§ 662.132 — Investments

Florida § 662.132

• Jurisdiction: Florida
• Title: XXXVIII
• Ch. 662: FAMILY TRUST COMPANIES

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(1) The assets forming the minimum capital account of a family trust company or licensed family trust company must: (a) Consist of cash, United States Treasury obligations, or any combination thereof. (b) Have an aggregate market value of at least 100 percent of the company’s required capital account, as specified in s. 662.124. If the aggregate market value of 100 percent of the company’s capital account is, at any time, less than the amount required under s. 662.124, the company has 5 business days to bring such capital account into compliance with s. 662.124.

(2) A family trust company or licensed family trust company may purchase or rent real or personal property for use in the conduct of the business and other activities of the company.

(3) Notwithstanding any other provision of law, a family trust company or licensed family trust company may invest funds for its own account, other than those required or allowed under subsection (1) or subsection (2), in any type or character of equity securities, debt securities, or other assets.

(4) Notwithstanding any other law, a family trust company or licensed family trust company may, while acting as a fiduciary, purchase directly from underwriters or broker-dealers or in the secondary market: (a) Bonds or other securities underwritten or brokered by: 1. The family trust company or licensed family trust company; 2. A family affiliate; or 3. A syndicate, including the family trust company, licensed family trust company, or family affiliate. (b) Securities of an investment company, including a mutual fund, closed-end fund, or unit investment trust, as defined under the federal Investment Company Act of 1940, for which the family trust company or licensed family trust company acts as an advisor, custodian, distributor, manager, registrar, shareholder servicing agent, sponsor, or transfer agent.

(5) The authority granted in subsection (4) may be exercised only if: (a) The investment is not expressly prohibited by the instrument, judgment, decree, or order establishing the fiduciary relationship. (b) The family trust company or licensed family trust company procures in writing the consent of any cofiduciaries with discretionary investment powers to the investment. (c) The family trust company or licensed family trust company discloses in writing to the person or persons to whom it sends account statements its intent to exercise the authority granted in subsection (4) before the first exercise of that authority, and each such disclosure reflects: 1. The nature of any interest the family trust company or licensed family trust company has, or is reasonably expected to have, in the underwriting or distribution of bonds or securities purchased. 2. The nature and amount of any fee or other compensation received, or reasonably expected to be received, by the family trust company or licensed family trust company in connection with the transaction. 3. The nature of the relationship between the family trust company or licensed family trust company and an investment company described in paragraph (4)(b). 4. The nature and amount of any fee or other compensation received, or reasonably expected to be received, by the family trust company or licensed family trust company for providing services to an investment company described in paragraph (4)(b).

(6) Subsections (4) and (5) do not affect the degree of prudence required of fiduciaries under the laws of this state. However, a purchase of bonds or securities pursuant to subsections (4) and (5) is not presumed to be affected by a conflict between the fiduciary’s personal and fiduciary interests if such purchase: (a) Is negotiated at a fair price. (b) Is in accordance with: 1. The interest of the qualified beneficiaries. 2. The purposes of the trusts. (c) Otherwise complies with: 1. The prudent investor rule in s. 518.11, or other prudent investor or similar rule under other applicable law, unless such compliance is waived in accordance with s. 518.11 or other applicable law. 2. The terms of the instrument, judgment, decree, or order establishing the fiduciary relationship.

(7) Notwithstanding subsections (1)-(6), a family trust company or licensed family trust company may not, while acting as a fiduciary, purchase a bond or security issued by the company or its parent, or a subsidiary company thereof or its parent, unless: (a) The family trust company or licensed family trust company is expressly authorized to do so by: 1. The terms of the instrument creating the trust; 2. A court order; 3. The written consent of the settlor of the trust for which the family trust company or licensed family trust company is serving as trustee; or 4. The written consent of every adult qualified beneficiary of the trust who, at the time of such purchase, is entitled to receive income under the trust or who would be entitled to receive a distribution of principal if the trust were terminated; and (b) The purchase of the security is at a fair price and complies with: 1. The prudent investor rule in s. 518.11 or other prudent investor or similar rule under other applicable law, unless compliance is waived in accordance with s. 518.11 or other applicable law. 2. The terms of the instrument, judgment, decree, or order establishing the fiduciary relationship.

(8) Except as otherwise expressly limited by this section, a family trust company or licensed family trust company, while acting as a fiduciary, is also authorized, without limiting any powers otherwise conferred on fiduciaries by law, to do any of the following, which are not presumed to be affected by a conflict between the fiduciary’s personal and fiduciary interests: (a) Make an equity investment in a closely held entity that may or may not be marketable and that is directly or indirectly owned or controlled by one or more family members. (b) Place a security transaction using a broker who is a family member. (c) Enter into an agreement with a family member who is the settlor or a qualified beneficiary of a trust with respect to the appointment of the family trust company or licensed family trust company as a fiduciary of the trust, or with respect to the compensation of the family trust company and licensed family trust company for service as a fiduciary. (d) Transact business with a family member. (e) Transact business with or invest in any asset of another trust, estate, guardianship, or conservatorship for which the family trust company or licensed family trust company is a fiduciary or in which a family member has an interest. (f) Deposit trust assets in a financial institution that is owned, controlled, or operated by one or more family members. (g) Purchase, sell, hold, own, or invest in a security, bond, real or personal property, stock, or other asset of a family member. (h) With or without adequate security, lend money to or borrow money from a family member or a trust, estate, or guardianship for which the family trust company or licensed family trust company serves as a fiduciary.

(9) If not inconsistent with and subject to the terms of subsections (4)-(8), the duty of loyalty under s. 736.0802 applies to family trust companies, licensed family trust companies, and foreign licensed family trust companies when serving as trustee of a trust whose administration is subject to chapter 736.

Legislative History

s. 23, ch. 2014-97; s. 10, ch. 2016-35.