Florida Statutes 738.502 – Disbursement from principal
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(1) Subject to s. 738.505, and except as otherwise provided in s. 738.601(3)(b), a fiduciary shall disburse all of the following from principal:
(a) The balance of the disbursements described in s. 738.501(1) and (3), after application of s. 738.501(2).
Terms Used In Florida Statutes 738.502
- 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.
- Distribution: means a payment or transfer by a fiduciary to a beneficiary in the beneficiary's capacity as a beneficiary, without consideration other than the beneficiary's right to receive the payment or transfer under the terms of the trust as defined in this section, will, life estate, or term interest. See Florida Statutes 738.102
- Estate: means a decedent's estate, including the property of the decedent as the estate is originally constituted and the property of the estate as it exists at any time during administration. See Florida Statutes 738.102
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: includes a trustee, a trust director as defined in…. See Florida Statutes 738.102
- Income: means money or other property a fiduciary receives as current return from principal. See Florida Statutes 738.102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Principal: means property held in trust for distribution to, production of income for, or use by a current or successor beneficiary. See Florida Statutes 738.102
- Trust: includes an express trust, whether private or charitable, with additions to the trust, wherever and however created; and a trust created or determined by a judgment or decree under which the trust is to be administered in the manner of an express trust. See Florida Statutes 738.102
(b) The fiduciary‘s compensation calculated on principal as a fee for acceptance, distribution, or termination.
(c) A payment of an expense to prepare for or execute a sale or other disposition of property.
(d) A payment on the principal of a trust debt.
(e) A payment of an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily principal, including a proceeding to construe the terms of the trust or protect property.
(f) A payment of a premium for insurance, including title insurance, not described in s. 738.501(4) of which the fiduciary is the owner and beneficiary.
(g) A payment of estate, inheritance, and other transfer taxes, including penalties, apportioned to the trust.
(h) A payment related to environmental matters including:
1. Reclamation;
2. Assessing environmental conditions;
3. Remedying and removing environmental contamination;
4. Monitoring remedial activities and the release of substances;
5. Preventing future releases of substances;
6. Collecting amounts from persons liable or potentially liable for the costs of the activities described in subparagraphs 1.-5.;
7. Penalties imposed under environmental laws or regulations;
8. Other actions to comply with environmental laws or regulations;
9. Statutory or common law claims by third parties; and
10. Defending claims based on environmental matters.
(i) A payment of a premium for insurance for matters described in paragraph (h).
(2) If a principal asset is encumbered with an obligation that requires income from the asset to be paid directly to a creditor, the fiduciary must transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.