Bill Text: TX HB2333 | 2023-2024 | 88th Legislature | Enrolled

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Bill Title: Relating to noncharitable trusts without an ascertainable beneficiary.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2023-06-18 - Effective immediately [HB2333 Detail]

Download: Texas-2023-HB2333-Enrolled.html

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H.B. No. 2333

AN ACT
relating to noncharitable trusts without an ascertainable
beneficiary.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 111.004(4), Property Code, is amended to
read as follows:
(4) "Express trust" means a fiduciary relationship
with respect to property which arises as a manifestation by the
settlor of an intention to create the relationship and which
subjects the person holding title to the property to equitable
duties to deal with the property:
(A) for the benefit of another person; or
(B) for a particular purpose, in the case of a
trust subject to Subchapter F.
SECTION 2. Chapter 112, Property Code, is amended by adding
Subchapter F to read as follows:
SUBCHAPTER F. NONCHARITABLE TRUST WITHOUT ASCERTAINABLE
BENEFICIARY
Sec. 112.121. VALIDITY OF TRUST; APPLICABILITY. (a) A
trust may be created for a noncharitable purpose without a definite
or definitely ascertainable beneficiary. A noncharitable purpose
may include seeking economic or noneconomic benefits.
(b) This subchapter does not apply to a trust created under
Section 112.037.
Sec. 112.122. ENFORCEMENT OF TRUST. (a) A trust created
under this subchapter must be enforced by one or more persons
appointed in the terms of the trust to serve as a trust enforcer.
(b) A trust enforcer shall enforce the purpose and terms of
the trust. The trust enforcer is not a beneficiary of the trust,
but has the rights of a beneficiary provided under this title and
the common law of this state, or as otherwise provided by the terms
of the trust.
(c) A trust enforcer shall exercise any authority granted
under the terms of the trust or the provisions of this section as a
fiduciary owing a duty to the trust and is entitled to reasonable
compensation for serving as trust enforcer.
(d) A trust enforcer may consent to, waive, object to, or
petition an appropriate court concerning any matter regarding the
purpose or administration of the trust.
(e) Except as otherwise provided by the terms of the trust,
if more than one person is acting as a trust enforcer, any action in
that capacity must be decided by the majority vote of the persons
acting as trust enforcers. If there are an even number of trust
enforcers and a majority vote cannot be established, the decision
of the trustee controls.
(f) The terms of the trust may provide for the succession of
a trust enforcer or a process of appointing any successor trust
enforcer.
(g) If no person is serving as a trust enforcer for a trust
created under this subchapter, a court properly exercising
jurisdiction shall appoint one or more persons to serve as the trust
enforcer.
Sec. 112.123. APPLICATION OR DISTRIBUTION OF TRUST
PROPERTY. (a) Property of a trust created under this subchapter
may be applied only to the intended purpose of the trust, except to
the extent that a court finds that the value of the trust property
exceeds the amount required for the intended purpose of the trust.
(b) Except as provided by the terms of the trust, property
found by a court not to be required for the trust's intended purpose
shall be distributed:
(1) as provided by the terms of the trust; or
(2) if the trust does not provide for the distribution
of such property, to the settlor if then living or to the settlor's
successors in interest.
SECTION 3. Subchapter F, Chapter 112, Property Code, as
added by this Act, applies only to a trust created on or after the
effective date of this Act.
SECTION 4. 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 September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2333 was passed by the House on May 9,
2023, by the following vote: Yeas 137, Nays 3, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2333 was passed by the Senate on May
24, 2023, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor