| |
| |
| |
|
|
AN ACT
|
|
|
relating to trusts. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Section 41.0021(a), Property Code, is amended to |
|
|
read as follows: |
|
|
(a) In this section, "qualifying trust" means an express |
|
|
trust: |
|
|
(1) in which the instrument or court order creating |
|
|
the express trust, an instrument transferring property to the |
|
|
trust, or any other agreement that is binding on the trustee |
|
|
provides that a settlor or beneficiary of the trust has the right |
|
|
to: |
|
|
(A) revoke the trust without the consent of |
|
|
another person other than a spouse who is also a settlor of the |
|
|
trust; |
|
|
(B) exercise an inter vivos general power of |
|
|
appointment over the property that qualifies for the homestead |
|
|
exemption, either alone or when aggregated with property subject to |
|
|
an inter vivos general power of appointment held by a spouse who is |
|
|
also a settlor of the trust; or |
|
|
(C) use and occupy the residential property as |
|
|
the settlor's or beneficiary's principal residence at no cost, or |
|
|
rent free and without charge, except for [to the settlor or |
|
|
beneficiary, other than payment of] taxes and other costs and |
|
|
expenses specified in the instrument or court order: |
|
|
(i) for the life of the settlor or |
|
|
beneficiary; |
|
|
(ii) for the shorter of the life of the |
|
|
settlor or beneficiary or a term of years specified in the |
|
|
instrument or court order; or |
|
|
(iii) until the date the trust is revoked or |
|
|
terminated by an instrument or court order that describes the |
|
|
property with sufficient certainty to identify the property and |
|
|
that is recorded in the real property records of the county in which |
|
|
the property is located [and that describes the property with |
|
|
sufficient certainty to identify the property]; and |
|
|
(2) the trustee of which acquires the property in an |
|
|
instrument of title or under a court order that: |
|
|
(A) describes the property with sufficient |
|
|
certainty to identify the property and the interest acquired; and |
|
|
(B) is recorded in the real property records of |
|
|
the county in which the property is located. |
|
|
SECTION 2. Section 112.035, Property Code, is amended by |
|
|
adding Subsections (f-1), (f-2), and (f-3) to read as follows: |
|
|
(f-1) A beneficiary of the trust or the estate of a |
|
|
beneficiary of the trust may not be considered to be a settlor |
|
|
merely because the beneficiary, in any capacity: |
|
|
(1) held or exercised a testamentary power of |
|
|
appointment other than a general power of appointment; |
|
|
(2) held a testamentary general power of appointment; |
|
|
or |
|
|
(3) exercised a testamentary general power of |
|
|
appointment in favor of or for the benefit of the takers in default |
|
|
of the appointive assets. |
|
|
(f-2) If a beneficiary of the trust exercised a testamentary |
|
|
general power of appointment in favor of or for the benefit of any |
|
|
appointee other than the takers in default of the appointive |
|
|
assets, the appointive assets are: |
|
|
(1) subject to the claims of creditors of the |
|
|
beneficiary, but only to the extent the beneficiary's own property |
|
|
is insufficient to meet the beneficiary's debts; and |
|
|
(2) unless appointed to the beneficiary's estate, not |
|
|
subject to: |
|
|
(A) administration as a part of the beneficiary's |
|
|
estate; |
|
|
(B) recovery by the personal representative of |
|
|
the beneficiary's estate, except as provided by Section 2207B, |
|
|
Internal Revenue Code of 1986; or |
|
|
(C) the payment of taxes or administration |
|
|
expenses of the beneficiary's estate. |
|
|
(f-3) For the purposes of Subsections (f-1) and (f-2), |
|
|
"general power of appointment" has the meaning assigned by Section |
|
|
2041(b)(1), Internal Revenue Code of 1986. |
|
|
SECTION 3. Sections 112.036(b) and (c), Property Code, are |
|
|
amended to read as follows: |
|
|
(b) For purposes of this section, the effective date [of a |
