SB 1316 — Florida Uniform Fiduciary Income and Principal Act

a voting trust;

a security arrangement;

Section 738.104, Florida Statutes, is amended to Pageread: 19 of 97 CODING:

Page 19 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 read:(Substantial rewording of section.

(Substantial rewording of section.

(a) Act in good faith, based on what is a fair and reasonable fee to all beneficiaries.beneficiaries;

(b) Administer a trust or estate impartially, except to the extent that the terms of the trust manifest an intent that the fiduciary favors one or more beneficiaries.beneficiaries;

(c) Administer the trust or estate in accordance with the Page 20 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (c) Administer the trust or estate in accordance with the terms of the trust, even if there is a different provision in this chapter.

738.301-738.310, or Pageconvert 21a ofunitrust 97to CODING:an income trust under ss.

738.301-738.310 Page 21 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 convertif athe unitrustfiduciary determines the exercise of the power will assist the fiduciary to anadminister incomethe trust underor ss.estate impartially.

738.301-738.310 if the fiduciary determines the exercise of the power will assist the fiduciary to administer the trust or estate impartially.

(l) The identities and circumstances of the beneficiaries.

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (l)(6) TheExcept identitiesas andprovided circumstancesin ofss. the beneficiaries.

(6) Except as provided in ss.

(2) The court may not order a fiduciary to change a Page 23 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (2) The court may not order a fiduciary to change a fiduciary decision unless the court determines that the fiduciary decision was an abuse of the fiduciary’s discretion.

(e) To the extent that the abuse of discretion has resulted Page 24 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (e) To the extent that the abuse of discretion has resulted in a distribution to a beneficiary that is too large, the court shall restore the beneficiaries, the trust, or both, in whole or in part, to their appropriate positions by requiring the fiduciary to withhold an amount from one or more future distributions to the beneficiary who received the distribution that was too large or requiring that beneficiary to return some or all of the distribution to the trust;

(5) If an action is instituted alleging an abuse of discretion in the exercise or nonexercise of the fiduciary’s discretion under this chapter and the court determines no abuse of discretion has occurred, the fiduciary’s costs and attorney fees incurred in defending the action shall be paid from the Pagetrust 25assets. of 97 CODING:

Page 25 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 trustSection assets.9.

Section 9.

(b) The adjustment or determination would change the amount Page 26 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (b) The adjustment or determination would change the amount payable to a beneficiary, as a fixed annuity or a fixed fraction of the value of the trust assets, under the terms of the trust;

(6) If paragraph (5)(d), paragraph (5)(e), paragraph Page(5)(f), 27or ofparagraph 97(5)(g) CODING:applies to a fiduciary:

Page 27 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (5)(f),(a) orA paragraphcofiduciary (5)(g)to applieswhich paragraphs (5)(d)-(g) do not apply may exercise the power to aadjust, fiduciary:unless the exercise of the power by the remaining cofiduciary or cofiduciaries is not permitted by the terms of the trust or law other than this chapter;

(a) A cofiduciary to which paragraphs (5)(d)-(g) do not apply may exercise the power to adjust, unless the exercise of the power by the remaining cofiduciary or cofiduciaries is not permitted by the terms of the trust or law other than this chapter;

(b) Applies to the entire power, unless the release or Page 28 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (b) Applies to the entire power, unless the release or delegation provides a limitation, which may be a limitation to the power to adjust:

In specified circumstances;circumstances.

(12) With respect to a trust in existence on January 1, Page 29 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (12) With respect to a trust in existence on January 1, 2003:

The burden will be on the objecting beneficiaries to prove that the power to adjust would be inequitable, illegal, or otherwise in contravention of the settlor’sgrantor’s intent.

The court may award costs and attorney fees relating to the fiduciary’s petition in the same manner as in Pagechancery 30actions. of 97 CODING:

When costs and attorney fees are to be paid Page 30 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 chanceryout actions.of the trust, the court may, in its discretion, direct from which part of the trust they shall be paid.

When costs and attorney fees are to be paid out of the trust, the court may, in its discretion, direct from which part of the trust they shall be paid.

