PMWJ S.B. 998 75(R)BILL ANALYSIS


JUDICIAL AFFAIRS
S.B. 998
By: Harris (Thompson)
4-16-97
Committee Report (Unamended)


BACKGROUND 

 Current law is not clear as to the status of a beneficiary who has
allowed his right of withdrawal of assets from a trust to lapse. 
 A Texas Supreme Court decision has called into question the court's
discretion in removing a trustee. 


PURPOSE

 This bill clarifies that a beneficiary may not be treated as a settlor of
the trust simply because of a lapsed withdrawal right and clarifies the
court's discretion to remove a trustee or to deny a trustee compensation
for cause. 


RULEMAKING AUTHORITY

 It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 


SECTION BY SECTION ANALYSIS

 SECTION 1 adds Subsec. (e) to Section 112.035 of the Property Code to
provide that a beneficiary of a trust may not be considered a settlor
merely because of a lapse, waiver or release of the beneficiary's right to
withdraw a part of the trust as long as the value of the property, during
the year the right to withdraw could have been exercised, did not exceed
certain amounts as defined by the Internal Revenue Code. 

 SECTION 2 amends Section 113.082(a), Property Code, to authorize a court,
in its discretion, to remove a trustee and deny part or all of the
trustee's compensation if certain criteria are met.  It also makes
nonsubstantive changes. 

 SECTION 3. Application of act.

 SECTION 4. Effective date.

 SECTION 5. Emergency clause.