| 1 | 1 | | 87R1854 MWC-F |
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| 2 | 2 | | By: Johnson, Seliger S.B. No. 1377 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the rule against perpetuities. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Section 112.036, Property Code, is amended to |
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| 10 | 10 | | read as follows: |
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| 11 | 11 | | Sec. 112.036. RULE AGAINST PERPETUITIES. (a) The rule |
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| 12 | 12 | | against perpetuities applies to an interest in a trust [trusts] |
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| 13 | 13 | | other than a charitable trust [trusts]. |
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| 14 | 14 | | (b) For purposes of this section, the effective date of a |
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| 15 | 15 | | trust is the date the trust becomes irrevocable. |
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| 16 | 16 | | (c) An interest in a trust must vest, if at all: |
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| 17 | 17 | | (1) not later than 300 years after the effective date |
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| 18 | 18 | | of the trust, if the effective date of the trust is on or after |
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| 19 | 19 | | September 1, 2021; or |
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| 20 | 20 | | (2) except as provided by Subsection (d), |
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| 21 | 21 | | [Accordingly, an interest is not good unless it must vest, if at |
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| 22 | 22 | | all,] not later than 21 years after some life in being at the time of |
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| 23 | 23 | | the creation of the interest, plus a period of gestation, if the |
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| 24 | 24 | | effective date of the trust is before September 1, 2021. |
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| 25 | 25 | | (d) An interest in a trust that has an effective date before |
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| 26 | 26 | | September 1, 2021, may vest as described by Subsection (c)(1) if the |
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| 27 | 27 | | trust instrument provides that an interest in the trust vests under |
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| 28 | 28 | | the provisions of this section applicable to trusts on the date that |
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| 29 | 29 | | the interest vests. |
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| 30 | 30 | | (e) Any interest in a trust may[, however,] be reformed or |
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| 31 | 31 | | construed to the extent and as provided by Section 5.043. |
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| 32 | 32 | | SECTION 2. This Act takes effect September 1, 2021. |
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