reglab/statecodes huggingface dataset:
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XIV - Florida Uniform Directed Trust Act (Ss. 736.1401-736.1416) › 736.141 - Duty to provide information.

736.141 Duty to provide information.—
(1) Subject to s. 736.1411, relating to limitations on the duties of trustees or trust directors to monitor, inform, or advise on matters involving the other, a trustee shall provide information to a trust director to the extent the information is reasonably related to the powers or duties of the trust director.
(2) Subject to s. 736.1411, relating to limitations on the duties of trustees or trust directors to monitor, inform, or advise on matters involving the other, a trust director shall provide information to a trustee or another trust director to the extent the information is reasonably related to the powers or duties of the trustee or other trust director.
(3) A trustee that acts in reliance on information provided by a trust director is not liable for a breach of trust to the extent the breach resulted from the reliance, unless by so acting the trustee engages in willful misconduct.
(4) A trust director that acts in reliance on information provided by a trustee or another trust director is not liable for a breach of trust to the extent the breach resulted from the reliance, unless by so acting the trust director engages in willful misconduct.
(5) A trust director shall provide information within the trust director’s knowledge or control to a qualified beneficiary upon a written request of a qualified beneficiary to the extent the information is reasonably related to the powers or duties of the trust director.
History.—s. 21, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XIV - Florida Uniform Directed Trust Act (Ss. 736.1401-736.1416) › 736.1411 - No duty to monitor, inform, or advise.

736.1411 No duty to monitor, inform, or advise.—
(1) Notwithstanding s. 736.1409(1), relating to the duty of a directed trustee to take reasonable action when directed and to the release of liability for such action, unless the terms of a trust provide otherwise:
(a) A trustee does not have a duty to:
1. Monitor a trust director; or
2. Inform or give advice to a settlor, beneficiary, trustee, or trust director concerning an instance in which the trustee might have acted differently from the trust director.
(b) By taking an action described in paragraph (a), a trustee does not assume the duty excluded by paragraph (a).
(2) Notwithstanding s. 736.1408(1), relating to the fiduciary duty of a trust director, unless the terms of a trust provide otherwise:
(a) A trust director does not have a duty to:
1. Monitor a trustee or another trust director; or
2. Inform or give advice to a settlor, beneficiary, trustee, or another trust director concerning an instance in which the trust director might have acted differently from a trustee or another trust director.
(b) By taking an action described in paragraph (a), a trust director does not assume the duty excluded by paragraph (a).
History.—s. 22, ch. 2021-183; s. 58, ch. 2022-4.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XIV - Florida Uniform Directed Trust Act (Ss. 736.1401-736.1416) › 736.1412 - Application to cotrustee.

736.1412 Application to cotrustee.—
(1) The terms of a trust may provide for the appointment of more than one trustee but confer upon one or more of the trustees, to the exclusion of the others, the power to direct or prevent specified actions of the trustees.
(2) The excluded trustees shall act in accordance with the exercise of the power in the manner, and with the same duty and liability, as directed trustees with respect to a trust director’s power of direction under s. 736.1409, relating to the duties and liabilities of a directed trustee; s. 736.141, relating to the duties of a trustee and trust director to provide and rely on information; and s. 736.1411, relating to limitations on the duties of trustees or trust directors to monitor, inform, or advise on matters involving the other.
(3) The trustee or trustees having the power to direct or prevent actions of the excluded trustees shall be liable to the beneficiaries with respect to the exercise of the power as if the excluded trustees were not in office and shall have the exclusive obligation to account to and to defend any action brought by the beneficiaries with respect to the exercise of the power.
History.—s. 23, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XIV - Florida Uniform Directed Trust Act (Ss. 736.1401-736.1416) › 736.1413 - Limitation of action against trust director.

