§ 738.309 — Express unitrust

Florida § 738.309

• Jurisdiction: Florida
• Title: XLII
• Ch. 738: UNIFORM FIDUCIARY INCOME AND PRINCIPAL ACT

Text

(1) This section applies to a trust that, by its governing instrument, requires or allows income or net income to be calculated as a unitrust amount.

(2) The trustee of an express unitrust may determine the unitrust amount by reference to the net fair market value of the unitrust’s assets in 1 or more years.

(3) Distribution of a unitrust amount is considered a distribution of all of the net income of an express unitrust and is considered to be an income interest.

(4) The unitrust amount is considered to be a reasonable apportionment of the total return of an express unitrust.

(5) An express unitrust that provides or allows a distribution based on a unitrust rate in excess of 5 percent per year of the net fair market value of the unitrust assets is considered a distribution of all of the income of the unitrust and a distribution of principal of the unitrust to the extent that the distribution exceeds 5 percent per year.

(6) An express unitrust may provide a mechanism for changing the unitrust rate, similar to the mechanism provided under s. 738.306, based upon the factors noted in that section, and may provide for a conversion from a unitrust to an income trust or a reconversion of an income trust to a unitrust under s. 738.303.

(7) If an express unitrust does not specifically or by reference to s. 738.306 prohibit a power to change the unitrust rate or to convert to an income trust under s. 738.303, the trustee must have such power.

(8) The governing instrument of an express unitrust may grant the trustee discretion to adopt a consistent practice of treating capital gains as part of the unitrust amount to the extent that the unitrust amount exceeds the income determined as if the trust were not an express unitrust, or the governing instrument may specify the ordering of classes of income.

(9) Unless the terms of the express unitrust specifically provide otherwise as provided in subsection (8), the distribution of a unitrust amount is considered a distribution made from the following sources, which are listed in order of priority: (a) Net accounting income determined under this chapter as if the trust were not a unitrust; (b) Ordinary income not allocable to net accounting income; (c) Net realized short-term capital gains; (d) Net realized long-term capital gains; and (e) The principal of the trust.

(10) The governing instrument of an express unitrust may provide that the trustee may exclude assets used by the unitrust’s beneficiary, including, but not limited to, a residence property or tangible personal property, from the net fair market value of the unitrust’s assets for the purposes of computing the unitrust amount. The use of these assets may be considered equivalent to income or to the unitrust amount.

Legislative History

s. 18, ch. 2024-216.