(f) The objection of a super majority of eligible beneficiaries under this subsection shall be valid for a period of 1 year after the date of the notice set forth in subsection Page 31 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 of 1 year after the date of the notice set forth in subsection (13).

(b) The statement may contain information regarding a fiduciary’s obligation with respect to the power to adjust Pagebetween 32income ofand 97principal CODING:under this section.

Page 32 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 between(c) incomeThe andstatement principalshall underbe thisserved section.informally, in the manner provided in the Florida Rules of Civil Procedure relating to service of pleadings subsequent to the initial pleading.

(c) The statement shall be served informally, in the manner provided in the Florida Rules of Civil Procedure relating to service of pleadings subsequent to the initial pleading.

(a) “Eligible beneficiaries” means:

“Eligible beneficiaries” means:

a.

or 2.b.

(b)2. “Super majority of the eligible beneficiaries” means:

1.“Super majority of the eligible beneficiaries” means:

a.

or 2.b.

736.0103(19)(b), if the interests of the beneficiaries are reasonably ascertainable, otherwise, two-thirds in number of either such Pageclass. 33 of 97 CODING:

Page 33 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 class.(15) A trust exists on January 1, 2003, if it is not revocable on January 1, 2003.

(15) A trust existsis onrevocable Januaryif 1,revocable 2003,by ifthe itgrantor isalone notor revocablein onconjunction Januarywith 1,any 2003.other person.

A trust is not revocable for purposes of this section if revocable by the settlorgrantor aloneonly orwith inthe conjunctionconsent withof anyall otherpersons person.having a beneficial interest in the property.

A trust is not revocable for purposes of this section if revocable by the settlor only with the consent of all persons having a beneficial interest in the property.

(5) “Unitrust” means a trust for which net income is a Page 34 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (5) “Unitrust” means a trust for which net income is a unitrust amount.

Page2. 35 of 97 CODING:

Prohibit conversion to an income trust;

or Page 35 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 2.3.

Prohibit conversion to an income trust;

or 3.

PageSection 3612. of 97 CODING:

Section 738.303, Florida Statutes, is amended Page 36 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 Sectionto 12.read:

Section 738.303, Florida Statutes, is amended to read:

(b) The fiduciary sends a notice in a record to the Page 37 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (b) The fiduciary sends a notice in a record to the qualified beneficiaries determined under ss.

(4) If, after sending a notice under paragraph (2)(b), a Page 38 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (4) If, after sending a notice under paragraph (2)(b), a fiduciary decides not to take the action proposed in the notice, the fiduciary must notify in a record each person described in s.

(b) Each person that is granted a power over the trust by the terms of the trust, to the extent that the power is Page 39 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 the terms of the trust, to the extent that the power is exercisable when the person is not then serving as a trustee:

Page(4) 40A ofnotice 97required CODING:under s.

738.303(2)(b) must include Page 40 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (4)all Aof noticethe requiredfollowing: under s.

738.303(2)(b) must include all of the following:

(a) The unitrust rate or method for determining the Page 41 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (a) The unitrust rate or method for determining the unitrust rate under s.

Page(a) 42A offixed 97unitrust CODING:rate;

or Page 42 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (a)(b)1. A fixed unitrust rate;

or (b)1.

7520(a)(2) of the Internal Revenue Code Pageis 43less ofthan 973 CODING:percent, the unitrust rate is 3 percent.

Page 43 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 isSection less16. than 3 percent, the unitrust rate is 3 percent.

Section 16.

(3) The following property may not be included in Page 44 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (3) The following property may not be included in determining the value of the trust:

Page1. 45 of 97 CODING:

The trust was not in existence in a preceding period;

or Page 45 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 1.2.

The trust was not in existence in a preceding period;

or 2.

(6) An express unitrust may provide a mechanism for changing the unitrust rate, similar to the mechanism provided Pageunder 46s. of 97 CODING:

738.306, based upon the factors noted in that section, Page 46 of 97 CODING:

Florida Senate - 2024 CS for CSSB 1316 590-02905-24 20241316c1 and may provide for SBa 1316conversion 595-03345-24from 20241316c2a unitrust to an income trust or a reconversion of an income trust to a unitrust under s.