736.1413 Limitation of action against trust director.—
(1) An action against a trust director for breach of trust must be commenced within the same limitation period for an action for breach of trust against a trustee in a like position and under similar circumstances under s. 736.1008, relating to limitations on proceedings against trustees.
(2) A trust accounting or any other written report of a trustee or a trust director has the same effect on the limitation period for an action against a trust director for breach of trust that such trust accounting or written report would have under s. 736.1008, relating to limitations on proceedings against trustees, in an action for breach of trust against a trustee in a like position and under similar circumstances.
History.—s. 24, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XIV - Florida Uniform Directed Trust Act (Ss. 736.1401-736.1416) › 736.1414 - Defenses in action against trust director.

736.1414 Defenses in action against trust director.—In an action against a trust director for breach of trust, the trust director may assert the same defenses a trustee in a like position and under similar circumstances could assert in an action for breach of trust against the trustee.
History.—s. 25, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XIV - Florida Uniform Directed Trust Act (Ss. 736.1401-736.1416) › 736.1415 - Jurisdiction over trust director.

736.1415 Jurisdiction over trust director.—
(1) By accepting appointment as a trust director of a trust subject to this part, the trust director submits to the personal jurisdiction of the courts of the state regarding any matter related to a power or duty of the trust director.
(2) This section does not preclude other methods of obtaining jurisdiction over a trust director.
History.—s. 26, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1501 - Short title.

736.1501 Short title.—This part may be cited as the “Community Property Trust Act.”
History.—s. 29, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1502 - Definitions.

736.1502 Definitions.—Unless the context otherwise requires, as used in this part:
(1) “Community property” means the property and the appreciation of and income from the property owned by a qualified trustee of a community property trust during the marriage of the settlor spouses. The property owned by a community property trust pursuant to this part and the appreciation of and income from such property shall be deemed to be community property for purposes of general law.
(2) “Community property trust” means an express trust that complies with s. 736.1503 and is created on or after July 1, 2021.
(3) “Decree” means a judgment or other order of a court of competent jurisdiction.
(4) “Dissolution” means either:
(a) Termination of a marriage by a decree of dissolution, divorce, annulment, or declaration of invalidity; or
(b) Entry of a decree of legal separation maintenance by a court of competent jurisdiction in another state that recognizes legal separation or maintenance under its laws.
(5) “During marriage” means a period that begins at marriage and ends upon the dissolution of marriage or upon the death of a spouse.
(6) “Qualified trustee” means either:
(a) A natural person who is a resident of the state; or
(b) A company authorized to act as a trustee in the state.
A qualified trustee’s powers include, but are not limited to, maintaining records for the trust on an exclusive or a nonexclusive basis and preparing or arranging for the preparation of, on an exclusive or a nonexclusive basis, any income tax returns that must be filed by the trust.
(7) “Settlor spouses” means a married couple who establishes a community property trust pursuant to this part.
History.—s. 30, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1503 - Requirements for community property trust.

736.1503 Requirements for community property trust.—An arrangement is a community property trust if one or both settlor spouses transfer property to a trust that:
(1) Expressly declares that the trust is a community property trust within the meaning of this part.
(2) Has at least one trustee who is a qualified trustee, provided that both spouses or either spouse also may be a trustee.
(3) Is signed by both settlor spouses consistent with the formalities required for the execution of a trust under this chapter.
(4) Contains substantially the following language in capital letters at the beginning of the community property trust agreement:
THE CONSEQUENCES OF THIS COMMUNITY PROPERTY TRUST MAY BE VERY EXTENSIVE, INCLUDING, BUT NOT LIMITED TO, YOUR RIGHTS WITH RESPECT TO CREDITORS AND OTHER THIRD PARTIES, AND YOUR RIGHTS WITH YOUR SPOUSE DURING THE COURSE OF YOUR MARRIAGE, AT THE TIME OF A DIVORCE, AND UPON THE DEATH OF YOU OR YOUR SPOUSE. ACCORDINGLY, THIS TRUST AGREEMENT SHOULD BE SIGNED ONLY AFTER CAREFUL CONSIDERATION. IF YOU HAVE ANY QUESTIONS ABOUT THIS TRUST AGREEMENT, YOU SHOULD SEEK COMPETENT AND INDEPENDENT LEGAL ADVICE. ALTHOUGH NOT A REQUIREMENT, IT IS STRONGLY ADVISABLE THAT EACH SPOUSE OBTAIN THEIR OWN SEPARATE LEGAL COUNSEL PRIOR TO THE EXECUTION OF THIS TRUST.
History.—s. 31, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1504 - Agreement establishing community property trust; amendments and revocation.

