Bill Text: TX HB2913 | 2013-2014 | 83rd Legislature | Enrolled
Bill Title: Relating to trusts.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2013-06-14 - Effective on 9/1/13 [HB2913 Detail]
Download: Texas-2013-HB2913-Enrolled.html
H.B. No. 2913 |
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relating to trusts. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 111.004(12), Property Code, is amended | ||
to read as follows: | ||
(12) "Property" means any type of property, whether | ||
real, tangible or intangible, legal, or equitable, including | ||
property held in any digital or electronic medium. The term also | ||
includes choses in action, claims, and contract rights, including a | ||
contractual right to receive death benefits as designated | ||
beneficiary under a policy of insurance, contract, employees' | ||
trust, retirement account, or other arrangement. | ||
SECTION 2. Section 112.035, Property Code, is amended by | ||
amending Subsection (d) and adding Subsections (g) and (h) to read | ||
as follows: | ||
(d) If the settlor is also a beneficiary of the trust, a | ||
provision restraining the voluntary or involuntary transfer of the | ||
settlor's beneficial interest does not prevent the settlor's | ||
creditors from satisfying claims from the settlor's interest in the | ||
trust estate. A settlor is not considered a beneficiary of a trust | ||
solely because: | ||
(1) a trustee who is not the settlor is authorized | ||
under the trust instrument to pay or reimburse the settlor for, or | ||
pay directly to the taxing authorities, any tax on trust income or | ||
principal that is payable by the settlor under the law imposing the | ||
tax; or | ||
(2) the settlor's interest in the trust was created by | ||
the exercise of a power of appointment by a third party. | ||
(g) For the purposes of this section, property contributed | ||
to the following trusts is not considered to have been contributed | ||
by the settlor, and a person who would otherwise be treated as a | ||
settlor or a deemed settlor of the following trusts may not be | ||
treated as a settlor: | ||
(1) an irrevocable inter vivos marital trust if: | ||
(A) the settlor is a beneficiary of the trust | ||
after the death of the settlor's spouse; and | ||
(B) the trust is treated as: | ||
(i) qualified terminable interest property | ||
under Section 2523(f), Internal Revenue Code of 1986; or | ||
(ii) a general power of appointment trust | ||
under Section 2523(e), Internal Revenue Code of 1986; | ||
(2) an irrevocable inter vivos trust for the settlor's | ||
spouse if the settlor is a beneficiary of the trust after the death | ||
of the settlor's spouse; or | ||
(3) an irrevocable trust for the benefit of a person: | ||
(A) if the settlor is the person's spouse, | ||
regardless of whether or when the person was the settlor of an | ||
irrevocable trust for the benefit of that spouse; or | ||
(B) to the extent that the property of the trust | ||
was subject to a general power of appointment in another person. | ||
(h) For the purposes of Subsection (g), a person is a | ||
beneficiary whether named a beneficiary: | ||
(1) under the initial trust instrument; or | ||
(2) through the exercise of a limited or general power | ||
of appointment by: | ||
(A) that person's spouse; or | ||
(B) another person. | ||
SECTION 3. Chapter 112, Property Code, is amended by adding | ||
Subchapter D to read as follows: | ||
SUBCHAPTER D. DISTRIBUTION OF TRUST PRINCIPAL IN FURTHER TRUST | ||
Sec. 112.071. DEFINITIONS. In this subchapter: | ||
(1) "Authorized trustee" means a person, other than | ||
the settlor, who has authority under the terms of a first trust to | ||
distribute the principal of the trust to or for the benefit of one | ||
or more current beneficiaries. | ||
(2) "Charity" means a charitable entity or a | ||
charitable trust, as those terms are defined by Section 123.001. | ||
(3) "Current beneficiary," with respect to a | ||
particular date, means a person who is receiving or is eligible to | ||
receive a distribution of income or principal from a trust on that | ||
date. | ||
(4) "First trust" means an existing irrevocable inter | ||
vivos or testamentary trust all or part of the principal of which is | ||
distributed in further trust under Section 112.072 or 112.073. | ||
