SRC-JBJ H.B. 1475 76(R)BILL ANALYSIS


Senate Research CenterH.B. 1475
By: Thompson (Harris)
Jurisprudence
5/11/1999
Committee Report (Amended)


DIGEST 

Currently, a trustee may have difficulty appointing an investment agent for
the administration of a trust estate due to the possibility of the trustee
being held strictly liable under common law.  In addition, a trustee who
wishes to bind future beneficiaries to a trust, whether minors or unborn,
must do so through litigation.  H.B. 1475 would authorize a trustee to
employ an investment agent and to delegate investment decisions to the
agent, and would provide for a final and binding written instrument to
designate a minor or an unborn person as a beneficiary. 

PURPOSE

As proposed, H.B. 1475 amends regulations for the management and investment
of trust assets. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 113.018, Property Code, to authorize a trustee
to employ investment agents in the administration of the trust estate. 

SECTION 2.  Amends Chapter 113B, Property Code, by adding Section 113.060,
as follows: 

Sec. 113.060.  AUTHORITY TO DELEGATE INVESTMENT DECISIONS.  Defines
"beneficiary."  Authorizes a trustee to employ and delegate investment
decisions to an investment agent who is responsible for the investment
decisions of the agent.  Provides that a trustee is not responsible for
investment decisions made by the agent, under certain circumstances.
Requires the trustee to send written notice to each beneficiary of the
trust informing the beneficiary of the intended delegation and identifying
the investment agent, by a certain date, and, if the beneficiary is a
minor, to the beneficiary's legal guardian. 

SECTION 3.  Amends Chapter 114B, Property Code, by adding Section 114.032,
as follows: 

Sec. 114.032.  LIABILITY FOR WRITTEN AGREEMENTS.  Sets forth agreements
that are final and binding between a beneficiary and a trustee or certain
other individuals.  Provides that an unborn or unascertained beneficiary
has a substantially identical interest only with a trust beneficiary from
whom the unborn or unascertained beneficiary descends.  Provides that this
section does not apply to a written instrument that modifies or terminates
a trust in whole or in part unless the instrument is otherwise permitted by
law. 

SECTION 4.Effective date: September 1, 1999.
  Makes application of this Act prospective.

SECTION 5.Emergency clause.


SUMMARY OF COMMITTEE CHANGES

SECTION 3.

Amends Section 114.032(e), Property Code, to provide that this section does
not apply to a written instrument that modifies or terminates, rather than
only terminates, a trust in whole or in part unless the instrument is
otherwise permitted by law.