736.1504 Agreement establishing community property trust; amendments and revocation.—
(1) In the agreement establishing a community property trust, the settlor spouses may agree upon:
(a) The rights and obligations in the property transferred to the trust, notwithstanding when and where the property is acquired or located.
(b) The management and control of the property transferred into the trust.
(c) The disposition of the property transferred to the trust on dissolution, death, or the occurrence or nonoccurrence of another event, subject to ss. 736.1507 and 736.1508.
(d) Whether the trust is revocable or irrevocable.
(e) Any other matter that affects the property transferred to the trust and does not violate public policy or general law imposing a criminal penalty, or result in the property not being treated as community property under the laws of a relevant jurisdiction.
(2) In the event of the death of a settlor spouse, the surviving spouse may amend a community property trust regarding the disposition of that spouse’s one-half share of the community property, regardless of whether the agreement provides that the community property trust is irrevocable.
(3) A community property trust may be amended or revoked by the settlor spouses unless the agreement itself specifically provides that the community property trust is irrevocable.
(4) Notwithstanding any other provision of this code, the settlor spouses shall be deemed to be the only qualified beneficiaries of a community property trust until the death of one of the settlor spouses, regardless of whether the trust is revocable or irrevocable. After the death of one of the settlor spouses, the surviving spouse shall be deemed to be the only qualified beneficiary as to his or her share of the community property trust.
History.—s. 32, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1505 - Classification of property as community property; enforcement; duration; management and control; effect of distributions.

736.1505 Classification of property as community property; enforcement; duration; management and control; effect of distributions.—
(1) Whether both, one, or neither is domiciled in the state, settlor spouses may classify any or all of their property as community property by transferring that property to a community property trust and providing in the trust that the property is community property pursuant to this part.
(2) A community property trust is enforceable without consideration.
(3) All property owned by a community property trust is community property under the laws of the state during the marriage of the settlor spouses.
(4) The right to manage and control property that is transferred to a community property trust is determined by the terms of the trust agreement.
(5) When property is distributed from a community property trust, the property shall no longer constitute community property within the meaning of this part, provided that community property as classified by a jurisdiction other than the state retains its character as community property to the extent otherwise provided by ss. 732.216-732.228.
History.—s. 33, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1506 - Satisfaction of obligations.

736.1506 Satisfaction of obligations.—Except as provided in s. 4, Art. X of the State Constitution:
(1) An obligation solely incurred by one settlor spouse before or during the marriage may be satisfied from that settlor spouse’s one-half share of a community property trust, unless a greater amount is otherwise provided in the community property trust agreement.
(2) An obligation incurred by both spouses during the marriage may be satisfied from a community property trust of the settlor spouses.
History.—s. 34, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1507 - Death of a spouse.

736.1507 Death of a spouse.—Upon the death of a spouse, one-half of the aggregate value of the property held in a community property trust established by the settlor spouses reflects the share of the surviving spouse and is not subject to testamentary disposition by the decedent spouse or distribution under the laws of succession of the state. The other one-half of the value of that property reflects the share of the decedent spouse and is subject to testamentary disposition or distribution under the laws of succession of the state. Unless provided otherwise in the community property trust agreement, the trustee has the power to distribute assets of the trust in divided or undivided interests and to adjust resulting differences in valuation. A distribution in kind may be made on the basis of a non-pro rata division of the aggregate value of the trust assets, on the basis of a pro rata division of each individual asset, or by using both methods. The decedent’s spouse’s one-half share shall not be included in the elective estate.
History.—s. 35, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1509 - Right of child to support.

