1-1 By: Harris S.B. No. 998
1-2 (In the Senate - Filed March 6, 1997; March 12, 1997, read
1-3 first time and referred to Committee on Jurisprudence;
1-4 March 26, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; March 26, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 998 By: Harris
1-8 AN ACT
1-9 relating to the administration and operation of certain trusts.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Section 112.035, Property Code, is amended by
1-12 adding Subsection (e) to read as follows:
1-13 (e) A beneficiary of the trust may not be considered a
1-14 settlor merely because of a lapse, waiver, or release of the
1-15 beneficiary's right to withdraw a part of the trust property if the
1-16 value of the property that could have been withdrawn by exercising
1-17 the right of withdrawal in any calendar year does not exceed at the
1-18 time of the lapse, waiver, or release the greater of the amount
1-19 specified in:
1-20 (1) Section 2041(b)(2) or 2514(e), Internal Revenue
1-21 Code of 1986; or
1-22 (2) Section 2503(b), Internal Revenue Code of 1986.
1-23 SECTION 2. Subsection (a), Section 113.082, Property Code,
1-24 is amended to read as follows:
1-25 (a) A trustee may be removed in accordance with the terms of
1-26 the trust instrument, or, on the petition of an interested person
1-27 and after hearing, a court may, in its discretion, remove a trustee
1-28 and deny part or all of the trustee's compensation [if]:
1-29 (1) because of a material violation or attempted
1-30 violation by the trustee of [materially violated or attempted to
1-31 violate] the terms of the trust if [and] the violation or attempted
1-32 violation results in a material financial loss to the trust;
1-33 (2) because of the mental incapacity or insolvency of
1-34 the trustee [becomes incompetent or insolvent]; or
1-35 (3) [in the discretion of the court,] for other cause.
1-36 SECTION 3. The change in law made by Section 2 of this Act
1-37 applies only to a cause of action for removal under Section
1-38 113.082, Property Code, as amended by this Act, that is filed on or
1-39 after the effective date of this Act. An action that is filed
1-40 before the effective date of this Act is governed by the law in
1-41 effect at the time the action is filed, and the former law is
1-42 continued in effect for that purpose.
1-43 SECTION 4. This Act takes effect September 1, 1997.
1-44 SECTION 5. The importance of this legislation and the
1-45 crowded condition of the calendars in both houses create an
1-46 emergency and an imperative public necessity that the
1-47 constitutional rule requiring bills to be read on three several
1-48 days in each house be suspended, and this rule is hereby suspended.
1-49 * * * * *