79R5866 AJA-D

By:  Eiland                                                       H.B. No. 2561



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 5.043(d), Property Code, is amended to 
read as follows:  
	(d)  Except as provided by this subsection, this [This] 
section applies to legal and equitable interests, including 
noncharitable gifts and trusts, conveyed by an inter vivos 
instrument or a will that takes effect on or after September 1, 
1969, and this section applies to an appointment made on or after 
that date regardless of when the power was created.  This section 
does not apply to a trust created on or after January 1, 2006.
	SECTION 2.  Section 112.036, Property Code, is amended to 
read as follows:   
	Sec. 112.036.  RULE AGAINST PERPETUITIES NOT APPLICABLE.  
The rule against perpetuities does not apply [applies] to trusts 
[other than charitable trusts.  Accordingly, an interest is not 
good unless it must vest, if at all, not later than 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.  The change in law made by this Act applies only 
to a trust created on or after the effective date of this Act.  A 
trust created before the effective date of this Act is governed by 
the law in effect immediately before that date, and that law is 
continued in effect for that purpose.
	SECTION 4.  This Act takes effect January 1, 2006, but only 
if the constitutional amendment proposed by the 79th Legislature, 
Regular Session, 2005, to allow the legislature to enact laws 
authorizing the creation of perpetual trusts is approved by the 
voters.  If that amendment is not approved by the voters, this Act 
has no effect.