736.1509 Right of child to support.—A community property trust does not adversely affect the right of a child of the settlor spouses to support, pursuant to s. 61.30 or the applicable law of another jurisdiction, that either spouse would be required to give under the applicable laws of the settlor spouses’ state of domicile.
History.—s. 37, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.151 - Homestead property.

736.151 Homestead property.—
(1) Property that is transferred to or acquired subject to a community property trust may continue to qualify or may initially qualify as the settlor spouses’ homestead within the meaning of s. 4(a)(1), Art. X of the State Constitution and for all purposes of general law, provided that the property would qualify as the settlor spouses’ homestead if title was held in one or both of the settlor spouses’ individual names.
(2) The settlor spouses shall be deemed to have beneficial title in equity to the homestead property held subject to a community property trust for all purposes, including for purposes of s. 196.031.
History.—s. 38, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1511 - Application of Internal Revenue Code; community property classified by another jurisdiction.

736.1511 Application of Internal Revenue Code; community property classified by another jurisdiction.—For purposes of the application of s. 1014(b)(6) of the Internal Revenue Code of 1986, 26 U.S.C. s. 1014(b)(6), as of January 1, 2021, a community property trust is considered a trust established under the community property laws of the state. Community property, as classified by a jurisdiction other than this state, which is transferred to a community property trust retains its character as community property while in the trust. If the trust is revoked and property is transferred on revocation of the trust, the community property as classified by a jurisdiction other than the state retains its character as community property to the extent otherwise provided by ss. 732.216-732.228.
History.—s. 39, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 736 - Florida Trust Code › Part XV - Community Property Trust Act (Ss. 736.1501-736.1512) › 736.1512 - Unenforceable trusts.

736.1512 Unenforceable trusts.—
(1) A community property trust executed during marriage is not enforceable if the spouse against whom enforcement is sought proves that:
(a) The trust was unconscionable when made;
(b) The spouse against whom enforcement is sought did not execute the community property trust agreement voluntarily;
(c) The community property trust agreement was the product of fraud, duress, coercion, or overreaching; or
(d) Before execution of the community property trust agreement, the spouse against whom enforcement is sought:
1. Was not given a fair and reasonable disclosure of the property and financial obligations of the other spouse.
2. Did not voluntarily sign a written waiver expressly waiving right to disclosure of the property and financial obligations of the other spouse beyond the disclosure provided.
3. Did not have notice of the property or financial obligations of the other spouse.
(2) Whether a community property trust is unconscionable shall be determined by a court as a matter of law.
(3) A community property trust may not be deemed unenforceable solely on the fact that the settlor spouses did not have separate legal representation when executing the community property trust agreement.
History.—s. 40, ch. 2021-183.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.103 - Fiduciary Duties; General Principles.

738.103 Fiduciary duties; general principles.—
(1) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of ss. 738.201 and 738.202 and ss. 738.301-738.303, a fiduciary:
(a) Shall administer a trust or estate in accordance with the terms of the trust or the will, even if there is a different provision in this chapter.
(b) May administer a trust or estate by the exercise of a discretionary power of administration given to the fiduciary by the terms of the trust or the will, even if the exercise of the power produces a result different from a result required or permitted by this chapter.
(c) Shall administer a trust or estate in accordance with this chapter if the terms of the trust or the will do not contain a different provision or do not give the fiduciary a discretionary power of administration.
(d) Shall add a receipt or charge a disbursement to principal to the extent the terms of the trust and this chapter do not provide a rule for allocating the receipt or disbursement to or between principal and income.
(2) In exercising the power to adjust under s. 738.104(1) or a discretionary power of administration regarding a matter within the scope of this chapter, whether granted by the terms of a trust, a will, or this chapter, a fiduciary shall administer a trust or estate impartially, based on what is fair and reasonable to all of the beneficiaries, except to the extent the terms of the trust or the will clearly manifest an intention that the fiduciary shall or may favor one or more of the beneficiaries. A determination in accordance with this chapter is presumed to be fair and reasonable to all of the beneficiaries.
(3) Except as provided in s. 738.1041(9), this chapter pertains to the administration of a trust and is applicable to any trust that is administered in this state or under its law. This chapter also applies to any estate that is administered in this state unless the provision is limited in application to a trustee, rather than a fiduciary.
History.—s. 1, ch. 2002-42; s. 3, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.301 - When Right to Income Begins and Ends.

