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A BILL TO BE ENTITLED
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AN ACT
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relating to trusts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 112.010(c-2)(2), Property Code, is |
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amended to read as follows: |
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(2) delivering the memorandum to the trustee or, if |
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there is not a trustee, to the transferor of the interest or his |
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legal representative not later than the date that is nine months |
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after the later of: |
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(A) the day on which the transfer creating the |
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interest in the beneficiary is made; |
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(B) the day on which the beneficiary attains age |
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21; [or] |
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(C) in the case of a future interest, the date of |
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the event that causes the taker of the interest to be finally |
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ascertained and the interest to be indefeasibly vested[.]; or |
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(D) in the case of an interest in a trust created |
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by reason of the death of a decedent dying before December 17, 2010, |
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but after December 31, 2009, and to which Texas Probate Code Section |
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37A does not apply, then December 17, 2010. |
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SECTION 2. Section 112.038, Property Code, is amended to |
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read as follows: |
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Sec. 112.038. FORFEITURE CLAUSE. A provision in a trust |
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that would cause a forfeiture of or void an interest for bringing |
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any court action, including contesting a trust, is unenforceable |
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if: |
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(1) just [probable] cause existed [exists] for |
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bringing the action; and |
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(2) the action was brought and maintained in good |
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faith. |
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SECTION 3. Section 112.057, Property Code, is amended by |
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adding Subsections (e) and (f) to read as follows: |
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(e) A beneficiary to whom written notice is required to be |
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given under this section may waive the notice requirement in a |
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writing delivered to the trustee. If all beneficiaries to whom |
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notice would otherwise be required to be given under this section |
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waive the notice requirement, notice is not required. |
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(f) Notice required under this section shall be given to a |
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guardian of the estate, guardian ad litem, or parent of a minor or |
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incapacitated beneficiary. A guardian of the estate, guardian ad |
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litem, or parent of a minor or incapacitated beneficiary may waive |
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the notice requirement in accordance with this section on behalf of |
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the minor or incapacitated beneficiary. |
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SECTION 4. Section 115.001(d), Property Code, is amended to |
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read as follows: |
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(d) The jurisdiction of the district court is exclusive |
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except for jurisdiction conferred by law on: |
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(1) a statutory probate court; |
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(2) a court that creates a trust under Section 867, |
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Texas Probate Code; |
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(3) a court that creates a trust under Section |
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142.005; |
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(4) a justice court under Chapter 27, Government Code; |
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[or] |
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(5) a small claims court under Chapter 28, Government |
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Code; or |
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(6) a county court at law. |
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SECTION 5. Section 115.002, Property Code, is amended by |
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adding Subsection (c-1) to read as follows: |
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(c-1) Notwithstanding Subsections (b) and (c), if the |
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settlor is deceased and an administration of the settlor's estate |
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is pending in this state, an action involving the interpretation |
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and administration of an inter vivos trust created by the settlor or |
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a testamentary trust created by the settlor's will may be brought: |
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(1) in a county in which venue is proper under |
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Subsection (b) or (c); or |
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(2) in the county in which the administration of the |
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settlor's estate is pending. |
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SECTION 6. Section 115.011(b), Property Code, is amended to |
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read as follows: |
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(b) Contingent beneficiaries designated as a class are not |
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necessary parties to an action under Section 115.001. The only |
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necessary parties to such an action are: |
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(1) a beneficiary of the trust on whose act or |
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obligation the action is predicated; |
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(2) a beneficiary of the trust designated by name, |
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other than a beneficiary whose interest has been distributed, |
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extinguished, terminated, or paid [in the instrument creating the
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trust]; |
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(3) a person who is actually receiving distributions |
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from the trust estate at the time the action is filed; and |
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(4) the trustee, if a trustee is serving at the time |
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the action is filed. |
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SECTION 7. Sections 116.005(d) and (e), Property Code, are |
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amended to read as follows: |
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(d) If Subsection (c)(4), (5) [(c)(5)], (6), or (7) [, or
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(8)] applies to a trustee and there is more than one trustee, a |
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cotrustee to whom the provision does not apply may make the |
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adjustment unless the exercise of the power by the remaining |
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trustee or trustees is not permitted by the terms of the trust. |
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(e) A trustee may release the entire power conferred by |
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Subsection (a) or may release only the power to adjust from income |
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to principal or the power to adjust from principal to income if the |
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trustee is uncertain about whether possessing or exercising the |
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power will cause a result described in Subsections (c)(1)-(5) |
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[Subsection (c)(1) (6)] or Subsection (c)(7) [(c)(8)] or if the |
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trustee determines that possessing or exercising the power will or |
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may deprive the trust of a tax benefit or impose a tax burden not |
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described in Subsection (c). The release may be permanent or for a |
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specified period, including a period measured by the life of an |
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individual. |
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SECTION 8. Sections 116.205(c) and (d), Property Code, are |
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amended to read as follows: |
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(c) A tax required to be paid by a trustee on the trust's |
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share of an entity's taxable income must be paid [proportionately]: |
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(1) from income to the extent that receipts from the |
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entity are allocated only to income; [and] |
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(2) from principal to the extent that[:
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(A)] receipts from the entity are allocated only |
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to principal; [and
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[(B)
the trust's share of the entity's taxable
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income exceeds the total receipts described in Subdivisions (1) and
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(2)(A).] |
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(3) proportionately from principal and income to the |
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extent that receipts from the entity are allocated to both income |
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and principal; and |
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(4) from principal to the extent that the tax exceeds |
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the total receipts from the entity. |
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(d) [For purposes of this section, receipts allocated to
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principal or income must be reduced by the amount distributed to a
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beneficiary from principal or income for which the trust receives a
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deduction in calculating the tax.] After applying subsections (a) |
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through (c), the trustee shall adjust income or principal receipts |
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to the extent that the trust's taxes are reduced because the trust |
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receives a deduction for payments made to a beneficiary. |
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SECTION 9. (a) Except as otherwise expressly provided by |
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the will, the trust, or this Act, the changes in law made by this Act |
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apply to: |
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(1) a trust existing or created on or after September |
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1, 2011; |
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(2) the estate of a decedent who dies before September |
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1, 2011, if the probate or administration of the estate is pending |
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as of September 1, 2011; and |
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(3) the estate of a decedent who dies on or after |
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September 1, 2011. |
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(b) For a trust existing on September 1, 2011, that was |
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created before that date, the changes in law made by this Act apply |
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only to an act or omission relating to the trust that occurs on or |
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after September 1, 2011. |
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(c) Sections 112.038, 115.002, and 115.011, Property Code, |
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as amended by this Act, apply to a court action commenced on or |
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after September 1, 2011. An action commenced before September 1, |
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2011, is governed by the law applicable to the action immediately |
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before the effective date of this Act, and that law is continued in |
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effect for that purpose. |
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(d) The amendment by this Act of Section 115.001, Property |
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Code, is intended to clarify rather than change existing law. |
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SECTION 10. This Act takes effect September 1, 2011. |