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Amend HB 2241 by striking page 7, line 22 to page 9, line 21
and substituting the following:
Sec. 116.006. JUDICIAL CONTROL OF DISCRETIONARY POWER.
(a) The court may not order a trustee to change a decision to
exercise or not to exercise a discretionary power conferred by
Section 116.005 of this chapter unless the court determines that
the decision was an abuse of the trustee's discretion. A trustee's
decision is not an abuse of discretion merely because the court
would have exercised the power in a different manner or would not
have exercised the power.
(b) The decisions to which Subsection (a) applies include:
(1) a decision under Section 116.005(a) as to whether
and to what extent an amount should be transferred from principal to
income or from income to principal; and
(2) a decision regarding the factors that are relevant
to the trust and its beneficiaries, the extent to which the factors
are relevant, and the weight, if any, to be given to those factors,
in deciding whether and to what extent to exercise the
discretionary power conferred by Section 116.005(a).
(c) If the court determines that a trustee has abused the
trustee's discretion, the court may place the income and remainder
beneficiaries in the positions they would have occupied if the
discretion had not been abused, according to the following rules:
(1) to the extent that the abuse of discretion has
resulted in no distribution to a beneficiary or in a distribution
that is too small, the court shall order the trustee to distribute
from the trust to the beneficiary an amount that the court
determines will restore the beneficiary, in whole or in part, to the
beneficiary's appropriate position;
(2) to the extent that the abuse of discretion has
resulted in a distribution to a beneficiary which is too large, the
court shall place the beneficiaries, the trust, or both, in whole or
in part, in their appropriate positions by ordering the trustee to
withhold an amount from one or more future distributions to the
beneficiary who received the distribution that was too large or
ordering that beneficiary to return some or all of the distribution
to the trust; and
(3) to the extent that the court is unable, after
applying Subdivisions (1) and (2), to place the beneficiaries, the
trust, or both, in the positions they would have occupied if the
discretion had not been abused, the court may order the trustee to
pay an appropriate amount from its own funds to one or more of the
beneficiaries or the trust or both.
(d) If the trustee of a trust reasonably believes that one
or more beneficiaries of such trust will object to the manner in
which the trustee intends to exercise or not exercise a
discretionary power conferred by Section 116.005 of this chapter,
the trustee may petition the court having jurisdiction over the
trust, and the court shall determine whether the proposed exercise
or nonexercise by the trustee of such discretionary power will
result in an abuse of the trustee's discretion. The trustee shall
state in such petition the basis for its belief that a beneficiary
would object. The failure or refusal of a beneficiary to sign a
waiver or release is not reasonable grounds for a trustee to believe
the beneficiary will object. The court may appoint one or more
guardians ad litem pursuant to Section 115.014 of this subtitle. If
the petition describes the proposed exercise or nonexercise of the
power and contains sufficient information to inform the
beneficiaries of the reasons for the proposal, the facts upon which
the trustee relies, and an explanation of how the income and
remainder beneficiaries will be affected by the proposed exercise
or nonexercise of the power, a beneficiary who challenges the
proposed exercise or nonexercise has the burden of establishing
that it will result in an abuse of discretion. The trustee shall
advance from the trust principal all costs incident to the judicial
determination, including the reasonable attorney's fees and costs
of the trustee, any beneficiary or beneficiaries who are parties to
the action and who retain counsel, and any guardian ad litem. At
the conclusion of the proceeding, the court may award costs and
reasonable and necessary attorney's fees as provided in Section
114.064 of this subtitle, including, if the court considers it
appropriate, awarding part or all of such costs against the trust
principal or income, awarding part or all of such costs against one
or more beneficiaries or such beneficiary's or beneficiaries' share
of the trust, or awarding part or all of such costs against the
trustee in the trustee's individual capacity if the court
determines the trustee's exercise or nonexercise of discretionary
power would have resulted in an abuse of discretion or that the
trustee did not have reasonable grounds for believing one or more
beneficiaries will object to the proposed exercise or nonexercise
of the discretionary power.