Texas 2021 - 87th Regular

Texas House Bill HB2179 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Moody (Senate Sponsor - Hughes) H.B. No. 2179
2		-	(In the Senate - Received from the House May 17, 2021;
3		-	May 17, 2021, read first time and referred to Committee on State
4		-	Affairs; May 21, 2021, reported favorably by the following vote:
5		-	Yeas 9, Nays 0; May 21, 2021, sent to printer.)
6		-	Click here to see the committee vote
	1	+	87R16934 MWC-F
	2	+	By: Moody H.B. No. 2179
7	3
8	4
9	5		A BILL TO BE ENTITLED
10	6		AN ACT
11	7		relating to trusts.
12	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	9		SECTION 1. Section 41.0021(a), Property Code, is amended to
14	10		read as follows:
15	11		(a) In this section, "qualifying trust" means an express
16	12		trust:
17	13		(1) in which the instrument or court order creating
18	14		the express trust, an instrument transferring property to the
19	15		trust, or any other agreement that is binding on the trustee
20	16		provides that a settlor or beneficiary of the trust has the right
21	17		to:
22	18		(A) revoke the trust without the consent of
23	19		another person other than a spouse who is also a settlor of the
24	20		trust;
25	21		(B) exercise an inter vivos general power of
26	22		appointment over the property that qualifies for the homestead
27	23		exemption, either alone or when aggregated with property subject to
28	24		an inter vivos general power of appointment held by a spouse who is
29	25		also a settlor of the trust; or
30	26		(C) use and occupy the residential property as
31	27		the settlor's or beneficiary's principal residence at no cost, or
32	28		rent free and without charge, except for [to the settlor or
33	29		beneficiary, other than payment of] taxes and other costs and
34	30		expenses specified in the instrument or court order:
35	31		(i) for the life of the settlor or
36	32		beneficiary;
37	33		(ii) for the shorter of the life of the
38	34		settlor or beneficiary or a term of years specified in the
39	35		instrument or court order; or
40	36		(iii) until the date the trust is revoked or
41	37		terminated by an instrument or court order that describes the
42	38		property with sufficient certainty to identify the property and
43	39		that is recorded in the real property records of the county in which
44	40		the property is located [and that describes the property with
45	41		sufficient certainty to identify the property]; and
46	42		(2) the trustee of which acquires the property in an
47	43		instrument of title or under a court order that:
48	44		(A) describes the property with sufficient
49	45		certainty to identify the property and the interest acquired; and
50	46		(B) is recorded in the real property records of
51	47		the county in which the property is located.
52	48		SECTION 2. Section 112.035, Property Code, is amended by
53	49		adding Subsections (f-1), (f-2), and (f-3) to read as follows:
54	50		(f-1) A beneficiary of the trust or the estate of a
55	51		beneficiary of the trust may not be considered to be a settlor
56	52		merely because the beneficiary, in any capacity:
57	53		(1) held or exercised a testamentary power of
58	54		appointment other than a general power of appointment;
59	55		(2) held a testamentary general power of appointment;
60	56		or
61	57		(3) exercised a testamentary general power of
62	58		appointment in favor of or for the benefit of the takers in default
63	59		of the appointive assets.
64	60		(f-2) If a beneficiary of the trust exercised a testamentary
65	61		general power of appointment in favor of or for the benefit of any
66	62		appointee other than the takers in default of the appointive
67	63		assets, the appointive assets are:
68	64		(1) subject to the claims of creditors of the
69	65		beneficiary, but only to the extent the beneficiary's owned
70	66		property is insufficient to meet the beneficiary's debts; and
71	67		(2) unless appointed to the beneficiary's estate, not
72	68		subject to:
73	69		(A) administration as a part of the beneficiary's
74	70		estate;
75	71		(B) recovery by the personal representative of
76	72		the beneficiary's estate, except as provided by Section 2207B,
77	73		Internal Revenue Code of 1986; or
78	74		(C) the payment of taxes or administration
79	75		expenses of the beneficiary's estate.
80	76		(f-3) For the purposes of Subsections (f-1) and (f-2),
81	77		"general power of appointment" has the meaning assigned by Section
82	78		2041(b)(1), Internal Revenue Code of 1986.
83	79		SECTION 3. Sections 112.0715(a) and (b), Property Code, are
84	80		amended to read as follows:
85	81		(a) A second trust may be created by a distribution of
86	82		principal under Section 112.072 or 112.073 to a trust that retains
87	83		the name used by the first trust. The second trust may retain,
88	84		subject to applicable federal law, the same tax identification
89	85		number of the first trust [created under the same trust instrument
90	86		as the first trust from which the principal is distributed or to a
91	87		trust created under a different trust instrument].
92	88		(b) If a second trust is created by a distribution of
93	89		principal under Section 112.072 or 112.073 to a trust that retains
94	90		[created under] the name of [same trust instrument as] the first
95	91		trust [from which the principal is distributed], the property is
96	92		not required to be retitled.
97	93		SECTION 4. Section 115.014(b), Property Code, is amended to
98	94		read as follows:
99	95		(b) At any point in a proceeding a court may appoint an
100	96		attorney ad litem to represent any interest that the court
101	97		considers necessary, including an attorney ad litem to defend an
102	98		action under Section 114.083 for a beneficiary of the trust who is a
103	99		minor or who has been adjudged incompetent, if the court determines
104	100		that representation of the interest otherwise would be inadequate.
105	101		SECTION 5. Section 112.0715(c), Property Code, is repealed.
106	102		SECTION 6. Sections 112.0715(a) and (b), Property Code, as
107	103		amended by this Act, are intended by the legislature to be a
108	104		codification of the common law of this state in effect immediately
109	105		before the effective date of this Act.
110	106		SECTION 7. The changes in law made by this Act apply to a
111	107		trust created before, on, or after the effective date of this Act.
112	108		SECTION 8. This Act takes effect immediately if it receives
113	109		a vote of two-thirds of all the members elected to each house, as
114	110		provided by Section 39, Article III, Texas Constitution. If this
115	111		Act does not receive the vote necessary for immediate effect, this
116	112		Act takes effect September 1, 2021.
117		-	* * * * *