By Naishtat H.B. No. 3632
76R6714 CLG-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to trustees of certain trusts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 867, Texas Probate Code, is amended to
1-5 read as follows:
1-6 Sec. 867. CREATION OF MANAGEMENT TRUST. (a) On application
1-7 by the guardian of a ward or by a ward's attorney ad litem at any
1-8 time after the date of the attorney's appointment under Section 646
1-9 of this code, the court in which the guardianship proceeding is
1-10 pending may enter an order that creates for the ward's benefit a
1-11 trust for the management of guardianship funds if the court finds
1-12 that the creation of the trust is in the ward's best interests.
1-13 Except as provided by Subsection (b) of this section, the court
1-14 shall appoint a trust company or a state or national bank that has
1-15 trust powers in this state to serve as trustee of the trust.
1-16 (b) The court may appoint a person other than a trust
1-17 company or bank described by Subsection (a) of this section to
1-18 serve as trustee of the trust only if:
1-19 (1) no trust company or bank described by Subsection
1-20 (a) of this section is willing to serve as trustee;
1-21 (2) the value of the trust's principal is $50,000 or
1-22 less; and
1-23 (3) the court determines the appointment to be in the
1-24 ward's best interests.
2-1 (c) The order shall direct the guardian or another person to
2-2 deliver all or part of the assets of the guardianship to a person
2-3 or corporate fiduciary appointed by the court as trustee of the
2-4 trust [company or a state or national bank that has trust powers in
2-5 this state]. The order shall include terms, conditions, and
2-6 limitations placed on the trust. The court shall maintain the
2-7 trust under the same cause number as the guardianship proceeding.
2-8 SECTION 2. Section 868(a), Texas Probate Code, is amended to
2-9 read as follows:
2-10 (a) Except as provided by Subsection (d) of this section, a
2-11 trust created under Section 867 of this code must provide that:
2-12 (1) the ward is the sole beneficiary of the trust;
2-13 (2) the trustee may disburse an amount of the trust's
2-14 principal or income as the trustee determines is necessary to
2-15 expend for the health, education, support, or maintenance of the
2-16 ward;
2-17 (3) the income of the trust that the trustee does not
2-18 disburse under Subdivision (2) of this subsection must be added to
2-19 the principal of the trust;
2-20 (4) if[] the trustee is a corporate fiduciary, the
2-21 trustee serves without giving a bond; and
2-22 (5) the trustee, on annual application to the court
2-23 and subject to the court's approval, is entitled to receive
2-24 reasonable compensation for services that the trustee provided to
2-25 the ward as the ward's trustee that is:
2-26 (A) to be paid from the trust's income,
2-27 principal, or both; and
3-1 (B) determined in the same manner as
3-2 compensation of a guardian of an estate under Section 665 of this
3-3 code.
3-4 SECTION 3. Subpart N, Part 4, Chapter XIII, Texas Probate
3-5 Code, is amended by adding Section 868B to read as follows:
3-6 Sec. 868B. BOND REQUIREMENT FOR CERTAIN TRUSTEES. The court
3-7 shall require a person, other than a corporate fiduciary, serving
3-8 as trustee to file with the county clerk a bond in an amount equal
3-9 to the value of the trust's principal and projected annual income
3-10 and with the conditions the court determines are necessary.
3-11 SECTION 4. Section 869A, Texas Probate Code, is amended to
3-12 read as follows:
3-13 Sec. 869A. SUCCESSOR TRUSTEE. The court may appoint a
3-14 [corporate fiduciary as] successor trustee if the trustee resigns,
3-15 becomes ineligible, or is removed.
3-16 SECTION 5. This Act takes effect September 1, 1999, and
3-17 applies only to an application for the creation of a trust filed on
3-18 or after that date. An application for the creation of a trust
3-19 filed before the effective date of this Act is governed by the law
3-20 in effect when the application was filed, and the former law is
3-21 continued in effect for that purpose.
3-22 SECTION 6. The importance of this legislation and the
3-23 crowded condition of the calendars in both houses create an
3-24 emergency and an imperative public necessity that the
3-25 constitutional rule requiring bills to be read on three several
3-26 days in each house be suspended, and this rule is hereby suspended.