(5) "Full discretion" means the power to distribute | ||
principal to or for the benefit of one or more of the beneficiaries | ||
of a trust that is not limited or modified by the terms of the trust | ||
in any way, including by restrictions that limit distributions to | ||
purposes such as the best interests, welfare, or happiness of the | ||
beneficiaries. | ||
(6) "Limited discretion" means a limited or modified | ||
power to distribute principal to or for the benefit of one or more | ||
beneficiaries of a trust. | ||
(7) "Presumptive remainder beneficiary," with respect | ||
to a particular date, means a beneficiary of a trust on that date | ||
who, in the absence of notice to the trustee of the exercise of the | ||
power of appointment and assuming that any other powers of | ||
appointment under the trust are not exercised, would be eligible to | ||
receive a distribution from the trust if: | ||
(A) the trust terminated on that date; or | ||
(B) the interests of all beneficiaries currently | ||
eligible to receive income or principal from the trust ended on that | ||
date without causing the trust to terminate. | ||
(8) "Principal" means property held in trust for | ||
distribution to a remainder beneficiary when the trust terminates | ||
and includes income of the trust that, at the time of the exercise | ||
of a power of distribution under Section 112.072 or 112.073, is not | ||
currently required to be distributed. | ||
(9) "Second trust" means any irrevocable trust to | ||
which principal is distributed under Section 112.072 or 112.073. | ||
(10) "Successor beneficiary" means a beneficiary | ||
other than a current or presumptive remainder beneficiary. The | ||
term does not include a potential appointee under a power of | ||
appointment held by a beneficiary. | ||
Sec. 112.072. DISTRIBUTION TO SECOND TRUST: TRUSTEE WITH | ||
FULL DISCRETION. (a) An authorized trustee who has the full | ||
discretion to distribute the principal of a trust may distribute | ||
all or part of the principal of that trust in favor of a trustee of a | ||
second trust for the benefit of one or more current beneficiaries of | ||
the first trust who are eligible to receive income or principal from | ||
the trust and for the benefit of one or more successor or | ||
presumptive remainder beneficiaries of the first trust who are | ||
eligible to receive income or principal from the trust. | ||
(b) The authorized trustee may, in connection with the | ||
exercise of a power of distribution under this section, grant a | ||
power of appointment, including a currently exercisable power of | ||
appointment, in the second trust to one or more of the current | ||
beneficiaries of the first trust who, at the time the power of | ||
appointment is granted, is eligible to receive the principal | ||
outright under the terms of the first trust. | ||
(c) If the authorized trustee grants a power of appointment | ||
to a beneficiary under Subsection (b), the class of permissible | ||
appointees in whose favor the beneficiary may appoint under that | ||
power may be broader or different than the current, successor, and | ||
presumptive remainder beneficiaries of the first trust. | ||
(d) If the beneficiaries of the first trust are described as | ||
a class of persons, the beneficiaries of the second trust may | ||
include one or more persons who become members of that class after | ||
the distribution to the second trust. | ||
(e) The authorized trustee shall exercise a power to | ||
distribute under this section in good faith, in accordance with the | ||
terms and purposes of the trust, and in the interests of the | ||
beneficiaries. | ||
Sec. 112.073. DISTRIBUTION TO SECOND TRUST: TRUSTEE WITH | ||
LIMITED DISCRETION. (a) An authorized trustee who has limited | ||
discretion to distribute the principal of a trust may distribute | ||
all or part of the principal of that trust in favor of a trustee of a | ||
second trust as provided by this section. | ||
(b) The current beneficiaries of the second trust must be | ||
the same as the current beneficiaries of the first trust, and the | ||
successor and presumptive remainder beneficiaries of the second | ||
trust must be the same as the successor and presumptive remainder | ||
beneficiaries of the first trust. | ||
