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AN ACT
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relating to the fiduciary status of a directed trust advisor. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 114.0031, Property Code, is amended by |
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amending Subsection (e) and adding Subsection (e-1) to read as |
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follows: |
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(e) If the terms of a trust give a person the authority to |
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direct, consent to, or disapprove a trustee's actual or proposed |
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investment decisions, distribution decisions, or other decisions, |
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the person is [considered to be] an advisor. An advisor is [and] a |
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fiduciary regardless of trust terms to the contrary [when
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exercising that authority] except that the trust terms may provide |
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that an advisor acts in a nonfiduciary capacity if: |
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(1) the advisor's only power is to remove and appoint |
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trustees, advisors, trust committee members, or other protectors; |
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and |
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(2) the advisor does not exercise that power to |
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appoint the advisor's self to a position described by Subdivision |
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(1). |
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(e-1) Subsection (e) does not prohibit the exercise of a |
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power in a nonfiduciary capacity as required by the Internal |
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Revenue Code for a grantor or other person to be treated as the |
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owner of any portion of the trust for federal income tax purposes. |
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SECTION 2. (a) Except as specifically provided by a trust |
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term in effect before September 1, 2019, the changes in law made by |
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this Act apply to a trust created before, on, or after September 1, |
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2019, with respect to an action taken or not taken on or after |
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September 1, 2019, by a trustee, custodian, or other person with |
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respect to the trust. |
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(b) An action taken or not taken with respect to a trust |
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before September 1, 2019, is governed by the law that applied to the |
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action taken or not taken immediately before September 1, 2019, and |
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that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2019. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 2246 was passed by the House on May 2, |
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2019, by the following vote: Yeas 143, Nays 0, 1 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 2246 was passed by the Senate on May |
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15, 2019, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |