By Hartnett H.B. No. 3005
74R6802 MWV-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to guardianship management trusts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 867, Texas Probate Code, is amended to
1-5 read as follows:
1-6 Sec. 867. CREATION OF MANAGEMENT TRUST. On application by
1-7 the guardian of a ward or the attorney ad litem for a ward, the
1-8 court in which the guardianship proceeding is pending may enter an
1-9 order that creates for the ward's benefit a trust for the
1-10 management of guardianship funds if the court finds that the
1-11 creation of the trust is in the ward's best interests. The order
1-12 shall direct the guardian to deliver all or part of the assets of
1-13 the guardianship to a trust company or a state or national bank
1-14 that has trust powers in this state. The order shall include
1-15 terms, conditions, and limitations placed on the trust.
1-16 SECTION 2. Section 868(a), Texas Probate Code, is amended to
1-17 read as follows:
1-18 (a) A trust created under Section 867 of this code must
1-19 provide that:
1-20 (1) the ward is the sole beneficiary of the trust;
1-21 (2) the trustee may disburse an amount of the trust's
1-22 principal or income as the trustee determines is necessary to
1-23 expend for the health, education, support, or maintenance of the
1-24 ward, the ward's spouse, or the ward's minor children;
2-1 (3) the income of the trust that the trustee does not
2-2 disburse under Subdivision (2) of this subsection must be added to
2-3 the principal of the trust;
2-4 (4) the trustee serves without giving a bond; and
2-5 (5) the trustee receives<, on annual application to
2-6 the court and subject to the court's approval, is entitled to
2-7 receive reasonable> compensation in accordance with compensation
2-8 charged by corporate trustees in the same geographical area for
2-9 trusts of a similar nature and size and <for services that the
2-10 trustee provided to the ward as the ward's trustee that is:>
2-11 <(A) to be> paid from the trust's income,
2-12 principal, or both the trust's income and principal on application
2-13 to and approval of the court<; and>
2-14 <(B) determined in the same manner as
2-15 compensation of a guardian of an estate under Section 665 of this
2-16 code>.
2-17 SECTION 3. Section 869, Texas Probate Code, is amended by
2-18 adding Subsection (c) to read as follows:
2-19 (c) The court may appoint a trust company or a state or
2-20 national bank that has trust powers in this state as successor
2-21 trustee if the trustee resigns, becomes ineligible, or is removed.
2-22 SECTION 4. Section 871(a), Texas Probate Code, is amended to
2-23 read as follows:
2-24 (a) The trustee shall <prepare and> file with the court an
2-25 annual accounting of transactions in the trust in the form of the
2-26 trustee's standard statement provided to its customers. If an
2-27 interested party or the court requires additional information
3-1 regarding the trustee's accounting, the court may require the
3-2 trustee to prepare an accounting in the same manner and form that
3-3 is required of a guardian under this chapter.
3-4 SECTION 5. Section 873, Texas Probate Code, is amended to
3-5 read as follows:
3-6 Sec. 873. DISTRIBUTION OF TRUST PROPERTY. Unless otherwise
3-7 provided by the court, the trustee shall distribute the principal
3-8 or any undistributed income of the trust:
3-9 (1) on termination of the trust during the life of the
3-10 ward, to the ward;
3-11 (2) on appointment of a successor trustee, to the
3-12 successor trustee; or
3-13 (3) on the ward's death, to the representative of the
3-14 deceased ward's estate <to the ward or to the representative of the
3-15 deceased ward's estate when the trust terminates on its own terms
3-16 or on the ward's death>.
3-17 SECTION 6. This Act takes effect September 1, 1995. The
3-18 changes in law made by this Act apply only to a trust for the
3-19 management of guardianship funds created on or after the effective
3-20 date of this Act. A trust for the management of guardianship funds
3-21 created before the effective date of this Act is governed by the
3-22 law in effect on the date the trust was created, and the former law
3-23 is continued in effect for that purpose.
3-24 SECTION 7. The importance of this legislation and the
3-25 crowded condition of the calendars in both houses create an
3-26 emergency and an imperative public necessity that the
3-27 constitutional rule requiring bills to be read on three several
4-1 days in each house be suspended, and this rule is hereby suspended.