738.301 When right to income begins and ends.—An income beneficiary is entitled to net income from the date on which the income interest begins.
(1) An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interest.
(2) An asset becomes subject to a trust:
(a) On the date the asset is transferred to the trust in the case of an asset that is transferred to a trust during the transferor’s life;
(b) On the date of a testator’s death in the case of an asset that becomes subject to a trust by reason of a will, even if there is an intervening period of administration of the testator’s estate; or
(c) On the date of an individual’s death in the case of an asset that is transferred to a fiduciary by a third party because of the individual’s death.
(3) An asset becomes subject to a successive income interest on the day after the preceding income interest ends, as determined under subsection (4), even if there is an intervening period of administration to wind up the preceding income interest.
(4) An income interest ends on the day before an income beneficiary dies or another terminating event occurs, or on the last day of a period during which there is no beneficiary to whom a fiduciary may distribute income.
History.—s. 1, ch. 2002-42; s. 9, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.302 - Apportionment of Receipts and Disbursements When Decedent Dies or Income Interest Begins.

738.302 Apportionment of receipts and disbursements when decedent dies or income interest begins.—
(1) A fiduciary shall allocate an income receipt or disbursement other than one to which s. 738.201(1) applies to principal if the due date of the receipt or disbursement occurs before a decedent dies in the case of an estate or before an income interest begins in the case of a trust or successive income interest.
(2) A fiduciary shall allocate an income receipt or disbursement to income if the due date of the receipt or disbursement occurs on or after the date on which a decedent dies or an income interest begins and the due date is a periodic due date. An income receipt or disbursement shall be treated as accruing from day to day if the due date of the receipt or disbursement is not periodic or the receipt or disbursement has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins shall be allocated to principal and the balance shall be allocated to income.
(3) An item of income or an obligation is due on the date the payor is required to make a payment. If a payment date is not stated, there is no due date for the purposes of this chapter. Distributions to shareholders or other owners from an entity to which s. 738.401 applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic for receipts or disbursements that shall be paid at regular intervals under a lease or an obligation to pay interest or if an entity customarily makes distributions at regular intervals.
(4) Nothing in this section shall prevent the application of s. 733.817 to apportion tax to the income recipient under this section.
History.—s. 1, ch. 2002-42; s. 10, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.303 - Apportionment When Income Interest Ends.

738.303 Apportionment when income interest ends.—
(1) For purposes of this section, “undistributed income” means net income received on or before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust. In the case of a trust being administered as a unitrust under s. 738.1041, the term “undistributed income” means the prorated unitrust amount computed on a daily basis through the date on which the income interest ends.
(2) When a mandatory income interest ends, the fiduciary shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary’s share of the undistributed income that is not disposed of under the terms of the trust unless the beneficiary has an unqualified power to revoke more than 5 percent of the trust immediately before the income interest ends. In the latter case, the undistributed income from the portion of the trust that may be revoked shall be added to principal.
(3) When a fiduciary’s obligation to pay a fixed annuity or a fixed fraction of the value of the trust’s assets ends, the fiduciary shall prorate the final payment if and to the extent required by applicable law to accomplish a purpose of the trust or its grantor relating to income, gift, estate, or other tax requirements.
History.—s. 1, ch. 2002-42; s. 7, ch. 2005-85; s. 11, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.402 - Distribution From Trust or Estate.

