84R713 AJA-F
 
  By: Villalba H.B. No. 3190
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to persons authorized to direct, consent to, or disapprove
  a trustee's decisions.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter A, Chapter 114, Property Code, is
  amended by adding Section 114.0031 to read as follows:
         Sec. 114.0031.  DIRECTED TRUSTS; ADVISORS. (a) In this
  section:
               (1)  "Advisor" includes protector.
               (2)  "Investment decision" means, with respect to any
  investment, the retention, purchase, sale, exchange, tender, or
  other transaction affecting the ownership of the investment or
  rights in the investment and, with respect to a nonpublicly traded
  investment, the valuation of the investment.
         (b)  For purposes of this section, an advisor with authority
  with respect to investment decisions is an investment advisor.
         (c)  A protector has all the power and authority granted to
  the protector by the trust terms, which may include:
               (1)  the power to remove and appoint trustees,
  advisors, trust committee members, and other protectors;
               (2)  the power to modify or amend the trust terms to
  achieve favorable tax status or to facilitate the efficient
  administration of the trust; and
               (3)  the power to modify, expand, or restrict the terms
  of a power of appointment granted to a beneficiary by the trust
  terms.
         (d)  If the terms of a trust give a person the authority to
  direct, consent to, or disapprove a trustee's actual or proposed
  investment decisions, distribution decisions, or other decisions,
  the person is considered to be an advisor and a fiduciary when
  exercising that authority except that the trust terms may provide
  that an advisor acts in a nonfiduciary capacity.
         (e)  A trustee who acts in accordance with the direction of
  an advisor, as prescribed by the trust terms, is not liable, except
  in cases of wilful misconduct on the part of the trustee so
  directed, for any loss resulting directly or indirectly from that
  act.
         (f)  If the trust terms provide that a trustee must make
  decisions with the consent of an advisor, the trustee is not liable,
  except in cases of wilful misconduct or gross negligence on the part
  of the trustee, for any loss resulting directly or indirectly from
  any act taken or not taken as a result of the advisor's failure to
  provide the required consent after having been requested to do so by
  the trustee.
         (g)  If the trust terms provide that a trustee must act in
  accordance with the direction of an advisor with respect to
  investment decisions, distribution decisions, or other decisions
  of the trustee, the trustee does not, except to the extent the trust
  terms provide otherwise, have the duty to:
               (1)  monitor the conduct of the advisor;
               (2)  provide advice to the advisor or consult with the
  advisor; or
               (3)  communicate with or warn or apprise any
  beneficiary or third party concerning instances in which the
  trustee would or might have exercised the trustee's own discretion
  in a manner different from the manner directed by the advisor.
         (h)  Absent clear and convincing evidence to the contrary,
  the actions of a trustee pertaining to matters within the scope of
  the advisor's authority, such as confirming that the advisor's
  directions have been carried out and recording and reporting
  actions taken at the advisor's direction, are presumed to be
  administrative actions taken by the trustee solely to allow the
  trustee to perform those duties assigned to the trustee under the
  trust terms, and such administrative actions are not considered to
  constitute an undertaking by the trustee to monitor the advisor or
  otherwise participate in actions within the scope of the advisor's
  authority.
         SECTION 2.  Section 114.003, Property Code, is repealed.
         SECTION 3.  (a) Except as specifically provided by a trust
  term in effect before the effective date of this Act, Section
  114.0031, Property Code, as added by this Act, applies to a trust
  created before, on, or after the effective date of this Act with
  respect to an action taken or not taken on or after September 1,
  2015, by a trustee or by an advisor described by Section 114.0031,
  Property Code, as added by this Act.
         (b)  Except as specifically provided by a trust term in
  effect before the effective date of this Act, the repeal by this Act
  of Section 114.003, Property Code, applies to a trust created
  before, on, or after the effective date of this Act with respect to
  an action taken or not taken on or after September 1, 2015, by a
  trustee or other person with respect to the trust. An action taken
  or not taken with respect to a trust before September 1, 2015, is
  governed by the law that applied to the action taken or not taken
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 4.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2015.