Fla. Stat. § 738.201
Fiduciary duties; general principles
Redline — January 1, 2012 → current.View current text →
Current — January 1, 2024
As of January 1, 2012
After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply:
(1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a beneficiary under ss. 738.301-738.706 and subsection (5). The fiduciary shall distribute the net income and net principal receipts to the beneficiary who is to receive the specific property.
(2) A fiduciary shall determine the remaining net income of a decedent’s estate or a terminating income interest under ss. 738.301-738.706 and by:
(a) Including in net income all income from property used to discharge liabilities.
(b) Paying from income or principal, in the fiduciary’s discretion, fees of attorneys, accountants, and fiduciaries; court costs and other expenses of administration; and interest on death taxes. The fiduciary may pay those expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction under the Internal Revenue Code or comparable law of any state only to the extent the payment of those expenses from income will not cause the reduction or loss of the deduction.
(c) Paying from principal all other disbursements made or incurred in connection with the settlement of a decedent’s estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances, and death taxes and related penalties that are apportioned to the estate or terminating income interest by the will, the terms of the trust, or applicable law.
(3) If a beneficiary who receives a pecuniary devise outright is also entitled to receive interest or any other amount on the devise under the terms of the will or trust, the fiduciary shall distribute the interest or other amount from net income determined under subsection (2) or from principal to the extent net income is insufficient.
(4) A fiduciary shall distribute the net income remaining after distributions required under subsections (1)-(3) in the manner described in s. 738.202 to all other beneficiaries, including a beneficiary who receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.
(5) A fiduciary may not reduce principal or income receipts from property described in subsection (1) because of a payment described in s. 738.701 or s. 738.702 to the extent the will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property are determined by including all of the amounts the fiduciary receives or pays with respect to the property, whether those amounts accrued or became due before, on, or after the date of a decedent’s death or an income interest’s terminating event, and by making a reasonable provision for amounts the fiduciary believes the estate or terminating income interest may become obligated to pay after the property is distributed.
(1) In making an allocation or determination or exercising discretion under this chapter, a fiduciary shall do all of the following:
(a) Act in good faith, based on what is a fair and reasonable fee to all 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;
(c) Administer the trust or estate in accordance with the terms of the trust, even if there is a different provision in this chapter.
(d) Administer the trust or estate in accordance with this chapter, except to the extent that the terms of the trust provide otherwise or authorize the fiduciary to determine otherwise.
(2) A fiduciary’s allocation, determination, or exercise of discretion under this chapter is presumed to be fair and reasonable to all beneficiaries. A fiduciary may exercise a discretionary power of administration given to the fiduciary by the terms of the trust, and an exercise of the power that produces a result different from a result required or permitted by this chapter does not create an inference that the fiduciary abused the fiduciary’s discretion.
(3) A fiduciary shall:
(a) Add a receipt to principal, to the extent that the terms of the trust and this chapter do not allocate the receipt between income and principal;
(b) Charge a disbursement to principal, to the extent that the terms of the trust and this chapter do not allocate the disbursement between income and principal; and
(c) Within 65 days after the fiscal year ends, add any undistributed income to principal, unless otherwise provided by the terms of the trust.
(4) A fiduciary may exercise the power to adjust under s. 738.203(1), convert an income trust to a unitrust under ss. 738.301-738.310, change the percentage or method used to calculate a unitrust amount under ss. 738.301-738.310, or convert a unitrust to an income trust under ss. 738.301-738.310 if the fiduciary determines the exercise of the power will assist the fiduciary to administer the trust or estate impartially.
(5) The fiduciary must consider the following factors in making the determination in subsection (4), including:
(a) The terms of the trust.
(b) The nature, distribution standards, and expected duration of the trust.
(c) The effect of the allocation rules, including specific adjustments between income and principal, under ss. 738.301-738.416.
(d) The desirability of liquidity and regularity of income.
(e) The desirability of the preservation and appreciation of principal.
(f) The extent to which an asset is used or may be used by a beneficiary.
(g) The increase or decrease in the value of principal assets, reasonably determined by the fiduciary.
(h) Whether and to what extent the terms of the trust give the fiduciary power to accumulate income or invade principal or prohibit the fiduciary from accumulating income or invading principal.
(i) The extent to which the fiduciary has accumulated income or invaded principal in preceding accounting periods.
(j) The effect of current and reasonably expected economic conditions.
(k) The reasonably expected tax consequences of the exercise of the power.
(l) The identities and circumstances of the beneficiaries.
(6) Except as provided in ss. 738.301-738.310, 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.
Official source: Online Sunshine (Florida Legislature). Reproduced from public-domain Florida statutes; confirm against the official source for the current text. Not legal advice.