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79R3409 CLG-D
By: Nixon H.B. No. 2011
A BILL TO BE ENTITLED
AN ACT
relating to the creation of a living trust; providing a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 38.123, Penal Code, is amended by
amending Subsection (a) and adding Subsection (e) to read as
follows:
(a) A person commits an offense if, with intent to obtain an
economic benefit for himself or herself, the person:
(1) contracts with any person to represent that person
with regard to personal causes of action for property damages or
personal injury;
(2) advises any person as to the person's rights and
the advisability of making claims for personal injuries or property
damages;
(3) advises any person as to whether or not to accept
an offered sum of money in settlement of claims for personal
injuries or property damages;
(4) enters into any contract with another person to
represent that person in personal injury or property damage matters
on a contingent fee basis with an attempted assignment of a portion
of the person's cause of action; [or]
(5) enters into any contract with a third person which
purports to grant the exclusive right to select and retain legal
counsel to represent the individual in any legal proceeding; or
(6) sells or offers to sell to another person in this
state a document or other instrument creating or purporting to
create a revocable or irrevocable living trust.
(e) In this section:
(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.
SECTION 2. 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.
Sec. 48.002. PROHIBITED ACT. (a) A person, other than a
person described in Subsection (b), may not:
(1) sell or offer to sell a document or other
instrument creating or purporting to create a revocable or
irrevocable living trust;
(2) induce, solicit, or employ or contract with
another to sell or offer to sell a document or other instrument
described by Subdivision (1); or
(3) otherwise receive, either directly or indirectly,
any compensation or other thing of value for any part of the
preparation of a document or other instrument described by
Subdivision (1).
(b) This section does not apply to a person currently
licensed to practice law in this state, another state, or a foreign
country and in good standing with the State Bar of Texas and the
state bar or licensing authority of any and all other states and
foreign countries where licensed.
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 paying secretarial, paralegal, or other ordinary and
reasonable expenses necessarily and actually incurred by the
attorney for the preparation of a document or other instrument
described by Section 48.002(a).
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 is liable to the state for a civil penalty in an amount not
to exceed $20,000 for each violation.
(b) The unauthorized practice of law committee of the State
Bar of Texas may bring suit to recover the civil penalty imposed
under Subsection (a).
(c) The unauthorized practice of law committee of the State
Bar of Texas 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 of the State Bar of Texas, as
authorized by Section 81.104, Government Code, may institute an
action to enjoin a violation of this chapter.
(b) The 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 3. (a) 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.
(b) For purposes of this section, conduct constituting an
offense under the penal law of this state occurred before the
effective date of this Act if any element of the offense occurred
before that date.
SECTION 4. This Act takes effect September 1, 2005.