738.306, based upon the factors noted in that section, and may provide for a conversion from a unitrust to an income trust or a reconversion of an income trust to a unitrust under s.

(10) The governing instrument of an express unitrust may provide that the trustee may exclude assets used by the unitrust’s beneficiary, including, but not limited to, a residence property or tangible personal property, from the net fair market value of the unitrust’s assets for the purposes of Page 47 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 fair market value of the unitrust’s assets for the purposes of computing the unitrust amount.

Means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization or arrangement in which a fiduciary owns or holds has an interest, regardless of whether the entity is a taxpayer for federal Page 48 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 regardless of whether the entity is a taxpayer for federal income tax purposes;

(4)(3) Except as otherwise provided in this section, A fiduciary shall allocate the following receipts from an entity Page 49 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 fiduciary shall allocate the following receipts from an entity to principal:

The amount to be allocated to principal must be reduced to the extent that the cumulative distributions from the entity to the trust or estate allocated to income do not exceed a cumulative annual return of 3 percent of the fair market value of the interest in the entity at the beginning of each year or portion of a year for the number of years or portion of years in the period that Pagethe 50interest ofin 97the CODING:entity has been held by the trust or estate.

Page 50 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 theIf interesta intrustee the entity has beenexercised helda bypower theto trustadjust orunder estate.s.

If a trustee has exercised a power to adjust under s.

or (b) To the extent that the total amount of money and property received by the fiduciary in the entity in a distribution or a series of related entity distributions is or will be greater than from an entity that is not listed on a public stock exchange exceeds 20 percent of the fiduciary’s trust’s or estate’s pro rata share of the entity’s gross assets, as shown by the entity’s year-end financial statements Page 51 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 as shown by the entity’s year-end financial statements immediately preceding the initial receipt.

738.1041, the trustee, in determining the total income distributions from the entity for that period, must take into account the portion of the unitrust amount paid as a result of the ownership of the Pagetrust’s 52interest ofin 97the CODING:entity for that period;

or Page 52 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (b) In If the case of an entity is treated as a partnership, subchapter S corporation, or a disregarded entity under pursuant to the Internal Revenue Code of 1986, as amended, the amount of income tax attributable to the fiduciary’s trust’s or estate’s ownership share of the entity, based on its pro rata share of the taxable income of the entity that distributes the money, during the lookback period for the number of years or portion of years that the interest in the entity forwas held by the fiduciary, calculated as if all of the that period;tax was incurred by the fiduciary.

or (b) In If the case of an entity is treated as a partnership, subchapter S corporation, or a disregarded entity under pursuant to the Internal Revenue Code of 1986, as amended, the amount of income tax attributable to the fiduciary’s trust’s or estate’s ownership share of the entity, based on its pro rata share of the taxable income of the entity that distributes the money, during the lookback period for the number of years or portion of years that the interest in the entity was held by the fiduciary, calculated as if all of the that tax was incurred by the fiduciary.

(a) The trustee shall first treat as income of the trust all of the money or property received from the investment entity in the current accounting period year which would be considered Page 53 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 in the current accounting period year which would be considered income under this chapter if the trustee had directly held the trust’s pro rata share of the assets of the investment entity.

“Private trustee” means a trustee who is a natural Pageperson, 54but ofis 97not CODING:an independent person as set forth in s.

Page 54 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 person,738.102 butonly if the trustee is notunable anto independentuse personthe aspower setto forthadjust between income and principal with respect to receipts from entities described in this subsection pursuant to s.

738.102 only if the trustee is unable to use the power to adjust between income and principal with respect to receipts from entities described in this subsection pursuant to s.

As used in this subsection, the term “public entity” means an entity listed on a Pagepublic 55stock ofexchange. 97 CODING:

Page 55 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 public(12)(8) stockThis exchange.section must shall be applied before ss.

(12)(8) This section must shall be applied before ss.

