By Thompson H.B. No. 2006
75R6488 CLG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the administration and operation of certain trusts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 112.035, Property Code, is amended by
1-5 adding Subsection (e) to read as follows:
1-6 (e) A beneficiary of the trust may not be considered the
1-7 settlor merely because of a lapse, waiver, or release of the
1-8 beneficiary's right to withdraw a part of the trust property if the
1-9 value of the property in any calendar year during which the right
1-10 of withdrawal could have been exercised does not exceed at the time
1-11 of the lapse, waiver, or release the greater of the amount
1-12 specified in:
1-13 (1) Section 2041(b)(2) or 2514(e), Internal Revenue
1-14 Code of 1986; or
1-15 (2) Section 2503(b), Internal Revenue Code of 1986.
1-16 SECTION 2. Section 113.082(a), Property Code, is amended to
1-17 read as follows:
1-18 (a) A trustee may be removed in accordance with the terms of
1-19 the trust instrument, or, on the petition of an interested person
1-20 and after hearing, a court, in its discretion, may remove a trustee
1-21 and deny part or all of the trustee's compensation for cause,
1-22 including [if]:
1-23 (1) a material violation or attempted violation by the
1-24 trustee of [materially violated or attempted to violate] the terms
2-1 of the trust if [and] the violation or attempted violation results
2-2 in a material financial loss to the trust; or
2-3 (2) the incompetency or insolvency of the trustee
2-4 [becomes incompetent or insolvent; or]
2-5 [(3) in the discretion of the court, for other cause].
2-6 SECTION 3. The change in law made by Section 2 of this Act
2-7 applies only to a cause of action for removal under Section
2-8 113.082, Property Code, as amended by this Act, that is filed on or
2-9 after the effective date of this Act. An action that is filed
2-10 before the effective date of this Act is governed by the law in
2-11 effect at the time the action is filed, and the former law is
2-12 continued in effect for that purpose.
2-13 SECTION 4. This Act takes effect September 1, 1997.
2-14 SECTION 5. The importance of this legislation and the
2-15 crowded condition of the calendars in both houses create an
2-16 emergency and an imperative public necessity that the
2-17 constitutional rule requiring bills to be read on three several
2-18 days in each house be suspended, and this rule is hereby suspended.