Texas 2023 - 88th Regular

Texas House Bill HB2333

Filed
2/14/23  
Out of House Committee
4/28/23  
Voted on by House
5/9/23  
Out of Senate Committee
5/19/23  
Voted on by Senate
5/24/23  
Governor Action
6/18/23  

Caption

Relating to noncharitable trusts without an ascertainable beneficiary.

Impact

The legislation allows for a broader use of trusts for various purposes that do not necessitate an identifiable beneficiary. It aims to simplify the management of certain types of trusts while ensuring there is still an accountable party (the trust enforcer) responsible for enforcing the terms of the trust. With this change, Texas joins a handful of states that have adopted similar provisions. The bill directly alters the Texas Property Code by introducing new sections focused on noncharitable trusts and their enforcement, providing clarity on the roles and duties of a trust enforcer.

Summary

House Bill 2333 introduces provisions for the establishment and enforcement of noncharitable trusts that do not have a definite ascertainable beneficiary in Texas. Traditionally, trusts must benefit a specific individual or entity, but this bill changes that framework by allowing the creation of trusts for noncharitable purposes. This is significant as it expands the types of trusts that can be established in Texas, which historically restricted such noncharitable trusts to charitable purposes or trusts concerning animal care. The bill mandates the appointment of a 'trust enforcer' who will manage these trusts, thereby addressing accountability concerns traditionally associated with beneficiary-less trusts.

Sentiment

The sentiment around HB 2333 appeared to be generally positive among proponents, such as estate planning attorneys, who argue that this expansion will benefit clients seeking to utilize trusts in more diverse manners. They believe it will facilitate the creation of trusts that can serve specific purposes without the limitation of having to designate an identifiable beneficiary. However, there were voices of opposition, particularly from organizations like the Texas Real Estate Probate Institute, which expressed concerns regarding the potential implications of trusts created for noncharitable purposes, fearing that it could lead to misuse or misinterpretation without a clear beneficiary to hold accountable.

Contention

A major point of contention revolves around the definition and scope of the newly established trust enforcer role. While supporters argue that having a trust enforcer addresses accountability and operational concerns, critics worry that the vagueness of the purpose for these trusts may lead to complications. Moreover, some legal experts have raised alarms about the challenge of managing trusts that stray from the traditional framework that has necessitated a clear beneficiary. This debate underscores the balancing act between innovation in estate planning and the need for clarity and protection within trust law.

Texas Constitutional Statutes Affected

Property Code

  • Chapter 111. General Provisions
    • Section: New Section
    • Section: New Section
    • Section: New Section
  • Chapter 112. Creation, Validity, Modification, And Termination Of Trusts
    • Section: New Section
    • Section: New Section
    • Section: New Section
    • Section: New Section
    • Section: New Section

Companion Bills

No companion bills found.

Previously Filed As

TX SB1231

In trusts, further providing for definitions - UTC 103, for trust instrument controls and mandatory rules - UTC 105, for governing law - UTC 107, for situs of trust, for nonjudicial settlement agreements - UTC 111, for charitable purposes; enforcement - UTC 405, for trust for care of animal - UTC 408, for noncharitable trust without ascertainable beneficiary - UTC 409, for reformation to correct mistakes - UTC 415, for modification to achieve settlor's tax objectives - UTC 416, for spendthrift provision - UTC 502, for creditor's claim against settlor - UTC 505(a), for overdue distribution - UTC 506, for revocation or amendment of revocable trust - UTC 602, for trustee's duties and powers of withdrawal - UTC 603, for accepting or declining trusteeship - UTC 701, for trustee's bond - UTC 702, for cotrustees - UTC 703, for vacancy in trusteeship and appointment of successor - UTC 704, for resignation of trustee and filing resignation, for compensation of trustee - UTC 708, for duty to administer trust - UTC 801, for duty of loyalty - UTC 802, for powers to direct - UTC 808, for duty to inform and report, for discretionary powers and for powers of trustees - UTC 815, providing for directed trusts, further providing for remedies for breach of trust--UTC 1001, providing for nonjudicial account settlement and further providing for reliance on trust instrument - UTC 1006, for exculpation of trustee - UTC 1008, for certification of trust - UTC 1013 and for title of purchaser.

TX HB1850

Trust; creating the Uniform Trust Code; definitions; creditor claims; revocable trusts; trustees; duties and powers of trustee; trustee liability; severability; effective date.

TX HB6259

Probate: trusts; charitable organization as a qualified trust beneficiary; modify. Amends secs. 7103 & 7110 of 1998 PA 386 (MCL 700.7103 & 700.7110).

TX HB2172

Enacting the uniform trust decanting act, authorizing modification of a noncharitable irrevocable trust to provide that the rule against perpetuities is inapplicable, providing that the Kansas uniform statutory rule against perpetuities is inapplicable to trusts under certain circumstances and modifying the definition of resident trust in the Kansas income tax act.

TX S0011

An act relating to stewardship trusts

TX HB771

AN ACT relating to trusts.

TX SB0264

TRUST CD-VIRTUOUS TRUSTS

TX HB4594

TRUST CD-VIRTUOUS TRUSTS

TX AB565

Representation of trust beneficiaries.

TX HB2913

Relating to trusts.

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