(a) Accounting for the business or other activity as part of the fiduciary’s trust’s or estate’s general accounting Pagerecords; 56 of 97 CODING:

or Page 56 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 records;(b) Conducting the business or other activity through an entity described in s.

or (b) Conducting the business or other activity through an entity described in s.

and (c) Shall account for the net amount received from the sale of an asset of If a fiduciary sells assets of the business or other activity, other than a sale in the ordinary course of the business or other activity, the fiduciary must account for the Page 57 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 business or other activity, the fiduciary must account for the net amount received as principal in the fiduciary’s trust’s or estate’s general accounting records for the trust, to the extent the fiduciary determines that the net amount received is no longer required in the conduct of the business or other activity.

(d) A payor under a contract naming the fiduciary as Page 58 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (d) A payor under a contract naming the fiduciary as beneficiary.

(1) Must be added to principal and held subject to the terms of the lease, except as otherwise provided by law other Pagethan 59this ofchapter; 97 CODING:

and Page 59 of 97 CODING:

Florida Senate - 2024 CS for CSSB 1316 590-02905-24 20241316c1 (2) Is not allocated to income or available for SBdistribution 1316to 595-03345-24a 20241316c2beneficiary thanuntil thisthe chapter;fiduciary’s contractual obligations have been satisfied with respect to that amount.

and (2) Is not allocated to income or available for distribution to a beneficiary until the fiduciary’s contractual obligations have been satisfied with respect to that amount.

If unrealized increment is distributed as income but out of principal, the principal must be reimbursed Pagefor 60the ofincrement 97when CODING:realized.

If, in the reasonable judgment Page 60 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 forof the incrementfiduciary, whenexercised realized.in good faith, the ultimate payment of the bond principal is in doubt, the fiduciary may withhold the payment of incremental interest to the income beneficiary.

If, in the reasonable judgment of the fiduciary, exercised in good faith, the ultimate payment of the bond principal is in doubt, the fiduciary may withhold the payment of incremental interest to the income beneficiary.

738.415 is insubstantial, the Pagefiduciary 61may ofallocate 97the CODING:entire amount to principal, unless s.

Page 61 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 fiduciary738.203(5) mayapplies allocateto the entireallocation. amount to principal, unless s.

738.203(5) applies to the allocation.

That qualifies for a marital deduction with respect to the settlor’s estate under the Internal Revenue Code or Page 62 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 the settlor’s estate under the Internal Revenue Code or comparable law of any state because:

(f) “Separate fund” includes a private or commercial annuity, an individual retirement account, and a pension, Page 63 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 annuity, an individual retirement account, and a pension, profit-sharing, stock-bonus, stock ownership plan, or other deferred compensation fund holding assets exclusively for the benefit of a participant or account owner.

(3) A fiduciary shall allocate a payment received from a Page 64 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (3) A fiduciary shall allocate a payment received from a separate fund during an accounting period to income, to the extent of the internal income of the separate fund during the period, and allocate the balance to principal.

(6) The fiduciary of a nonseparate fund shall calculate Page 65 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (6) The fiduciary of a nonseparate fund shall calculate internal income of the fund as the percent calculated of the present value of the right to receive the remaining payments as determined under s.

738.607, Pagean 66asset ofsubject 97to CODING:s.

738.608, or any asset for which the Page 66 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 anfiduciary assetestablishes subjecta toreserve for depreciation under s.

738.608, or any asset for which the fiduciary establishes a reserve for depreciation under s.

Page2. 67 of 97 CODING:

As a factor for interest or the equivalent of interest Page 67 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 2.under an agreement creating a production payment;

As a factor for interest or the equivalent of interest under an agreement creating a production payment;

(3) This section chapter applies to an interest owned or held by a fiduciary regardless of whether or not a settlor decedent or donor was extracting minerals, water, or other natural resources before the fiduciary owned or held the Pageinterest 68became ofsubject 97to CODING:the trust or estate.

Page 68 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 interest(3) becameAn subjectallocation of a receipt under paragraph (1)(c) is presumed to be equitable if the trustamount orallocated estate.to principal is equal to the amount allowed by the Internal Revenue Code as a deduction for depletion of the interest.

