Relating to the rule against perpetuities.
This bill directly impacts property laws in Texas, particularly concerning how trusts are structured and how long a person can dictate the ownership of their property after death. The modifications aim to clarify the existing laws to prevent potential legal confusion that could arise from differing interpretations of the rule against perpetuities. By extending the permissible vesting age for certain trust interests, the law aims to provide greater flexibility and certainty for estate planning and asset management, a crucial factor for many Texans.
House Bill 990 amends Section 112.036 of the Property Code regarding the rule against perpetuities, a legal doctrine that restricts the ability to control the ownership of property for an indefinite period. The bill stipulates that interests in a trust must vest not later than 200 years after the effective date of the trust if established on or after September 1, 2009. For trusts effective before this date, a 21-year rule post the life in being applies, with exceptions allowing for the provisions of the amended section to take precedence under specific conditions.
While the bill primarily seeks to reform and clarify existing property laws, it has sparked discussions regarding the implications of extending the vesting period for trust interests. Critics may argue that allowing interests to last up to 200 years could tie up property in anonymous trusts, hindering local economies and limiting access to land for development or other community needs. Proponents counter that such flexibility allows families to manage their assets better, particularly in estates with complex generational structures.