Florida Regulations 69K-7.020: Treatment of Trusts Under Chapters 497 and 639, F.S
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(1) An “”old Florida Statutes Chapter 497, merchandise trust”” is defined as a trust created and approved on or before September 30, 1993, pursuant to Chapter 72-78, Laws of Florida, or as thereafter amended, for the deposit of proceeds from preneed contracts for burial services or related merchandise.
(2) A “”new Florida Statutes Chapter 497, preneed trust”” is defined as a trust created and approved on or after October 1, 1993, pursuant to Chapter 93-399, Laws of Florida, or as thereafter amended, for the deposit of proceeds from preneed contracts for funeral services, burial services, or related merchandise.
(3) A “”Florida Statutes Chapter 639, funeral trust”” is defined as a trust created and approved on or before September 30, 1993, pursuant to Chapter 77-438, Laws of Florida, or as thereafter amended, for the deposit of proceeds from preneed contracts for funeral services or related merchandise.
(4) The Board shall have jurisdiction over all old Florida Statutes Chapter 497, merchandise trusts, new Florida Statutes Chapter 497, preneed trusts, chapter 639, F.S., funeral trusts, and all other trusts created pursuant to Florida Statutes Chapter 497, in existence on October 1, 1993, or created thereafter.
(5) All Florida Statutes Chapter 639, funeral trusts shall retain the same trustee powers and trust provisions as authorized by Florida Statutes Chapter 639, on September 30, 1993, as to all preneed funeral contracts entered into prior to September 30, 1993, even though said contracts do not pay out until after October 1, 1993.
(6) Each preneed licensee, settlor or trustor may change the trustee of any Florida Statutes Chapter 639, funeral trust as provided in Florida Statutes Chapter 497, (1993). Nevertheless, the trust provisions and trustee powers shall remain as they were in the Florida Statutes Chapter 639, funeral trust agreement and related documents.
(7) A settlor or trustor may transfer assets from one Florida Statutes Chapter 639, funeral trust upon the approval of the Board provided:
(a) The terms of the receiving trust do not violate any terms and conditions of the contracts or rights of the contract purchaser which provide the funds to be transferred;
(b) The preneed licensee or the trustee, as appropriate, acknowledges in writing its responsibilities under the trust and contract documents including its ability to segregate contracts by type to ensure that proper payment is made upon the death of the beneficiary or proper refund is made upon cancellation of a contract; and
(c) The Board determines that such transfer will not impair the rights of the contract purchaser.
(8) No post-October 1, 1993, preneed contract may be trusted under a Florida Statutes Chapter 639, funeral trust. Except as provided in subsection (9) of this rule, preneed contracts dated prior to October 1, 1993, which have not been completely paid by the contract purchaser shall continue to be trusted to the proper Florida Statutes Chapter 639, funeral trust or the appropriate old Florida Statutes Chapter 497, merchandise trust.
(9) A settlor or trustor may submit a new trust agreement for approval by the Board and transfer thereto assets from a Florida Statutes Chapter 639, funeral trust or assets from an old Florida Statutes Chapter 497, merchandise trust so long as all trust provisions and trustee powers are in conformity with Florida Statutes Chapter 497 All such transfers shall be approved by the Board provided that the terms set forth in paragraphs (7)(a) through (c) of this rule are complied with.
(10) In all Florida Statutes Chapter 639, funeral trusts or old chapter 497, F.S., merchandise trusts where compliance with the provisions of Chapters 215 or 497, F.S., would result in a potential financial loss to the trust assets, any such sale or transfer of assets, that would result in the potential loss must be first approved by the Board according to a submitted plan of sale or transfer.
(11) All new Florida Statutes Chapter 497, funeral trust agreements and other trusts created pursuant to Florida Statutes Chapter 497, submitted for approval of the Board must be in conformity with all provisions of Florida Statutes Chapter 497, as now existing or as hereinafter amended.
(12) All cemetery care and maintenance trust fund agreements existing prior to October 1, 1993, shall remain effective, but all of the provisions of Florida Statutes Chapter 497, shall immediately apply to these trust agreements and the trustee powers shall be those provided in Florida Statutes Chapter 497
(13) All cemetery pre-construction trust fund agreements existing prior to October 1, 1993, shall remain effective but all of the provisions of Florida Statutes Chapter 497, shall immediately apply and the trustee’s powers shall be those provided in Florida Statutes Chapter 497, except:
(a) The allocation of investments therein need not be in compliance until September 30, 1995,
(b) The trusting formula on contracts dated prior to October 1, 1993, shall be the formula in effect on September 30, 1993; and
(c) The trusting formula on contracts dated after October 1, 1993, shall be in conformity with Florida Statutes Chapter 497
(14) If an asset is transferred from one trust to another as provided herein, then the asset in its entirety including any income derived therefrom must be transferred to the successor trust.