(3) An allocation of a receipt under paragraph (1)(c) is presumed to be equitable if the amount allocated to principal is equal to the amount allowed by the Internal Revenue Code as a deduction for depletion of the interest.

(b) To principal, to the extent that the amount of timber cut removed from the land exceeds the rate of growth of the Page 69 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 cut removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;

If the fiduciary trust or estate acquires an interest in land used for growing and cutting timber on or after January 1, 2025 timberland after January 1, 2003, the fiduciary must shall allocate net receipts from the sale of timber and related Pageproducts 70as ofprovided 97in CODING:this section chapter.

Page 70 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 productsSection as32. provided in this section chapter.

Section 32.

or (d) Exercise the fiduciary’s authority under the terms of the trust to otherwise provide the surviving spouse with sufficient income from the trust assets, or the use of the trust assets, to qualify for the marital deduction, or to satisfy an Page 71 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 assets, to qualify for the marital deduction, or to satisfy an election by a surviving spouse under s.

738.414 738.607 Derivatives or and options.— (1) As used in For purposes of this section, the term “derivative” means a contract, an or financial instrument, or other arrangement, or a combination of contracts, and financial Page 72 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 other arrangement, or a combination of contracts, and financial instruments, or other arrangements, of which the value, rights, and obligations are, in whole or in part, dependent on or derived from an underlying which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset, a or group of tangible or intangible assets, an index, or an occurrence of an event.

estate, or Acquires an option to buy property for the trust or estate or an option to sell an asset owned by the trust or estate;, and Page 73 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 or estate;, and (b) The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised, an amount received for granting the option shall be allocated to principal.

The term includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return and allocate to principal the balance of the receipt or only the Page 74 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 allocate to principal the balance of the receipt or only the proceeds other than interest or current return.

738.416 Other financial instrument or arrangement.—A fiduciary shall allocate receipts from or related to a financial instrument or arrangement not otherwise addressed by this Pagechapter. 75 of 97 CODING:

The allocation must be consistent with ss.

738.414 and Page 75 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 chapter.738.415.

The allocation must be consistent with ss.

738.414 and 738.415.

(4) A premium on insurance covering loss of a principal Pageasset 76or income from or use of 97the CODING:asset.

Page 76 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 assetSection or37. income from or use of the asset.

Section 37.

Page4. 77 of 97 CODING:

Monitoring remedial activities and the release of Page 77 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 4.substances;

Monitoring remedial activities and the release of substances;

(2) A fiduciary may transfer to principal a reasonable Page 78 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (2) A fiduciary may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation but may not transfer any amount for depreciation:

(b) A disbursement made to prepare property for sale, Page 79 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (b) A disbursement made to prepare property for sale, including improvements and commissions;

(c) A disbursement made to prepare property for rental, Page 80 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (c) A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;

738.506 738.705 Income taxes.— (1) A tax required to be paid by a fiduciary which is based Pageon 81receipts ofallocated 97to CODING:income must shall be paid from income.

Page 81 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (2) A tax required to be paid by a fiduciary which is based on receipts allocated to incomeprincipal must shall be paid from income.principal, even if the tax is called an income tax by the taxing authority.

(2) A tax required to be paid by a fiduciary which is based on receipts allocated to principal must shall be paid from principal, even if the tax is called an income tax by the taxing authority.

736.08145 must be allocated and paid under paragraphs (3)(a) and (b) After applying subsections (1)-(3), the fiduciary shall adjust income or principal receipts to the extent that the trust’s or estate’s income taxes are reduced, but not eliminated, because the trust or estate receives a deduction for payments made to a Pagebeneficiary. 82 of 97 CODING:

The amount distributable to that beneficiary as Page 82 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 beneficiary.income as a result of this adjustment shall be equal to the cash received by the trust or estate, reduced, but not below zero, by the entity’s taxable income allocable to the trust or estate multiplied by the trust’s or estate’s income tax rate.

