C.S.H.B. 1471 78(R)    BILL ANALYSIS


C.S.H.B. 1471
By: Hartnett
Judicial Affairs
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current law specifies that a trustee may be removed under certain
conditions in accordance with the terms of the trust instrument or by a
court.  Issues have arisen regarding the failure of trustees to make an
accounting as required by law or by the terms of the trust.   

A beneficiary may demand a written statement of accounts, and current law
gives a trustee "a reasonable time" to comply.  What constitutes
"reasonable" has led to disputes. 

H.B. 1471 allows a court to remove a trustee for failure to make the
required accounting, specifies the time by which a trustee must deliver
financial statements, and allows a beneficiary to collect attorney's fees
and court costs in certain circumstances. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

H.B. 1471 amends the Property Code to allow a court to remove a trustee or
deny all or part of a trustee's compensation if the trustee fails to make
an accounting that is required by law or by the terms of the trust.   

The bill also requires a trustee to deliver a written statement of
accounts to a trust's beneficiaries on or before the 60th day after the
date the trustee receives the demand or after a longer period ordered by a
court.   

The bill also provides that if a beneficiary is successful in a suit to
compel a statement of accounts, the court may award court costs and
reasonable and necessary attorney's fees against the trustee in the
trustee's individual capacity, rather than in the trustee's capacity as
trustee. 

EFFECTIVE DATE

September 1, 2003.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute adds the words "in its discretion" to the original's
language providing that a court may remove a trustee or deny all or part
of a trustee's compensation under certain circumstances.   

The substitute requires a trustee to deliver a written statement of
accounts within "the 90th day" of a demand versus the original's "60th
day."   

The substitute adds the words "in its discretion" to the original's
language providing that a court may award court costs and attorney's fees
to a beneficiary when the beneficiary is successful in a suit to compel a
statement.   

The substitute also provides that this award may be "all or part" of the
costs of court versus "all" in  the original.  The substitute also
provides that costs and attorney's fees assessed against a trustee may be
against the trustee in the trustee's individual capacity "or in the
trustee's capacity as trustee."  The original assessed these costs and
fees against the trustee in the trustee's individual capacity.