(c) The second trust must include the same language | ||
authorizing the trustee to distribute the income or principal of | ||
the trust that was included in the first trust. | ||
(d) If the beneficiaries of the first trust are described as | ||
a class of persons, the beneficiaries of the second trust must | ||
include all persons who become members of that class after the | ||
distribution to the second trust. | ||
(e) If the first trust grants a power of appointment to a | ||
beneficiary of the trust, the second trust must grant the power of | ||
appointment to the beneficiary in the second trust, and the class of | ||
permissible appointees under that power must be the same as the | ||
class of permissible appointees under the power granted by the | ||
first trust. | ||
(f) The authorized trustee shall exercise a power of | ||
distribution under this section in good faith, in accordance with | ||
the terms and purposes of the trust, and in the interests of the | ||
beneficiaries. | ||
Sec. 112.074. NOTICE REQUIRED. (a) An authorized trustee | ||
may exercise a power of distribution under Section 112.072 or | ||
112.073 without the consent of the settlor or beneficiaries of the | ||
first trust and without court approval if the trustee provides to | ||
all of the current beneficiaries and presumptive remainder | ||
beneficiaries written notice of the trustee's decision to exercise | ||
the power. | ||
(b) For the purpose of determining who is a current | ||
beneficiary or presumptive remainder beneficiary entitled to the | ||
notice, a beneficiary is determined as of the date the notice is | ||
sent. A beneficiary includes a person entitled to receive property | ||
under the terms of the first trust. | ||
(c) In addition to the notice required under Subsection (a), | ||
the authorized trustee shall give written notice of the trustee's | ||
decision to the attorney general if: | ||
(1) a charity is entitled to notice; | ||
(2) a charity entitled to notice is no longer in | ||
existence; | ||
(3) the trustee has the authority to distribute trust | ||
assets to one or more charities that are not named in the trust | ||
instrument; or | ||
(4) the trustee has the authority to make | ||
distributions for a charitable purpose described in the trust | ||
instrument, but no charity is named as a beneficiary for that | ||
purpose. | ||
(d) If the beneficiary has a court-appointed guardian or | ||
conservator, the notice required to be given by this section must be | ||
given to that guardian or conservator. If the beneficiary is a | ||
minor for whom no guardian or conservator has been appointed, the | ||
notice required to be given by this section must be given to a | ||
parent of the minor. | ||
(e) The authorized trustee is not required to provide the | ||
notice to a beneficiary who: | ||
(1) is known to the trustee and cannot be located by | ||
the trustee after reasonable diligence; | ||
(2) is not known to the trustee; | ||
(3) waives the requirement of the notice under this | ||
section; or | ||
(4) is a descendant of a beneficiary to whom the | ||
trustee has given notice if the beneficiary and the beneficiary's | ||
ancestor have similar interests in the trust and no apparent | ||
conflict of interest exists between them. | ||
(f) The notice required under Subsection (a) must: | ||
(1) include a statement that: | ||
(A) the authorized trustee intends to exercise | ||
the power of distribution; | ||
(B) the beneficiary has the right to object to | ||
the exercise of the power; and | ||
(C) the beneficiary may petition a court to | ||
approve, modify, or deny the exercise of the trustee's power to make | ||
a distribution under this subchapter; | ||
(2) describe the manner in which the trustee intends | ||
to exercise the power; | ||
(3) specify the date the trustee proposes to | ||
distribute the first trust to the second trust; | ||
(4) include the name and mailing address of the | ||
trustee; | ||
(5) include copies of the agreements of the first | ||
trust and the proposed second trust; | ||
(6) be given not later than the 30th day before the | ||
proposed date of distribution to the second trust; and | ||
(7) be sent by registered or certified mail, return | ||
receipt requested, or delivered in person, unless the notice is | ||
