Florida Banking October 2022

rather than having to place the information in the body of the email itself. For family trust companies, this clarifies that when a trustee sends attached or hyperlinked documents, the electronic website/portal statutory requirements do not apply. Limiting Duplication Another bill, HB 1502, passed through the legislature and was signed into law recently, impacting several other areas of trust law. HB 1502, in part, provides that a separate legal action is not required to be filed against a defendant who dies, as long as a motion is made and accepted by the court which substitutes the proper party (i.e., the decedent substituted for the estate of the decedent). The bill also provides a similar provision for binding arbitrations where a motion may be made to require a decedent’s estate to be compelled to submit to the arbitration process, just as the decedent would have been subject to the process. This new law will assist creditors in bringing claims without incurring the additional expense of restating their claim in a separate legal action — solely because of the debtor’s death. Clarifying SLATS and Controlling Terms HB 1502 also addresses a unique situation in Florida where a settlor looks to create a lifetime trust for their spouse’s benefit (also known as a Spousal Lifetime Access Trust or SLAT). Previous to the passage of this legislation, if that spouse-beneficiary predeceased the settlor, there are unsavory tax consequences and the potential that creditors may take from the money that reverts back to the settlor. Because the SLAT qualifies as a completed gift, it would be philosophically unfair to rewind the tax advantages and creditor protections, solely because the beneficiary spouse unexpectedly predeceased the settlor. An excellent explanation of SLATS and the need for adoption of this provision in Florida law is provided in another recently published Florida Banking article.¹ Finally, HB 1502 specifically allows that a trust document may dictate the terms of a trustee’s

resignation. The new law allows that a trustee, if the terms of the trust so dictate, may resign in less than 30 days with mandatory proper notice provided to co-trustees, successor trustees who have accepted the appointment or to whomever has successor trustee appointment authority. Next Steps While the upcoming legislative session is still several months away, the FBA is already considering new trust legislative proposals for the 2023 Legislative Session. Thus far, we are anticipating bills to be filed creating a uniform statutory trustee resignation process and a statutory process of attaching a lien to a debtor’s motor vehicle title. Stay on the lookout for more information regarding these proposals and others in the near future. Florida’s physical , pol i t ical and business environments all continue to assist us in attracting significant new wealth to our borders from other states. We need to continue to move in a positive policy direction to keep us competitive in the race to attract trust business for our state. As the day-to-day practitioner in the trust space, we are counting on you to advise us on how to best accomplish that goal. If you have an idea or concept regarding our focus for advocacy to make Florida’s laws more trust friendly, I would welcome the opportunity to discuss it with you. Over the years, we have received incredibly insightful feedback from our trust members that has led to FBA legislative proposals and ultimately passage of good, common sense trust legislation. We need your input to help make Florida the best it can be! ¹Leveling the Playing Field to Keep Florida SLATS in Florida: Proposed Amendment to Fla. Stat. §736.0505(3) Explained, by Michael M. Rubenstein, April 2022 edition of Florida Banking Magazine. Kenneth Pratt serves as FBA’s Senior Vice President of Governmental Affairs and is the association’s principal lobbyist on issues involving trust and wealth management legislation.

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