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.