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78R4448 KCR-D

By:  Paxton                                                       H.B. No. 2239



A BILL TO BE ENTITLED

AN ACT

relating to the applicability of the rule against perpetuities to 
trusts.   
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 5.042(a), Property Code, is amended to 
read as follows:  
	(a)  The following common-law rules or doctrines do not apply 
in this state:
		(1)  [known as] the rule in Shelley's case;    
		(2)  [,] the rule forbidding a remainder to the 
grantor's heirs;
		(3)  [,] the doctrine of worthier title;       
		(4)  the rule against perpetuities or remoteness in 
vesting as that rule relates to trusts; and
		(5)  [, and] the doctrine or rule prohibiting an 
existing lien upon part of a homestead from extending to another 
part of the homestead not charged with the debts secured by the 
existing lien upon part of the homestead [do not apply in this 
state].
	SECTION 2.  Section 112.036, Property Code, is amended to 
read as follows:   
	Sec. 112.036.  RULE AGAINST PERPETUITIES; REMOTENESS IN 
VESTING.  (a)  Except as provided by Section 121.004, this section 
governs the applicability of any rule against perpetuities or 
remoteness of vesting as that rule relates to trusts.
	(b)  The rule against perpetuities does not apply [applies] 
to trusts [other than charitable trusts].
	(c)  An [Accordingly, an] interest in a trust is not good 
unless it must vest, if at all, not later than 1,000 [21] years 
after some life in being at the time of the creation of the 
interest[, plus a period of gestation.  Any interest in a trust may, 
however, be reformed or construed to the extent and as provided by 
Section 5.043].
	SECTION 3.  Section 121.004, Property Code, is amended to 
read as follows:   
	Sec. 121.004.  CONTINUATION OF PENSION TRUSTS [RULE AGAINST 
PERPETUITIES].  A pension trust may continue for as long as is 
necessary to accomplish the purposes of the trust and is not invalid 
under [the rule against perpetuities or] any [other] law 
restricting or limiting the duration of a trust.
	SECTION 4.  (a)  This Act takes effect January 1, 2004, but 
only if the constitutional amendment proposed by the 78th 
Legislature, Regular Session, 2003, removing the prohibition 
against perpetual trusts is approved by the voters.  If that 
amendment is not approved by the voters, this Act has no effect.
	(b)  The change in law made by this Act applies only to a 
trust that becomes irrevocable or is judicially modified or 
reformed  on or after the effective date of this Act.  A trust that 
does not become irrevocable or is not judicially modified or 
reformed on or after the effective date of this Act is governed by 
the law in effect when the trust was created, and the former law is 
continued in effect for that purpose.