waived in writing by the person to whom notice is required to be | ||
given. | ||
Sec. 112.075. WRITTEN INSTRUMENT REQUIRED. A distribution | ||
under Section 112.072 or 112.073 must be made by a written | ||
instrument that is signed and acknowledged by the authorized | ||
trustee and filed with the records of the first trust and the second | ||
trust. | ||
Sec. 112.076. REFERENCE TO TRUST TERMS. A reference to the | ||
governing instrument or terms of the governing instrument of a | ||
trust includes the terms of a second trust to which that trust's | ||
principal was distributed under this subchapter. | ||
Sec. 112.077. SETTLOR OF SECOND TRUST. (a) Except as | ||
provided by Subsection (b), the settlor of a first trust is | ||
considered to be the settlor of a second trust established under | ||
this subchapter. | ||
(b) If a settlor of a first trust is not also the settlor of | ||
a second trust into which principal of that first trust is | ||
distributed, the settlor of the first trust is considered the | ||
settlor of the portion of the second trust distributed to the second | ||
trust from that first trust under this subchapter. | ||
Sec. 112.078. COURT-ORDERED DISTRIBUTION. (a) An | ||
authorized trustee may petition a court to order a distribution | ||
under this subchapter. | ||
(b) If the authorized trustee receives a written objection | ||
to a distribution under this subchapter from a beneficiary before | ||
the proposed effective date of the distribution specified in the | ||
notice provided to the beneficiary under Section 112.074, the | ||
trustee or the beneficiary may petition a court to approve, modify, | ||
or deny the exercise of the trustee's power to make a distribution | ||
under this subchapter. | ||
(c) If the authorized trustee receives a written objection | ||
to the distribution from the attorney general not later than the | ||
30th day after the date the notice required by Section 112.074 was | ||
received by the attorney general, the trustee may not make a | ||
distribution under Section 112.072 or 112.073 without petitioning a | ||
court to approve or modify the exercise of the trustee's power to | ||
make a distribution under this subchapter. | ||
(d) In a judicial proceeding under this section, the | ||
authorized trustee may present the trustee's reasons for supporting | ||
or opposing a proposed distribution, including whether the trustee | ||
believes the distribution would enable the trustee to better carry | ||
out the purposes of the trust. | ||
(e) The authorized trustee has the burden of proving that | ||
the proposed distribution furthers the purposes of the trust, is in | ||
accordance with the terms of the trust, and is in the interests of | ||
the beneficiaries. | ||
Sec. 112.079. DIVIDED DISCRETION. If an authorized trustee | ||
has full discretion to distribute the principal of a trust and | ||
another trustee has limited discretion to distribute principal | ||
under the trust instrument, the authorized trustee having full | ||
discretion may exercise the power to distribute the trust's | ||
principal under Section 112.072. | ||
Sec. 112.080. LATER DISCOVERED ASSETS. To the extent the | ||
authorized trustee does not provide otherwise: | ||
(1) the distribution of all of the principal of a first | ||
trust to a second trust includes subsequently discovered assets | ||
otherwise belonging to the first trust and principal paid to or | ||
acquired by the first trust after the distribution of the first | ||
trust's principal to the second trust; and | ||
(2) the distribution of part of the principal of a | ||
first trust to a second trust does not include subsequently | ||
discovered assets belonging to the first trust or principal paid to | ||
or acquired by the first trust after the distribution of principal | ||
from the first trust to the second trust, and those assets or that | ||
principal remain the assets or principal of the first trust. | ||
Sec. 112.081. OTHER AUTHORITY TO DISTRIBUTE IN FURTHER | ||
TRUST NOT LIMITED. This subchapter may not be construed to limit | ||
the power of an authorized trustee to distribute property in | ||
further trust under the terms of the governing instrument of a | ||
trust, other law, or a court order. | ||
Sec. 112.082. NEED FOR DISTRIBUTION NOT REQUIRED. An | ||