Rulemaking Authority 497.103 FS. Law Implemented 497.266, 497.267, 497.268, 497.269, 497.272, 497.457, 497.458, 497.459, 497.460, 497.464 FS. History-New 4-11-95, Formerly 3F-7.020.
Terms Used In Florida Regulations 69K-7.020
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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
- Contract: A legal written agreement that becomes binding when signed.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Trustee: A person or institution holding and administering property in trust.
- Trustor: The person who makes or creates a trust. Also known as the grantor or settlor.
(3) A “”Florida Statutes Chapter 639, funeral trust”” is defined as a trust created and approved on or before September 30, 1993, pursuant to Chapter 77-438, Laws of Florida, or as thereafter amended, for the deposit of proceeds from preneed contracts for funeral services or related merchandise.
(4) The Board shall have jurisdiction over all old Florida Statutes Chapter 497, merchandise trusts, new Florida Statutes Chapter 497, preneed trusts, chapter 639, F.S., funeral trusts, and all other trusts created pursuant to Florida Statutes Chapter 497, in existence on October 1, 1993, or created thereafter.
(5) All Florida Statutes Chapter 639, funeral trusts shall retain the same trustee powers and trust provisions as authorized by Florida Statutes Chapter 639, on September 30, 1993, as to all preneed funeral contracts entered into prior to September 30, 1993, even though said contracts do not pay out until after October 1, 1993.
(6) Each preneed licensee, settlor or trustor may change the trustee of any Florida Statutes Chapter 639, funeral trust as provided in Florida Statutes Chapter 497, (1993). Nevertheless, the trust provisions and trustee powers shall remain as they were in the Florida Statutes Chapter 639, funeral trust agreement and related documents.
(7) A settlor or trustor may transfer assets from one Florida Statutes Chapter 639, funeral trust upon the approval of the Board provided:
(a) The terms of the receiving trust do not violate any terms and conditions of the contracts or rights of the contract purchaser which provide the funds to be transferred;
(b) The preneed licensee or the trustee, as appropriate, acknowledges in writing its responsibilities under the trust and contract documents including its ability to segregate contracts by type to ensure that proper payment is made upon the death of the beneficiary or proper refund is made upon cancellation of a contract; and
(c) The Board determines that such transfer will not impair the rights of the contract purchaser.
(8) No post-October 1, 1993, preneed contract may be trusted under a Florida Statutes Chapter 639, funeral trust. Except as provided in subsection (9) of this rule, preneed contracts dated prior to October 1, 1993, which have not been completely paid by the contract purchaser shall continue to be trusted to the proper Florida Statutes Chapter 639, funeral trust or the appropriate old Florida Statutes Chapter 497, merchandise trust.
(9) A settlor or trustor may submit a new trust agreement for approval by the Board and transfer thereto assets from a Florida Statutes Chapter 639, funeral trust or assets from an old Florida Statutes Chapter 497, merchandise trust so long as all trust provisions and trustee powers are in conformity with Florida Statutes Chapter 497 All such transfers shall be approved by the Board provided that the terms set forth in paragraphs (7)(a) through (c) of this rule are complied with.
(10) In all Florida Statutes Chapter 639, funeral trusts or old chapter 497, F.S., merchandise trusts where compliance with the provisions of Chapters 215 or 497, F.S., would result in a potential financial loss to the trust assets, any such sale or transfer of assets, that would result in the potential loss must be first approved by the Board according to a submitted plan of sale or transfer.
(11) All new Florida Statutes Chapter 497, funeral trust agreements and other trusts created pursuant to Florida Statutes Chapter 497, submitted for approval of the Board must be in conformity with all provisions of Florida Statutes Chapter 497, as now existing or as hereinafter amended.
(12) All cemetery care and maintenance trust fund agreements existing prior to October 1, 1993, shall remain effective, but all of the provisions of Florida Statutes Chapter 497, shall immediately apply to these trust agreements and the trustee powers shall be those provided in Florida Statutes Chapter 497
(13) All cemetery pre-construction trust fund agreements existing prior to October 1, 1993, shall remain effective but all of the provisions of Florida Statutes Chapter 497, shall immediately apply and the trustee’s powers shall be those provided in Florida Statutes Chapter 497, except:
(a) The allocation of investments therein need not be in compliance until September 30, 1995,
(b) The trusting formula on contracts dated prior to October 1, 1993, shall be the formula in effect on September 30, 1993; and
(c) The trusting formula on contracts dated after October 1, 1993, shall be in conformity with Florida Statutes Chapter 497
(14) If an asset is transferred from one trust to another as provided herein, then the asset in its entirety including any income derived therefrom must be transferred to the successor trust.
Rulemaking Authority 497.103 FS. Law Implemented 497.266, 497.267, 497.268, 497.269, 497.272, 497.457, 497.458, 497.459, 497.460, 497.464 FS. History-New 4-11-95, Formerly 3F-7.020.