738.402 Distribution from trust or estate.—A fiduciary shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest and allocate to principal an amount received as a distribution of principal from such a trust or estate. If a fiduciary purchases an interest in a trust that is an investment entity, or a decedent or donor transfers an interest in such a trust to a fiduciary, s. 738.401 or s. 738.608 applies to a receipt from the trust.
History.—s. 1, ch. 2002-42; s. 13, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.403 - Business and Other Activities Conducted by Fiduciary.

738.403 Business and other activities conducted by fiduciary.—
(1) If a fiduciary who conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or activity instead of accounting for the business or activity as part of the trust’s or estate’s general accounting records, the fiduciary may maintain separate accounting records for the transactions of the business or other activity, whether or not the assets of such business or activity are segregated from other trust or estate assets.
(2) A fiduciary who accounts separately for a business or other activity may determine the extent to which the net cash receipts of the business or activity must be retained for working capital, the acquisition or replacement of fixed assets, and other reasonably foreseeable needs of the business or activity, and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust’s or estate’s general accounting records. If a fiduciary sells assets of the business or other activity, other than in the ordinary course of the business or activity, the fiduciary must account for the net amount received as principal in the trust’s or estate’s general accounting records to the extent the fiduciary determines that the amount received is no longer required in the conduct of the business.
(3) Activities for which a fiduciary may maintain separate accounting records include:
(a) Retail, manufacturing, service, and other traditional business activities.
(b) Farming.
(c) Raising and selling livestock and other animals.
(d) Management of rental properties.
(e) Extraction of minerals and other natural resources.
(f) Timber operations.
(g) Activities to which s. 738.607 applies.
History.—s. 1, ch. 2002-42; s. 14, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.501 - Principal Receipts.

738.501 Principal receipts.—A fiduciary shall allocate to principal:
(1) To the extent not allocated to income under this chapter, assets received from a donor during the donor’s lifetime, a decedent’s estate, a trust with a terminating income interest, or a payor under a contract naming the trust, estate, or fiduciary as beneficiary.
(2) Money or other property received from the sale, exchange, liquidation, or change in form of a principal asset, including realized profit, subject to this section.
(3) Amounts recovered from third parties to reimburse the trust or estate because of disbursements described in s. 738.702(1)(g) or for other reasons to the extent not based on the loss of income.
(4) Proceeds of property taken by eminent domain; however, a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income.
(5) Net income received in an accounting period during which there is no beneficiary to whom a fiduciary may or shall distribute income.
(6) Other receipts as provided in ss. 738.601-738.608.
History.—s. 1, ch. 2002-42; s. 15, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.502 - Rental Property.

738.502 Rental property.—If a fiduciary accounts for receipts from rental property pursuant to this section, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the fiduciary’s contractual obligations have been satisfied with respect to that amount.
History.—s. 1, ch. 2002-42; s. 16, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.503 - Obligation to Pay Money.

738.503 Obligation to pay money.—
(1) An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the fiduciary, including an amount received as consideration for prepaying principal, shall be allocated to income without any provision for amortization of premium.
(2) Except as otherwise provided herein, a fiduciary shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the fiduciary.
(3) The increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable at a future time in excess of the price at which it was issued or purchased, if purchased after issuance, is distributable as income. If the increment in value accrues and becomes payable pursuant to a fixed schedule of appreciation, it may be distributed to the beneficiary who was the income beneficiary at the time of increment from the first principal cash available or, if none is available, when the increment is realized by sale, redemption, or other disposition. If unrealized increment is distributed as income but out of principal, the principal must be reimbursed for the increment when realized. 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.
(4) This section does not apply to an obligation to which s. 738.602, s. 738.603, s. 738.604, s. 738.605, s. 738.607, or s. 738.608 applies.
History.—s. 1, ch. 2002-42; s. 17, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.504 - Insurance Policies and Similar Contracts.