|
|
trust] is the date the governing instrument creating an interest in |
|
|
the trust becomes irrevocable with respect to that interest. If an |
|
|
interest in one trust is distributed to another trust with a |
|
|
different effective date, the effective date of that interest in |
|
|
the second trust becomes the earlier of the effective dates of the |
|
|
two trusts. |
|
|
(c) An interest in a trust must vest, if at all: |
|
|
(1) [not later than 300 years after the effective date |
|
|
of the trust,] if the effective date [of the trust] is on or after |
|
|
September 1, 2021, not later than the later of: |
|
|
(A) 300 years after the effective date; or |
|
|
(B) 21 years after some life in being at the time |
|
|
of the effective date, plus a period of gestation; or |
|
|
(2) if the effective date is before September 1, 2021, |
|
|
except as provided by Subsection (d), not later than 21 years after |
|
|
some life in being at the time of the effective date [creation of |
|
|
the interest], plus a period of gestation [, if the effective date |
|
|
of the trust is before September 1, 2021]. |
|
|
SECTION 4. Sections 112.0715(a) and (b), Property Code, are |
|
|
amended to read as follows: |
|
|
(a) A second trust may be created by a distribution of |
|
|
principal under Section 112.072 or 112.073 to a second trust that |
|
|
retains the name used by the first trust. The second trust may |
|
|
retain, subject to applicable federal law, the tax identification |
|
|
number of the first trust [created under the same trust instrument |
|
|
as the first trust from which the principal is distributed or to a |
|
|
trust created under a different trust instrument]. |
|
|
(b) If a second trust is created by a distribution of |
|
|
principal under Section 112.072 or 112.073 to a trust that retains |
|
|
[created under] the name of [same trust instrument as] the first |
|
|
trust [from which the principal is distributed], the property is |
|
|
not required to be retitled. |
|
|
SECTION 5. Section 115.014(b), Property Code, is amended to |
|
|
read as follows: |
|
|
(b) At any point in a proceeding a court may appoint an |
|
|
attorney ad litem to represent any interest that the court |
|
|
considers necessary, including an attorney ad litem to defend an |
|
|
action under Section 114.083 for a beneficiary of the trust who is a |
|
|
minor or who has been adjudged incompetent, if the court determines |
|
|
that representation of the interest otherwise would be inadequate. |
|
|
SECTION 6. Section 112.0715(c), Property Code, is repealed. |
|
|
SECTION 7. Sections 112.0715(a) and (b), Property Code, as |
|
|
amended by this Act, are intended by the legislature to be a |
|
|
codification of the common law of this state in effect immediately |
|
|
before the effective date of this Act. |
|
|
SECTION 8. Except as otherwise provided by this Act, the |
|
|
changes in law made by this Act apply to a trust created before, on, |
|
|
or after the effective date of this Act. |
|
|
SECTION 9. This Act takes effect immediately if it receives |
|
|
a vote of two-thirds of all the members elected to each house, as |
|
|
provided by Section 39, Article III, Texas Constitution. If this |
|
|
Act does not receive the vote necessary for immediate effect, this |
|
|
Act takes effect September 1, 2023. |
| |
| |
| |
______________________________ |
______________________________ |
| |
President of the Senate |
Speaker of the House |
| |
| |
|
|
I certify that H.B. No. 2196 was passed by the House on April |
|
|
21, 2023, by the following vote: Yeas 141, Nays 0, 1 present, not |
|
|
voting. |
|
|
|
|
|
______________________________ |
|
|
Chief Clerk of the House |
| |
| |
|
|
I certify that H.B. No. 2196 was passed by the Senate on May |
|
|
17, 2023, by the following vote: Yeas 31, Nays 0. |
|
|
|
|
|
______________________________ |
|
|
Secretary of the Senate |
|
|
APPROVED: _____________________ |
|
|
Date |
|
|
|
|
|
_____________________ |
|
|
Governor |