Texas 2021 - 87th Regular

Texas Senate Bill SB1933 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	87R2987 MWC-F
2	2	By: Hughes S.B. No. 1933
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to trusts.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 41.0021(a), Property Code, is amended to
10	10	read as follows:
11	11	(a) In this section, "qualifying trust" means an express
12	12	trust:
13	13	(1) in which the instrument or court order creating
14	14	the express trust, an instrument transferring property to the
15	15	trust, or any other agreement that is binding on the trustee
16	16	provides that a settlor or beneficiary of the trust has the right
17	17	to:
18	18	(A) revoke the trust without the consent of
19	19	another person other than a spouse who is also a settlor of the
20	20	trust;
21	21	(B) exercise an inter vivos general power of
22	22	appointment over the property that qualifies for the homestead
23	23	exemption, either alone or when aggregated with property subject to
24	24	an inter vivos general power of appointment held by a spouse who is
25	25	also a settlor of the trust; or
26	26	(C) use and occupy the residential property as
27	27	the settlor's or beneficiary's principal residence at no cost, or
28	28	rent free and without charge, except for [to the settlor or
29	29	beneficiary, other than payment of] taxes and other costs and
30	30	expenses specified in the instrument or court order:
31	31	(i) for the life of the settlor or
32	32	beneficiary;
33	33	(ii) for the shorter of the life of the
34	34	settlor or beneficiary or a term of years specified in the
35	35	instrument or court order; or
36	36	(iii) until the date the trust is revoked or
37	37	terminated by an instrument or court order that describes the
38	38	property with sufficient certainty to identify the property and
39	39	that is recorded in the real property records of the county in which
40	40	the property is located [and that describes the property with
41	41	sufficient certainty to identify the property]; and
42	42	(2) the trustee of which acquires the property in an
43	43	instrument of title or under a court order that:
44	44	(A) describes the property with sufficient
45	45	certainty to identify the property and the interest acquired; and
46	46	(B) is recorded in the real property records of
47	47	the county in which the property is located.
48	48	SECTION 2. Section 112.035, Property Code, is amended by
49	49	adding Subsections (f-1) and (f-2) to read as follows:
50	50	(f-1) A beneficiary of the trust or the estate of a
51	51	beneficiary of the trust may not be considered to be a settlor
52	52	merely because the beneficiary, in any capacity, held or exercised:
53	53	(1) a testamentary power, other than a testamentary
54	54	general power, to appoint property of the trust to or for the
55	55	benefit of a person other than the beneficiary, a creditor of the
56	56	beneficiary, the beneficiary's estate, or a creditor of the
57	57	beneficiary's estate; or
58	58	(2) a testamentary general power to appoint property
59	59	of the trust to or for the benefit of a person who is a taker in
60	60	default of the appointive assets.
61	61	(f-2) If a beneficiary of the trust exercised a testamentary
62	62	general power of appointment to appoint property of the trust to or
63	63	for the benefit of a person who is not a taker in default of the
64	64	appointive assets, the appointive assets are:
65	65	(1) subject to the claims of creditors of the
66	66	beneficiary, but only to the extent the beneficiary's owned
67	67	property is insufficient to meet the beneficiary's debts; and
68	68	(2) unless appointed to the beneficiary's estate, not
69	69	subject to:
70	70	(A) administration as a part of the beneficiary's
71	71	estate;
72	72	(B) recovery by the personal representative of
73	73	the beneficiary's estate, except as provided by Section 2207B,
74	74	Internal Revenue Code of 1986; or
75	75	(C) the payment of taxes or administration
76	76	expenses of the beneficiary's estate.
77	77	SECTION 3. Sections 112.0715(a) and (b), Property Code, are
78	78	amended to read as follows:
79	79	(a) A second trust may be created by a distribution of
80	80	principal under Section 112.072 or 112.073 to a trust that retains
81	81	the name used by the first trust. The second trust may retain,
82	82	subject to applicable federal law, the same tax identification
83	83	number of the first trust [created under the same trust instrument
84	84	as the first trust from which the principal is distributed or to a
85	85	trust created under a different trust instrument].
86	86	(b) If a second trust is created by a distribution of
87	87	principal under Section 112.072 or 112.073 to a trust that retains
88	88	[created under] the name of [same trust instrument as] the first
89	89	trust [from which the principal is distributed], the property is
90	90	not required to be retitled.
91	91	SECTION 4. Section 115.014(b), Property Code, is amended to
92	92	read as follows:
93	93	(b) At any point in a proceeding a court may appoint an
94	94	attorney ad litem to represent any interest that the court
95	95	considers necessary, including an attorney ad litem to defend an
96	96	action under Section 114.083 for a beneficiary of the trust who is a
97	97	minor or who has been adjudged incompetent, if the court determines
98	98	that representation of the interest otherwise would be inadequate.
99	99	SECTION 5. Section 112.0715(c), Property Code, is repealed.
100	100	SECTION 6. Sections 112.0715(a) and (b), Property Code, as
101	101	amended by this Act, are intended by the legislature to be a
102	102	codification of the common law of this state in effect immediately
103	103	before the effective date of this Act.
104	104	SECTION 7. The changes in law made by this Act apply to a
105	105	trust created before, on, or after the effective date of this Act.
106	106	SECTION 8. This Act takes effect immediately if it receives
107	107	a vote of two-thirds of all the members elected to each house, as
108	108	provided by Section 39, Article III, Texas Constitution. If this
109	109	Act does not receive the vote necessary for immediate effect, this
110	110	Act takes effect September 1, 2021.