738.504 Insurance policies and similar contracts.—
(1) Except as otherwise provided in subsection (2), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust, estate, or fiduciary is named as beneficiary, including a contract that insures the trust, estate, or fiduciary against loss for damage to, destruction of, or loss of title to a trust or estate asset. The fiduciary shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income and to principal if the premiums are paid from principal.
(2) A fiduciary shall allocate to income the proceeds of a contract that insures the fiduciary against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to s. 738.403, loss of profits from a business.
(3) This section does not apply to a contract to which s. 738.602 applies.
History.—s. 1, ch. 2002-42; s. 18, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.601 - Insubstantial Allocations Not Required.

738.601 Insubstantial allocations not required.—If a fiduciary determines that an allocation between principal and income required by s. 738.602, s. 738.603, s. 738.604, s. 738.605, or s. 738.608 is insubstantial, the fiduciary may allocate the entire amount to principal unless one of the circumstances described in s. 738.104(3) applies to the allocation. This power may be exercised by a cofiduciary under the circumstances described in s. 738.104(4) and may be released for the reasons and in the manner described in s. 738.104(5). An allocation is presumed to be insubstantial if:
(1) The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent; or
(2) The value of the asset producing the receipt for which the allocation would be made is less than 10 percent of the total value of the trust or estate assets at the beginning of the accounting period.
History.—s. 1, ch. 2002-42; s. 19, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.603 - Liquidating Asset.

738.603 Liquidating asset.—
(1) For purposes of this section, the term “liquidating asset” means an asset the value of which will diminish or terminate because the asset is expected to produce receipts for a period of limited duration. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments for more than 1 year under an arrangement that does not provide for the payment of interest on the unpaid balance. The term does not include a payment subject to s. 738.602, resources subject to s. 738.604, timber subject to s. 738.605, an activity subject to s. 738.607, an asset subject to s. 738.608, or any asset for which the fiduciary establishes a reserve for depreciation under s. 738.703.
(2) A fiduciary shall allocate to income 5 percent of the receipts from the carrying value of a liquidating asset and the balance to principal. Amounts allocated to principal shall reduce the carrying value of the liquidating asset, but not below zero. Amounts received in excess of the remaining carrying value must be allocated to principal.
History.—s. 1, ch. 2002-42; s. 21, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.604 - Minerals, Water, and Other Natural Resources.

738.604 Minerals, water, and other natural resources.—
(1) If a fiduciary accounts for receipts from an interest in minerals or other natural resources pursuant to this section, the fiduciary shall allocate such receipts as follows:
(a) If received as nominal delay rental or nominal annual rent on a lease, a receipt shall be allocated to income.
(b) If received from a production payment, a receipt shall be allocated to income if and to the extent the agreement creating the production payment provides a factor for interest or its equivalent. The balance shall be allocated to principal.
(c) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 percent shall be allocated to principal and the balance to income.
(d) If an amount is received from a working interest or any other interest not provided for in paragraph (a), paragraph (b), or paragraph (c), 90 percent of the net amount received shall be allocated to principal and the balance to income.
(2) An amount received on account of an interest in water that is renewable shall be allocated to income. If the water is not renewable, 90 percent of the amount shall be allocated to principal and the balance to income.
(3) This chapter applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust or estate.
(4) If a trust or estate owns an interest in minerals, water, or other natural resources on January 1, 2003, the fiduciary may allocate receipts from the interest as provided in this chapter or in the manner used by the fiduciary before January 1, 2003. If the trust or estate acquires an interest in minerals, water, or other natural resources after January 1, 2003, the fiduciary shall allocate receipts from the interest as provided in this chapter.
History.—s. 1, ch. 2002-42; s. 22, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.605 - Timber.

738.605 Timber.—
(1) If a fiduciary accounts for receipts from the sale of timber and related products pursuant to this section, the fiduciary shall allocate such net receipts as follows:
(a) To income to the extent the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest;
(b) To principal to the extent the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(c) To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust or estate by determining the amount of timber removed from the land under the lease or contract and applying the rules in paragraphs (a) and (b); or
(d) To principal to the extent advance payments, bonuses, and other payments are not allocated pursuant to paragraph (a), paragraph (b), or paragraph (c).
(2) In determining net receipts to be allocated pursuant to subsection (1), a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.
(3) This chapter applies whether or not a decedent or donor was harvesting timber from the property before the property became subject to the trust or estate.
(4) If a trust or estate owns an interest in timberland on January 1, 2003, the fiduciary may allocate net receipts from the sale of timber and related products as provided in this chapter or in the manner used by the fiduciary before January 1, 2003. If the trust or estate acquires an interest in timberland after January 1, 2003, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this chapter.
History.—s. 1, ch. 2002-42; s. 23, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.606 - Property Not Productive of Income.

