Texas Senate Bill SB387

Texas 2015 - 84th Regular

Caption

Relating to trusts and certain other forms of asset protection.

Impact

The legislation significantly modifies existing statutes to enhance flexibility for trustees and create a clearer structure for trust management. Allowing directed trusts introduces a streamlined decision-making process by designating advisors with clear responsibilities. This change aims to increase efficiency in trust administration and potentially make trusts more attractive for estate planning and asset protection purposes. Additionally, the provisions that limit fiduciary liability reinforce the protections for trust advisors, encouraging professionals to take on roles without excessive risk.

Summary

SB387 aims to amend the Texas Property Code concerning trusts and certain other forms of asset protection. The bill introduces provisions about directed trusts, which allow specific advisors the authority to manage trust distributions and investments. An investment trust advisor or a distribution trust advisor can direct the trustee regarding the retention and distribution of trust assets without assuming ownership over those assets. Furthermore, the bill establishes guidelines on trust protectors and excludes certain fiduciaries from liability under specified conditions, thereby refining the fiduciary relationship within trust administration.

Sentiment

The sentiment around SB387 appears largely supportive among estate planners and financial professionals. Advocates argue that the bill will modernize trust law in Texas and enhance the usability of trusts in asset protection strategies. Critics, however, may express concerns about the potential overreach of powers delegated to advisors, emphasizing the importance of maintaining checks on these roles to protect beneficiaries' interests. Overall, the bill has spurred discussions about updating the laws to reflect current practices in finance and estate planning.

Contention

Key points of contention surrounding SB387 relate to the balance of power between trust advisors and trustees. While the bill intends to clarify the roles and protect advisors from liability, there are worries that it might lessen the accountability of those in charge of trust assets. Stakeholders have raised questions about how these changes might affect beneficiaries' rights and the potential for misuse of the delegated powers. Ensuring adequate oversight and protection of beneficiaries remains a priority in the ongoing discussions about the bill's implications.