Florida Statutes 738.602 – Payments from deferred compensation plans, annuities, and retirement plans or accounts
Current as of: 2023 | Check for updates
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(1) As used in this section, the term:
(a) “Fund” means a private or commercial annuity, an individual retirement account, an individual retirement annuity, a deferred compensation plan, a pension plan, a profit-sharing plan, a stock-bonus plan, an employee stock-ownership plan, or another similar arrangement in which federal income tax is deferred.
Terms Used In Florida Statutes 738.602
- Accounting period: means a calendar year unless another 12-month period is selected by a fiduciary. See Florida Statutes 738.102
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Fiduciary: A trustee, executor, or administrator.
- Fiduciary: means a personal representative or a trustee. See Florida Statutes 738.102
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Income: means money or property that a fiduciary receives as current return from a principal asset. See Florida Statutes 738.102
- 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.
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, or any other legal or commercial entity or a government or governmental subdivision, agency, or instrumentality. See Florida Statutes 738.102
- Principal: means property held in trust for distribution to a remainder beneficiary when the trust terminates. See Florida Statutes 738.102
(b) “Income of the fund” means income that is determined according to subsection (2) or subsection (3).
(c) “Nonseparate account” means a fund for which the value of the participant’s or account owner’s right to receive benefits can be determined only by the occurrence of a date or event as defined in the instrument governing the fund.
(d) “Payment” means a distribution from a fund that a fiduciary may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payor in exchange for future payments. The term includes a distribution made in money or property from the payor’s general assets or from a fund created by the payor or payee.
(e) “Separate account” means a fund holding assets exclusively for the benefit of a participant or account owner and:
1. The value of such assets or the value of the separate account is ascertainable at any time; or
2. The administrator of the fund maintains records that show receipts and disbursements associated with such assets.
(2)(a) For a fund that is a separate account, income of the fund shall be determined:
2. As a unitrust amount calculated by multiplying the fair market value of the fund as of the first day of the first accounting period and, thereafter, as of the last day of the accounting period that immediately precedes the accounting period during which a payment is received by the percentage determined in accordance with s. 738.1041(2)(b)2.a. The fiduciary shall determine such percentage as of the first month that the fiduciary’s election to treat the income of the fund as a unitrust amount becomes effective. For purposes of this subparagraph, “fair market value” means the fair market value of the assets held in the fund as of the applicable valuation date determined as provided in this subparagraph. The fiduciary is not liable for good faith reliance upon any valuation supplied by the person or persons in possession of the fund. If the fiduciary makes or terminates an election under this subparagraph, the fiduciary shall make such disclosure in a trust disclosure document that satisfies the requirements of s. 736.1008(4)(c).
(b) The fiduciary may elect the method of determining the income of the fund pursuant to this subsection and may change the method of determining income of the fund for any future accounting period.
(3) For a fund that is a nonseparate account, income of the fund is a unitrust amount determined by calculating the present value of the right to receive the remaining payments under the Internal Revenue Code, 26 U.S.C. § 7520, as of the first day of the accounting period and multiplying it by the percentage determined in accordance with s. 738.1041(2)(b)2.a. The fiduciary shall determine the unitrust amount as of the first month that the fiduciary’s election to treat the income of the fund as a unitrust amount becomes effective.
(4) Except for those trusts described in subsection (5), the fiduciary shall allocate to income the lesser of the payment received from a fund or the income determined under subsection (2) or subsection (3). Any remaining amount of the payment shall be allocated to principal.
(5) For a trust that, in order to qualify for the estate or gift tax marital deduction under the Internal Revenue Code or comparable law of any state, entitles the spouse to all of the income of the trust, and the terms of the trust are silent as to the time and frequency for distribution of the income of the fund:
(a) For a fund that is a separate account, unless the spouse directs the fiduciary to leave the income of the fund in the fund, the fiduciary shall withdraw and pay to the spouse, at least annually:
1. All of the income of the fund determined in accordance with subparagraph (2)(a)1.; or
2. The income of the fund as a unitrust amount determined in accordance with subparagraph (2)(a)2.
(b) For a fund that is a nonseparate account, the fiduciary shall withdraw and pay to the spouse, at least annually, the income of the fund as a unitrust amount determined in accordance with subsection (3).
(6) This section does not apply to payments to which s. 738.603 applies.