any delay in payment of the compensation after the services were furnished.

(i) Any other relevant factors.

(2)(7) If a separate written agreement regarding compensation exists between the attorney and the settlor, the attorney must shall furnish a copy to the trustee prior to commencement of employment and, if employed, must shall promptly file and serve a copy on all interested persons.

A separate agreement or a provision in the trust suggesting or directing the trustee to retain a specific attorney does not obligate the trustee to employ the attorney or obligate the attorney to accept the representation but, if the attorney who is a party to the agreement or who drafted the trust is employed, the compensation paid may shall not exceed the compensation provided in the agreement.

(8) As used in this section, the term “initial trust administration” means administration of a revocable trust during the period that begins with the death of the settlor and ends on the final distribution of trust assets outright or to continuing trusts created under the trust agreement but, if an estate tax return is required, not until after issuance of an estate tax closing letter or other evidence of termination of the estate tax proceeding.

This initial period is not intended to include continued regular administration of the trust.

Section 3. Subsection (4) of section 733.106, Florida Statutes, is amended to read:

733.106 Costs and attorney fees.— (4) If costs and attorney fees are to be paid from the estate under this section, s.

733.6171(4), s.

736.1005, or s.

736.1006, the court, in its discretion, may direct from what part of the estate they shall be paid.

(a) If the court directs an assessment against a person’s part of the estate and such part is insufficient to fully pay the assessment, the court may direct payment from the person’s part of a trust, if any, if a pour-over will is involved and the matter is interrelated with the trust.

(b) All or any part of the costs and attorney fees to be paid from the estate may be assessed against one or more persons’ part of the estate in such proportions as the court finds to be just and proper.

(c) In the exercise of its discretion, the court may consider the following factors:

1. The relative impact of an assessment on the estimated value of each person’s part of the estate.

2. The amount of costs and attorney fees to be assessed against a person’s part of the estate.

3. The extent to which a person whose part of the estate is to be assessed, individually or through counsel, actively participated in the proceeding.

4. The potential benefit or detriment to a person’s part of the estate expected from the outcome of the proceeding.

5. The relative strength or weakness of the merits of the claims, defenses, or objections, if any, asserted by a person whose part of the estate is to be assessed.

6. Whether a person whose part of the estate is to be assessed was a prevailing party with respect to one or more claims, defenses, or objections.

7. Whether a person whose part of the estate is to be assessed unjustly caused an increase in the amount of costs and attorney fees incurred by the personal representative or another interested person in connection with the proceeding.

8. Any other relevant fact, circumstance, or equity.

(d) The court may assess a person’s part of the estate without finding that the person engaged in bad faith, wrongdoing, or frivolousness.

Section 4. Subsection (2) of section 736.1005, Florida Statutes, is amended to read:

736.1005 Attorney fees for services to the trust.— (2) If attorney fees are to be paid from the trust under subsection (1), s.

736.1007(5)(a), or s.

733.106(4)(a), the court, in its discretion, may direct from what part of the trust the fees shall be paid.

(a) All or any part of the attorney fees to be paid from the trust may be assessed against one or more persons’ part of the trust in such proportions as the court finds to be just and proper.

(b) In the exercise of its discretion, the court may consider the following factors:

1. The relative impact of an assessment on the estimated value of each person’s part of the trust.

2. The amount of attorney fees to be assessed against a person’s part of the trust.

3. The extent to which a person whose part of the trust is to be assessed, individually or through counsel, actively participated in the proceeding.

4. The potential benefit or detriment to a person’s part of the trust expected from the outcome of the proceeding.

5. The relative strength or weakness of the merits of the claims, defenses, or objections, if any, asserted by a person whose part of the trust is to be assessed.

6. Whether a person whose part of the trust is to be assessed was a prevailing party with respect to one or more claims, defenses, or objections.

7. Whether a person whose part of the trust is to be assessed unjustly caused an increase in the amount of attorney fees incurred by the trustee or another person in connection with the proceeding.

8. Any other relevant fact, circumstance, or equity.

(c) The court may assess a person’s part of the trust without finding that the person engaged in bad faith, wrongdoing, or frivolousness.

Section 5. This act shall take effect July 1, 2021.