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.

                                                                                
79R14215 CLG-F


By:  Nixon                                                        H.B. No. 2011



A BILL TO BE ENTITLED

AN ACT

relating to the creation of a living trust; providing a civil 
penalty.      
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Title 4, Business & Commerce Code, is amended by 
adding Chapter 48 to read as follows:
	CHAPTER 48.   CREATION OF LIVING TRUSTS
	Sec. 48.001.  DEFINITIONS.  In this chapter:                            
		(1)  "Irrevocable living trust" means a living trust 
that cannot be terminated by the settlor after the trust's 
creation.
		(2)  "Living trust" means a trust that is created and 
takes effect during the settlor's lifetime.
		(3)  "Revocable living trust" means a living trust in 
which the settlor reserves the right to terminate the trust and 
recover the trust property and any undistributed income.
		(4)  "Settlor" means the person who creates the trust.                 
		(5)  "Unauthorized practice of law committee" means the 
unauthorized practice of law committee established under Section 
81.103, Government Code.
	Sec. 48.002.  PROHIBITED ACT. (a) A person, other than a 
person described in Subsection (b), may not:
		(1)  engage in any act, practice, or course of business 
involving the solicitation of another person:
			(A)  to become the settlor of a living trust; or                      
			(B)  to purchase a document or other instrument 
creating or purporting to create a revocable or irrevocable living 
trust; or
		(2)  induce, solicit, or employ or contract with 
another to engage in conduct described by Subdivision (1).
	(b)  This section does not apply to a person currently 
licensed to practice law in this state.
	Sec. 48.003.  LIABILITY OF OTHER PERSONS; PROPORTIONATE 
RESPONSIBILITY INAPPLICABLE.  (a)  A person who is a partner, 
officer, director, associate, or employee of another person alleged 
to have engaged in activity in violation of Section 48.002 is 
jointly and severally liable with the other person under this 
chapter if the person has wilfully participated or materially aided 
in the activity.
	(b)  Chapter 33, Civil Practice and Remedies Code, does not 
apply to an action brought under this section.
	Sec. 48.004.  EXPENSES.  This chapter does not prevent an 
attorney from making a payment for secretarial, paralegal, or other 
ordinary and reasonable expenses incurred in connection with the 
representation of clients.
	Sec. 48.005.  PRIVATE ACTION.  A person injured by a 
violation of this chapter, including the personal representative or 
beneficiary of a decedent's estate, may bring an action to recover 
actual damages, court costs, and reasonable attorney's fees.
	Sec. 48.006.  UNAUTHORIZED PRACTICE OF LAW.  A violation of 
this chapter constitutes the unauthorized practice of law.
	Sec. 48.007.  CIVIL PENALTY.  (a)  A person who violates this 
chapter with intent to defraud or deceive another with respect to a 
living trust is liable to the state for a civil penalty in an amount 
not to exceed $25,000 for each violation.
	(b)  The unauthorized practice of law committee may bring 
suit to recover the civil penalty imposed under Subsection (a).
	(c)  The unauthorized practice of law committee may recover 
reasonable expenses incurred in obtaining a civil penalty under 
this section, including court costs and reasonable attorney's fees.
	Sec. 48.008.  INJUNCTIVE RELIEF.  (a)  In addition to any 
other action, proceeding, or remedy authorized by law, the 
unauthorized practice of law committee, as authorized by Section 
81.104, Government Code, may institute an action to enjoin a 
violation of this chapter.
	(b)  The unauthorized practice of law committee is entitled 
to recover reasonable expenses incurred in obtaining injunctive 
relief under this section, including reasonable attorney's fees and 
court costs.
	Sec. 48.009.  WAIVER OF RIGHT OR REMEDY VOID.  A provision of 
a contract or other agreement or instrument that purports to be a 
waiver by a person of any right or remedy provided by this chapter 
is contrary to public policy and void.
	Sec. 48.010.  CUMULATIVE REMEDIES. This chapter is not 
exclusive and does not limit or restrict the definition of the 
practice of law in Chapter 81, Government Code.  This chapter does 
not limit or restrict any remedy provided in Chapter 81, Government 
Code, or any other law designed to eliminate the unauthorized 
practice of law by individuals or other persons.
	SECTION 2.  This Act applies only to conduct that occurs on 
or after the effective date of this Act.  Conduct that occurs before 
the effective date of this Act is governed by the law in effect at 
the time the conduct occurred, and that law is continued in effect 
for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.