Amendments to Florida’s Trust Code Bring Wide-Ranging Changes

By: George Taylor

Florida trust grantors, trustees, beneficiaries, and future generations will be affected by changes to the trust code that are among the 146 new laws that took effect on July 1, 2022.  Several changes to Florida’s trust administration and accounting statutes will require special attention by trust and estate attorneys, fiduciaries, and even parents preparing trusts for their unborn children and future descendants.

The following is a summary of the changes (much of the language below is drawn directly from the proposed statute language):

Representation by fiduciaries and parents. To the extent there is no conflict of interest between the representative and the person represented or among those being represented with respect to a particular question or dispute, a parent may represent and bind the parent’s unborn child and the unborn descendants of such unborn child, or the parent’s minor child and the minor or unborn descendants of such minor child, if a guardian of the property for the unborn child, minor child, or such child’s descendants has not been appointed.

Statutory rule against perpetuities. As to any trust created on or after July 1, 2022, Florida Statute § 689.225 shall apply to a nonvested property interest or power of appointment contained in a trust by substituting 1,000 years in place of “90 years” in each place such term appears in this section unless the terms of the trust require that all beneficial interests in the trust vest or terminate within a lesser period.  360 years still applies to any trust created after December 31, 2000, through June 30, 2022.

Methods and waiver of notice. Permissible methods of notice under the Trust Code was amended to specifically include e-mails.  A significant addition applies to family trust companies.  A family trust company, licensed family trust company, or foreign licensed family trust company, as defined in s. 662.111, that is a trustee of a trust may use any permissible method for providing notice or for sending a document specified in the Trust Code or may send a properly directed e-mail that contains an attached notice or document or contains a hyperlink through which the recipient can view the notice or document as a permissible method of providing notice or sending a document.  Such notice or document sent by e-mail is deemed to have been sent if any username, password, or other specific instructions needed to access the notice or document are communicated to the recipient beforehand or contemporaneously with the sending of the e-mail message containing the notice, document, or hyperlink, or upon the request of the recipient.

Noncharitable trust without ascertainable beneficiary. A trust created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose may not be enforced for more than 1,000 years.  Under the old rule, enforcement was limited to no more than 21 years.

Duty to inform and account. Under the amendments, the terms of a trust may limit the duties of a trustee of a family trust company to inform and account.  If a family trust company, licensed family trust company, or foreign licensed family trust company is a trustee of an irrevocable trust, the terms of the trust may permit for accounting to the qualified beneficiaries only at the termination of the trust; upon the removal, resignation, or other event resulting in a trustee ceasing to serve as a trustee; or upon demand of a qualified beneficiary or the representative of a qualified beneficiary.  This paragraph may not be construed to prohibit a trustee that is a family trust company, licensed family trust company, or foreign licensed family trust company from voluntarily accounting to the qualified beneficiaries annually or at other times selected by such trustee.

Trust accountings. Again, big changes for family trust companies.  Notwithstanding select subsections, if a family trust company, licensed family trust company, or foreign licensed family trust company is a trustee of the trust, such trustee may elect, for any accounting period, to provide the qualified beneficiaries with all of the following information: a notice stating that the trustee has made an election to provide the information described in this subsection; the information required by paragraph (2)(a) in the statute, and, if applicable, the information required by paragraph (2)(f); a financial statement for the trust which summarizes the information provided pursuant to paragraphs (2)(b)-(e).  The financial statement must contain sufficient information to put the beneficiary on notice of the trust’s comprehensive assets and liabilities as well as of the transactions occurring during the accounting period.  A financial statement that reports a summary of the comprehensive assets and liabilities at the beginning and end of the accounting period and the aggregate amounts of all cash and property transactions, gains, losses, receipts, expenses, disbursements, distributions, accruals, or allowances occurring within the accounting period for each category of assets and liabilities meets the requirements of this paragraph.  For the purposes of this chapter, a financial statement that a trustee provides to a beneficiary of a trust under this subsection is deemed to be a trust accounting.

Note the new statute(s) has other relevant sections that were not included in this article for purposes of brevity. This includes a provision surrounding certain Spousal Limited Access Trusts (“SLATs”) which will allow a contributing spouse to be a beneficiary of the trust in the event of the death of the beneficiary spouse, which may be covered in a future blog (Forbes covered it here).  Please review the statute for more information.  If you have any questions, feel free to contact me to discuss further.

George J. Taylor is a partner in Brinkley Morgan’s Estate and Trust Litigation and Business Litigation practice groups in its Fort Lauderdale and Boca Raton, Florida, offices.