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A BILL TO BE ENTITLED
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AN ACT
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relating to title insurance coverage of property transferred into |
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an inter vivos trust. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 2703, Insurance Code, is |
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amended by adding Section 2703.055 to read as follows: |
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Sec. 2703.055. TRANSFER OF PROPERTY INTO INTER VIVOS TRUST; |
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EFFECT OF TITLE INSURANCE COVERAGE. (a) The transfer by deed of |
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real property into an inter vivos trust does not affect title |
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insurance coverage of the property if the trust settlor is a |
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beneficiary of the trust. |
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(b) On the effective date of a transfer under Subsection |
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(a), the insurance coverage on the title of the real property |
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transferred applies to the trustee of the trust into which the |
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settlor transferred the property. |
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(c) The insurance company has the defenses to the coverage |
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described in Subsection (b) that the company had under the policy |
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against the original named. |
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SECTION 2. This Act applies only to an insurance policy or |
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contract that is delivered, issued for delivery, or renewed on or |
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after January 1, 2010. An insurance policy or contract delivered, |
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issued for delivery, or renewed before January 1, 2010, is governed |
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by the law as it existed immediately before the effective date of |
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this Act, and that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2009. |