Florida Statutes 736.04114 – Limited judicial construction of irrevocable trust with federal tax provisions
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(1) Upon the application of a trustee or any qualified beneficiary of a trust, a court at any time may construe the terms of a trust that is not then revocable to define the respective shares or determine beneficiaries, in accordance with the intention of the settlor, if a disposition occurs during the applicable period and the trust contains a provision that:
(a) Includes a formula disposition referring to the “unified credit,” “estate tax exemption,” “applicable exemption amount,” “applicable credit amount,” “applicable exclusion amount,” “generation-skipping transfer tax exemption,” “GST exemption,” “marital deduction,” “maximum marital deduction,” “unlimited marital deduction,” or “maximum charitable deduction”;
Terms Used In Florida Statutes 736.04114
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Marital deduction: The deduction(s) that can be taken in the determination of gift and estate tax liabilities because of the existence of a marriage or marital relationship.
- Trustee: A person or institution holding and administering property in trust.
(b) Measures a share of a trust based on the amount that can pass free of federal estate tax or the amount that can pass free of federal generation-skipping transfer tax;
(c) Otherwise makes a disposition referring to a charitable deduction, marital deduction, or another provision of federal estate tax or generation-skipping transfer tax law; or
(d) Appears to be intended to reduce or minimize federal estate tax or generation-skipping transfer tax.
(2) For the purpose of this section:
(a) “Applicable period” means a period beginning January 1, 2010, and ending on the end of the day on the earlier of:
1. December 31, 2010; or
2. The day before the date that an act becomes law which repeals or otherwise modifies or has the effect of repealing or modifying s. 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001.
(b) A “disposition occurs” when an interest takes effect in possession or enjoyment.
(3) In construing the trust, the court shall consider the terms and purposes of the trust, the facts and circumstances surrounding the creation of the trust, and the settlor’s probable intent. In determining the settlor’s probable intent, the court may consider evidence relevant to the settlor’s intent even though the evidence contradicts an apparent plain meaning of the trust instrument.
(4) This section does not apply to a disposition that is specifically conditioned upon no federal estate or generation-skipping transfer tax being imposed.
(5) Unless otherwise ordered by the court, during the applicable period and without court order, the trustee administering a trust containing one or more provisions described in subsection (1) may:
(a) Delay or refrain from making any distribution;
(b) Incur and pay fees and costs reasonably necessary to determine its duties and obligations, including compliance with provisions of existing and reasonably anticipated future federal tax laws; and
(c) Establish and maintain reserves for the payment of these fees and costs and federal taxes.
The trustee is not liable for its actions as provided in this subsection which are made or taken in good faith.
(6) The provisions of this section are in addition to, and not in derogation of, rights under this code or the common law to construe a trust.
(7) This section is remedial in order to provide a new or modified legal remedy. This section applies retroactively and is effective as of January 1, 2010.