738.606 Property not productive of income.—
(1) If a marital deduction under the Internal Revenue Code or comparable law of any state is allowed for all or part of a trust, or if assets are transferred to a trust that satisfies the requirements of s. 732.2025(2)(a) and (c), and such assets have been used in whole or in part to satisfy an election by a surviving spouse under s. 732.2125 and consist of property that, in the aggregate, does not provide the spouse with sufficient income from or use of the trust assets, and if amounts the trustee transfers from principal to income under s. 738.104 and distributes to the spouse from principal pursuant to the terms of the trust are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, even though, in the case of an elective share trust, a marital deduction is not made or is only partially made, the spouse may require the trustee of such marital trust or elective share trust to make property productive of income, convert property within a reasonable time, or exercise the power conferred by ss. 738.104 and 738.1041. The trustee may decide which action or combination of actions to take.
(2) In cases not governed by subsection (1), proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.
History.—s. 1, ch. 2002-42; s. 24, ch. 2012-49; s. 12, ch. 2017-121.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.607 - Derivatives and Options.

738.607 Derivatives and options.—
(1) For purposes of this section, “derivative” means a contract or financial instrument or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or other market indicator for an asset or a group of assets.
(2) To the extent a fiduciary does not account under s. 738.403 for transactions in derivatives, the fiduciary shall allocate to principal receipts from and disbursements made in connection with those transactions.
(3) If a fiduciary grants an option to buy property from the trust or estate whether or not the trust or estate owns the property when the option is granted, grants an option that permits another person to sell property to the trust or 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 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. An amount paid to acquire the option shall be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted to a grantor of the trust or estate for services rendered, shall be allocated to principal.
History.—s. 1, ch. 2002-42; s. 25, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.608 - Asset-Backed Securities.

738.608 Asset-backed securities.—
(1) For purposes of this section, “asset-backed security” means an asset the value of which is based upon the right given the owner to receive distributions from the proceeds of financial assets that provide collateral for the security. 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 or only the proceeds other than interest or current return. The term does not include an asset to which s. 738.401 or s. 738.602 applies.
(2) If a trust or estate receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the fiduciary shall allocate to income the portion of the payment which the payor identifies as being from interest or other current return and allocate the balance of the payment to principal.
(3) If a trust or estate receives one or more payments in exchange for the trust’s or estate’s entire interest in an asset-backed security during a single accounting period, the fiduciary shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust’s or estate’s interest in the security over more than a single accounting period, the fiduciary shall allocate 10 percent of the payment to income and the balance to principal.
History.—s. 1, ch. 2002-42; s. 26, ch. 2012-49.
2023 Florida Statutes › Title XLII - Estates and Trusts › Chapter 738 - Principal and Income › 738.701 - Disbursements From Income.

738.701 Disbursements from income.—A fiduciary shall make the following disbursements from income to the extent they are not disbursements to which s. 738.201(2) applies:
(1) One-half of the regular compensation of the fiduciary and of any person providing investment advisory or custodial services to the fiduciary.
(2) One-half of all expenses for accountings, judicial proceedings, or other matters that involve both the income and remainder interests.
(3) All of the other ordinary expenses incurred in connection with the administration, management, or preservation of trust property and the distribution of income, including interest, ordinary repairs, regularly recurring taxes assessed against principal, and expenses of a proceeding or other matter that concerns primarily the income interest.
(4) Recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.
History.—s. 1, ch. 2002-42; s. 27, ch. 2012-49.