The amount distributable to that beneficiary as income as a result of this adjustment shall be equal to the cash received by the trust or estate, reduced, but not below zero, by the entity’s taxable income allocable to the trust or estate multiplied by the trust’s or estate’s income tax rate.

or (c) The Ownership by the fiduciary an estate or trust of an Page 83 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 (c) The Ownership by the fiduciary an estate or trust of an interest in an entity a part of whose taxable income, regardless of whether or not distributed, is includable in the taxable income of the fiduciary estate, trust, or a beneficiary;

(3) A fiduciary that charges a beneficiary under subsection (2) may offset the charge by obtaining payment from the beneficiary, withholding an amount from future distributions to the beneficiary, or adopting another method or combination of Pagemethods. 84 of 97 CODING:

Page 84 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 methods.Section 43.

Section 43.

Page2. 85 of 97 CODING:

Expenses of a proceeding or other matter that concerns Page 85 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 2.primarily the title to the property, other than title to the tenant’s estate.

Expenses of a proceeding or other matter that concerns primarily the title to the property, other than title to the tenant’s estate.

The part payable by the tenant is ascertainable by taking that percentage of the total that is found by dividing the present value of the tenant’s estate by the present value of an estate of the same form as that of the tenant, except that it is limited for a period corresponding to the reasonably expected duration of the Page 86 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 period corresponding to the reasonably expected duration of the improvement.

The fiduciary shall distribute the net income and net principal receipts to the Page 87 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.

Related penalties apportioned by the decedent’s will, the terms of the trust, or applicable law to the estate or Page 88 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 the terms of the trust, or applicable law to the estate or income interest that terminates.

PageSection 8945. of 97 CODING:

Section 738.602, Florida Statutes, is amended Page 89 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 Sectionto 45.read:

Section 738.602, Florida Statutes, is amended to read:

Pageb. 90 of 97 CODING:

Property specifically given to a beneficiary under the Page 90 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 b.decedent’s will or the terms of the trust;

Property specifically given to a beneficiary under the decedent’s will or the terms of the trust;

(4) If this section applies to income from an asset, a fiduciary may apply the requirements in this section to net gain or loss realized from the disposition of the asset after the decedent’s date of death, an income interest’s terminating Page 91 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 decedent’s date of death, an income interest’s terminating event, or the preceding distribution by the fiduciary.

(b) For an asset that becomes subject to the trust because of a decedent’s death, on the date of the decedent’s death, even if there is an intervening period of administration of the Page 92 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 if there is an intervening period of administration of the decedent’s estate;

(2) If the due date of a periodic income receipt or disbursement occurs on or after the date on which a decedent died or an income interest begins, a fiduciary must allocate the Page 93 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 died or an income interest begins, a fiduciary must allocate the receipt or disbursement to income.

PageSection 9448. of 97 CODING:

Section 738.703, Florida Statutes, is amended Page 94 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 Sectionto 48.read:

Section 738.703, Florida Statutes, is amended to read:

PageSection 9549. of 97 CODING:

Section 738.801, Florida Statutes, is amended Page 95 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 Sectionto 49.read:

Section 738.801, Florida Statutes, is amended to read:

Section 738.804, Florida Statutes, is amended Pageto 96read: of 97 CODING:

Page 96 of 97 CODING:

Florida Senate - 2024 CS for CS for SB 1316 595-03345-24590-02905-24 20241316c220241316c1 738.804 Application.—Except as provided in the terms of the trust instrument, the will, or this chapter, this chapter shall apply to read:any receipt or expense received or incurred and any disbursement made after January 1, 2025 January 1, 2003, by any trust or decedent’s estate, whether established before or after January 1, 2025 January 1, 2003, and whether the asset involved was acquired by the trustee or personal representative before or after January 1, 2025 January 1, 2003.

738.804 Application.—Except as provided in the terms of the trust instrument, the will, or this chapter, this chapter shall apply to any receipt or expense received or incurred and any disbursement made after January 1, 2025 January 1, 2003, by any trust or decedent’s estate, whether established before or after January 1, 2025 January 1, 2003, and whether the asset involved was acquired by the trustee or personal representative before or after January 1, 2025 January 1, 2003.