Review of Florida Statutes 689.07 and 689.071

A. The difference between Florida Statutes Section 689.071 and Florida Statutes Section 689.07.

1. Section 689.07 covers that situation in which a grantee is named and the word "trustee" appears after his name with no further mention of a trust agreement or beneficiaries.

2. The thrust of Section 689.07 is to permit transactions to be recorded in the public records in which trust capacity has been mentioned but to simplify those conveyances by treating the situation as if no trustee reference was used.

3. The important portion of Section 689.07 reads as follows:

4. The statute provides further that it is only operative if there does not appear of record a declaration of trust.

5. The statute would also be inapplicable to any situation in which reference were made in the deed or in any other recorded instrument to the beneficiaries for whom the trustee held title.

6. An example of the normal situation under Section 689.07 is a conveyance from a grantor to Richard Roe, as Trustee. Under the statute, Richard Roe would be deemed to own, individually, fee simple title to the property. Richard Roe would convey title individually and as trustee.

B. Section 689.071 is a codification of the land trust concept in which reference is made to a trust number and an unrecorded trust agreement. Courts have consistently held that Section 689.071 is a codification of land trust case law. The leading case in Florida is Ferraro v. Parker, 229 So.2d 621 (Fla. 2d DCA 1969).

C. Every person desiring to establish a trust should review both Sections 689.07 and 689.071 to become familiar with the differences between the two statutes.

D. Note that the case of In re: Raborn, 16 Fla. L. Weekly Fed. D 257 (Bkrtcy. S.D. Fl. 2003, dismissed 203 WL 22172199 (Aug. 11, 2003) 11^th Cir. 2003) cast doubt on title to land created pursuant to ' 689.071. In Raborn, title to certain real property was conveyed to Douglas K. Raborn, "as Trustee under the Raborn Farm Trust Agreement dated January 25, 1991." The deed granted the grantee full power and authority to deal with the property. The trust agreement was not recorded.

Raborn filed for Chapter 7 bankruptcy. The bankruptcy court dismissed the bankruptcy trustee' s claim that the real property was vested in the debtor. On appeal the United States District Court reversed and vacated the bankruptcy court' s order.

The district court stated that while the deed added the words " as trustee" to the name of the grantee, it did not name the beneficiaries of the trust and did not identify the " nature and purposes" of the trust. The court therefore held that the debtor took fee simple title to the property by virtue of Sec. 689.07, F.S., and the bankruptcy trustee succeeded to that title.

On appeal the United States Court of Appeals for the Eleventh Circuit dismissed the appeal for lack of jurisdiction, holding that the district court' s order reversing the bankruptcy court' s order was not final and appealable. In 2004, the Florida Legislative in response to Raborn and a request by the Real Property Probate and Trust Law Section of the Florida Bar, added an amendment to the statute expressly providing that language in a conveyance in the deed identifying the trust by either name or date constituted an effective conveyance into a land trust and stated that the amendment "was intended to clarify existing law and shall apply retroactively." Subsequent to the 2004 amendment, the effect of the deed was again challenged and, in response to certified questions from the Eleventh Circuit, the Supreme Court of Florida concluded that under Section 689.07(1), F.S., as existed prior to the 2004 amendment, a deed that simply refers to the grantee as "trustee" conveys a fee simple estate in the grantee with three exceptions. These three exceptions are: (1) the deed names the beneficiaries or states the nature and purpose of the trust: (2) the deed expresses a contrary intention; or (3) a declaration of trust is of record. The court concluded that the deed in question falls under the "contrary intention" exception and Section 689.07(1), F.S., did not operate to declare that the deed, which identified the trust by name and date, conveyed a fee simple estate to the grantee but rather Raborn held mere legal title as trustee. Raborn v. Menotte, 33 Fla. L. Weekly, 521 (Fla. 2008), and the Eleventh Circuit Court has certified two questions to the Florida Supreme Court:

1) Whether under Florida Statutes 689.07(1) as it existed before the 2004 amendment, the deed to a named trustee of an express trust identified in the deed conveyed legal title to the trustee.

If the above question is answered in the negative, then the following question is certified:

2) Whether the 2004 amendment applies retroactively and causes the deed at issue to convey title to the trustee. The Circuit Court expressed doubts about the retroactive application under state law due to what the Court felt were conflicting statements about retroactivity in the Senate Staff Analysis and Economic Report accompanying the bill. The Court also stated in a footnote that even if the Florida Supreme Court holds that the amendment was intended to apply retroactively we would need to answer for ourselves the question of whether federal law would allow retroactive application of the statute in this case, even if state law would allow it. In re: Raborn, 470 F3d 1319 (November 28, 2006) (11^th Cir. 2003).

The Raborn case flew in the face of clear intent of Sec. 689.071, F.S. and well- established case law. The 2006 revisions to the act specifically addressed, and expressly countered, the reasoning of the Raborn case by providing that " A trust relating to real estate does not fail and any use relating to real estate may not be defeated because beneficiaries are not named in the recorded deed of conveyance to the trustee or because duties are not imposed on the trustee." Section 689.071.8(g), F.S.