By: Harris S.B. No. 998
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the administration and operation of certain trusts.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 112.035, Property Code, is amended by
1-4 adding Subsection (e) to read as follows:
1-5 (e) A beneficiary of the trust may not be considered a
1-6 settlor merely because of a lapse, waiver, or release of the
1-7 beneficiary's right to withdraw a part of the trust property if the
1-8 value of the property that could have been withdrawn by exercising
1-9 the right of withdrawal in any calendar year does not exceed at the
1-10 time of the lapse, waiver, or release the greater of the amount
1-11 specified in:
1-12 (1) Section 2041(b)(2) or 2514(e), Internal Revenue
1-13 Code of 1986; or
1-14 (2) Section 2503(b), Internal Revenue Code of 1986.
1-15 SECTION 2. Subsection (a), Section 113.082, Property Code,
1-16 is amended to read as follows:
1-17 (a) A trustee may be removed in accordance with the terms of
1-18 the trust instrument, or, on the petition of an interested person
1-19 and after hearing, a court may, in its discretion, remove a trustee
1-20 and deny part or all of the trustee's compensation [if]:
1-21 (1) because of a material violation or attempted
1-22 violation by the trustee of [materially violated or attempted to
1-23 violate] the terms of the trust if [and] the violation or attempted
2-1 violation results in a material financial loss to the trust;
2-2 (2) because of the mental incapacity or insolvency of
2-3 the trustee [becomes incompetent or insolvent]; or
2-4 (3) [in the discretion of the court,] for other cause.
2-5 SECTION 3. The change in law made by Section 2 of this Act
2-6 applies only to a cause of action for removal under Section
2-7 113.082, Property Code, as amended by this Act, that is filed on or
2-8 after the effective date of this Act. An action that is filed
2-9 before the effective date of this Act is governed by the law in
2-10 effect at the time the action is filed, and the former law is
2-11 continued in effect for that purpose.
2-12 SECTION 4. This Act takes effect September 1, 1997.
2-13 SECTION 5. The importance of this legislation and the
2-14 crowded condition of the calendars in both houses create an
2-15 emergency and an imperative public necessity that the
2-16 constitutional rule requiring bills to be read on three several
2-17 days in each house be suspended, and this rule is hereby suspended.