This website will be unavailable from Thursday, May 30, 2024 at 6:00 p.m. through Monday, June 3, 2024 at 7:00 a.m. due to data center maintenance.

                                                                                


By:  Hartnett (Senate Sponsor - Harris)                           H.B. No. 3503
	(In the Senate - Received from the House May 7, 2003; 
May 9, 2003, read first time and referred to Committee on 
Jurisprudence; May 22, 2003, reported adversely, with favorable 
Committee Substitute by the following vote:  Yeas 5, Nays 0; 
May 22, 2003, sent to printer.)


COMMITTEE SUBSTITUTE FOR H.B. No. 3503                                   By:  Averitt


A BILL TO BE ENTITLED

AN ACT


relating to exculpatory clauses in trusts.                                  
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  The heading to Section 113.059, Property Code, 
is amended to read as follows:
	Sec. 113.059.  POWER OF SETTLOR [TRUSTOR] TO ALTER TRUSTEE'S 
RESPONSIBILITIES.
	SECTION 2.  Section 113.059, Property Code, is amended by 
amending Subsection (a) and adding Subsections (c) and (d) to read 
as follows:
	(a)  Except as provided by [Subsection (b) of] this section, 
the settlor by provision in an instrument creating, modifying, 
amending, or revoking the trust may relieve the trustee from a duty, 
liability, or restriction imposed by this subtitle.
	(c)  A settlor may not relieve the trustee of liability for:            
		(1)  a breach of trust committed:                                      
			(A)  in bad faith;                                                    
			(B)  intentionally; or                                                
			(C)  with reckless indifference to the interest of 
the beneficiary; or
		(2)  any profit derived by the trustee from a breach of 
trust.       
	(d)  A provision in a trust instrument relieving the trustee 
of liability for a breach of trust is ineffective to the extent that 
the provision is inserted in the trust instrument as a result of an 
abuse by the trustee of a fiduciary duty to or confidential 
relationship with the settlor.
	SECTION 3.  Section 142.005, Property Code, is amended by 
adding Subsections (h), (i), and (j) to read as follows:
	(h)  A trust created under this section is subject to 
Subtitle B, Title 9.
	(i)  Notwithstanding Subsection (h), this section prevails 
over a provision in Subtitle B, Title 9, that is in conflict or 
inconsistent with this section.
	(j)  A provision in a trust created under this section that 
relieves a trustee from a duty, responsibility, or liability 
imposed by this section or Subtitle B, Title 9, is enforceable only 
if:
		(1)  the provision is limited to specific facts and 
circumstances unique to the property of that trust and is not 
applicable generally to the trust; and
		(2)  the court creating or modifying the trust makes a 
specific finding that there is clear and convincing evidence that 
the inclusion of the provision is in the best interests of the 
beneficiary of the trust.
	SECTION 4.  Section 868, Texas Probate Code, is amended by 
adding Subsection (c) to read as follows:
	(c)  A provision in a trust created under Section 867 that 
relieves a trustee from a duty, responsibility, or liability 
imposed by this subpart or Subtitle B, Title 9, Property Code, is 
enforceable only if:
		(1)  the provision is limited to specific facts and 
circumstances unique to the property of that trust and is not 
applicable generally to the trust; and
		(2)  the court creating or modifying the trust makes a 
specific finding that there is clear and convincing evidence that 
the inclusion of the provision is in the best interests of the 
beneficiary of the trust.
	SECTION 5.  This Act takes effect September 1, 2003, and 
applies only to a trust existing on or created after that date.



* * * * *