By: Leach H.B. No. 5069
A BILL TO BE ENTITLED
AN ACT
relating to trustee settlement of accounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Chapter 114, Property Code, is
amended by adding Section 114.009 to read as follows:
Section 114.009. TRUSTEE SETTLEMENT OF ACCOUNTS
(A) A trustee may obtain a settlement of its accounts in
accordance with subsection (B) when any of the following occur:
(1) A trust terminates pursuant to the terms of the trust.
(2) A trust terminates early pursuant to § 112.054.
(3) A trustee resigns or is removed.
(4) A trustee seeks discharge of an interim accounting
period when the trust is continuing.
(B) (1) A trustee who elects to proceed under this section
shall provide all of the following to the qualified beneficiaries
of the trust and the successor trustee, if applicable, within a
reasonable time after termination of the trust pursuant to its
terms, the resignation or removal of the trustee, or the end of the
period for which the trustee is seeking discharge:
a. A statement showing the fair market value of the new
assets to be distributed from a terminating trust or to a successor
trustee.
b. A trust accounting for the prior two years showing all
receipts and disbursements and inventory value of the net assets.
c. An estimate for any items reasonably anticipated to be
received or disbursed.
d. The amount of any fees, including trustee fees, remaining
to be paid.
e. Notice that the trust is terminating, or that the trustee
has resigned or been removed, the time period for which the trustee
seeks discharge of its accounts, and a statement providing that
claims against a trustee shall be barred if no objections are
received within the time period described in subsection (C).
f. The name and mailing address of the trustee.
g. The name and telephone number of a person who may be
contacted for additional information.
(2) The trustee may also provide the statement and notice
described in this subsection to any other person who the trustee
reasonably believes may have an interest in the trust.
(C) (1) If, after receiving the notice and trust information
described in subsection (B), a qualified beneficiary or any other
party that received the notice and trust information objects to a
disclosed act or omission, the qualified beneficiary shall provide
written notice of the objection to the trustee not later than 45
days after the notice was sent by the trustee. If no written
objection is provided in the 45-day time period, the information
provided under subsection (B) shall be considered approved by the
recipient. The trustee, in the case of a trust terminating pursuant
to the terms of the trust or the trustee's resignation or removal,
within a reasonable period of time following the expiration of the
45-day time period, shall distribute the assets as provided in the
trust or to the successor trustee. If a qualified beneficiary gives
the trustee a written objection within the applicable 45-day time
period, the trustee or the qualified beneficiary may do either of
the following:
a. Submit the written objection to the court for resolution
and charge the expense of commencing a proceeding to the trust.
b. Resolve the objection by written agreement.
(2) Any agreement entered into pursuant to paragraph (1)b
may include a release, an indemnity clause, or both, on the part of
the beneficiary against the trustee relating to the trust. If the
parties agree to a nonjudicial settlement agreement or other
written agreement, any related expenses shall be charged to the
trust. Upon a resolution of an objection under this subsection,
within a reasonable period of time, the trustee shall distribute
the remaining trust assets as provided in the trust or to the
successor trustee.
(D) The trustee may rely upon the written statement of a
person receiving notice that the person does not object.
(E) When a trustee distributes assets of a terminating trust
or to the successor trustee after complying with this article and
having received no objections, each person who received notice and
either consented or failed to object pursuant to this section is
barred from doing either of the following:
(1) Bringing a claim against the trustee or challenging the
validity of the trust to the same extent and with the same
preclusive effect as if the court had entered a final order
approving the trustee's final account.
(2) Bringing a claim against the trustee for the period of
such interim accounts to the same extent and with the same
preclusive effect as if the court had entered a final order
approving the trustee's interim accounts.
(F) The court, as defined under § 111.004, shall have
exclusive jurisdiction over matters under this section.
(G) In the event the trustee is not released and his actions
ratified pursuant to the process provided by subsection (b), the
trustee shall not be precluded from obtaining a release of
liability by another permitted method.
SECTION 2. 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 on September 1, 2025.