01 Apr Rules of Construction of Trusts Under Florida’s Trust Code
Rules of Construction of Trusts Under Florida’s Trust Code
RULES OF CONSTRUCTION
736.1101 Rules of construction; general provisions.
736.1102 Construction of terms.
736.1103 Gifts to multigeneration classes to be per stirpes.
736.1104 Killer not entitled to receive property or other benefits by reason of victim’s death.
736.1105 Dissolution of marriage; effect on revocable trust.
736.1106 Antilapse; survivorship with respect to future interests under terms of inter vivos and testamentary trusts; substitute takers.
736.1107 Change in securities; accessions; nonademption.
736.1108 Penalty clause for contest.
736.1101 Rules of construction; general provisions.—Except as provided in s. 736.0105(2):
(1) The intent of the settlor as expressed in the terms of the trust controls the legal effect of the dispositions made in the trust.
(2) The rules of construction as expressed in this part shall apply unless a contrary intent is indicated by the terms of the trust.
736.1102 Construction of terms.—The laws used to determine paternity and relationships for the purposes of intestate succession apply when determining whether class gift terminology and terms of relationship include adopted persons and persons born out of wedlock.
736.1103 Gifts to multigeneration classes to be per stirpes.—Class gifts to descendants, issue, and other multigeneration classes shall be per stirpes.
736.1104 Killer not entitled to receive property or other benefits by reason of victim’s death.—
(1) A beneficiary of a trust who unlawfully and intentionally kills or unlawfully and intentionally participates in procuring the death of the settlor or another person on whose death such beneficiary’s interest depends, is not entitled to any trust interest, including homestead, dependent on the victim’s death, and such interest shall devolve as though the killer had predeceased the victim.
(2) A final judgment of conviction of murder in any degree is conclusive for the purposes of this section. In the absence of a murder conviction in any degree, the court may determine by the greater weight of the evidence whether the killing was unlawful and intentional for purposes of this section.
736.1105 Dissolution of marriage; effect on revocable trust.—Unless the trust instrument or the judgment for dissolution of marriage or divorce expressly provides otherwise, if a revocable trust is executed by a husband or wife as settlor prior to annulment of the marriage or entry of a judgment for dissolution of marriage or divorce of the settlor from the settlor’s spouse, any provision of the trust that affects the settlor’s spouse will become void upon annulment of the marriage or entry of the judgment of dissolution of marriage or divorce and any such trust shall be administered and construed as if the settlor’s spouse had died on the date of the annulment or on entry of the judgment for dissolution of marriage or divorce.
736.1106 Antilapse; survivorship with respect to future interests under terms of inter vivos and testamentary trusts; substitute takers.—
(1) As used in this section, the term:
(a) “Beneficiary” means the beneficiary of a future interest and includes a class member if the future interest is in the form of a class gift.
(b) “Distribution date,” with respect to a future interest, means the time when the future interest is to take effect. The distribution date need not occur at the beginning or end of a calendar day, but can occur at a time during the course of a day. The distribution date refers to the time that the right to possession or enjoyment arises and is not necessarily the time that any benefit of the right is realized.
(c) “Future interest” includes an alternative future interest and a future interest in the form of a class gift.
(d) “Future interest under the terms of a trust” means a future interest created by an inter vivos or testamentary transfer to an existing trust or creating a trust or by an exercise of a power of appointment to an existing trust directing the continuance of an existing trust, designating a beneficiary of an existing trust, or creating a trust.
(e) “Surviving beneficiary” or “surviving descendant” means a beneficiary or a descendant who did not predecease the distribution date or is not deemed to have predeceased the distribution date by operation of law.
(2) A future interest under the terms of a trust is contingent upon the beneficiary surviving the distribution date. Unless a contrary intent appears in the trust instrument, if a beneficiary of a future interest under the terms of a trust fails to survive the distribution date, and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary’s surviving descendants. They take per stirpes the property to which the beneficiary would have been entitled if the beneficiary had survived the distribution date.
(3) In the application of this section:
(a) Words of survivorship attached to a future interest are a sufficient indication of an intent contrary to the application of this section.
(b) A residuary clause in a will is not a sufficient indication of an intent contrary to the application of this section, whether or not the will specifically provides that lapsed or failed devises are to pass under the residuary clause.
(4) If, after the application of subsections (2) and (3), there is no surviving taker, the property passes in the following order:
(a) If the future interest was created by the exercise of a power of appointment, the property passes under the donor’s gift-in-default clause, if any, which clause is treated as creating a future interest under the terms of a trust.
(b) If no taker is produced by the application of paragraph (a) and the trust was created in a nonresiduary devise or appointment in the transferor’s will, the property passes under the residuary clause in the transferor’s will. For purposes of this section, the residuary clause is treated as creating a future interest under the terms of a trust.
(c) If no taker is produced by the application of paragraph (a) or paragraph (b), the property passes to those persons, including the state, and in such shares as would succeed to the transferor’s intestate estate under the intestate succession law of the transferor’s domicile if the transferor died when the disposition is to take effect in possession or enjoyment.
For purposes of paragraphs (b) and (c), the term “transferor” with respect to a future interest created by the exercise of a power of appointment, means the donor if the power was a nongeneral power and the donee if the power was a general power.
(5) Subsections (1)-(4) apply to all trusts other than trusts that were irrevocable before the effective date of this code. Sections 732.603, 732.604, and 737.6035, as they exist on June 30, 2007, continue to apply to other trusts executed on or after June 12, 2003.
736.1107 Change in securities; accessions; nonademption.—A gift of specific securities, rather than their equivalent value, entitles the beneficiary only to:
(1) As much of the gifted securities of the same issuer held by the trust estate at the time of the occurrence of the event entitling the beneficiary to distribution.
(2) Any additional or other securities of the same issuer held by the trust estate because of action initiated by the issuer, excluding any acquired by exercise of purchase options.
(3) Securities of another issuer held by the trust estate as a result of a merger, consolidation, reorganization, or other similar action initiated by the original issuer.
736.1108 Penalty clause for contest.—
(1) A provision in a trust instrument purporting to penalize any interested person for contesting the trust instrument or instituting other proceedings relating to a trust estate or trust assets is unenforceable.
(2) This section applies to trusts created on or after October 1, 1993. For purposes of this subsection, a revocable trust shall be treated as created when the right of revocation terminates.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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