authorized trustee may exercise the power to distribute principal | ||
to a second trust under Section 112.072 or 112.073 regardless of | ||
whether there is a current need to distribute principal under the | ||
terms of the first trust. | ||
Sec. 112.083. DUTIES NOT CREATED. (a) This subchapter does | ||
not create or imply a duty for an authorized trustee to exercise a | ||
power to distribute principal, and impropriety may not be inferred | ||
as a result of the trustee not exercising a power conferred by | ||
Section 112.072 or 112.073. | ||
(b) An authorized trustee does not have a duty to inform | ||
beneficiaries about the availability of the authority provided by | ||
this subchapter or a duty to review the trust to determine whether | ||
any action should be taken under this subchapter. | ||
Sec. 112.084. CERTAIN DISTRIBUTIONS PROHIBITED. (a) | ||
Except as provided by Subsection (b), an authorized trustee may not | ||
exercise a power to distribute principal of a trust otherwise | ||
provided by Section 112.072 or 112.073 if the distribution is | ||
expressly prohibited by the terms of the governing instrument of | ||
the trust. | ||
(b) A general prohibition of the amendment or revocation of | ||
a trust or a provision that constitutes a spendthrift clause does | ||
not preclude the exercise of a power to distribute principal of a | ||
trust under Section 112.072 or 112.073. | ||
Sec. 112.085. EXCEPTIONS TO POWER OF DISTRIBUTION. An | ||
authorized trustee may not exercise a power to distribute principal | ||
of a trust under Section 112.072 or 112.073 to: | ||
(1) reduce, limit, or modify a beneficiary's current, | ||
vested right to: | ||
(A) receive a mandatory distribution of income or | ||
principal; | ||
(B) receive a mandatory annuity or unitrust | ||
interest; | ||
(C) withdraw a percentage of the value of the | ||
trust; or | ||
(D) withdraw a specified dollar amount from the | ||
trust; | ||
(2) materially impair the rights of any beneficiary of | ||
the trust; | ||
(3) materially limit a trustee's fiduciary duty under | ||
the trust or as described by Section 111.0035; | ||
(4) decrease or indemnify against a trustee's | ||
liability or exonerate a trustee from liability for failure to | ||
exercise reasonable care, diligence, and prudence; | ||
(5) eliminate a provision granting another person the | ||
right to remove or replace the authorized trustee exercising the | ||
distribution power under Section 112.072 or 112.073; or | ||
(6) reduce, limit, or modify in the second trust a | ||
perpetuities provision included in the first trust, unless | ||
expressly permitted by the terms of the first trust. | ||
Sec. 112.086. TAX-RELATED LIMITATIONS. (a) The authorized | ||
trustee may not distribute the principal of a trust under Section | ||
112.072 or 112.073 in a manner that would prevent a contribution to | ||
that trust from qualifying for or that would reduce the exclusion, | ||
deduction, or other federal tax benefit that was originally claimed | ||
for that contribution, including: | ||
(1) the annual exclusion under Section 2503(b), | ||
Internal Revenue Code of 1986; | ||
(2) a marital deduction under Section 2056(a) or | ||
2523(a), Internal Revenue Code of 1986; | ||
(3) the charitable deduction under Section 170(a), | ||
642(c), 2055(a), or 2522(a), Internal Revenue Code of 1986; | ||
(4) direct skip treatment under Section 2642(c), | ||
Internal Revenue Code of 1986; or | ||
(5) any other tax benefit for income, gift, estate, or | ||
generation-skipping transfer tax purposes under the Internal | ||
Revenue Code of 1986. | ||
(b) Notwithstanding Subsection (a), an authorized trustee | ||
may distribute the principal of a first trust to a second trust | ||
regardless of whether the settlor is treated as the owner of either | ||
or both trusts under Sections 671-679, Internal Revenue Code of | ||
1986. | ||
(c) If S corporation stock is held in trust, an authorized | ||
trustee may not distribute all or part of that stock under Section | ||
112.072 or 112.073 to a second trust that is not a permitted | ||
shareholder under Section 1361(c)(2), Internal Revenue Code of | ||
1986. | ||
(d) If an interest in property that is subject to the | ||
minimum distribution rules of Section 401(a)(9), Internal Revenue | ||
Code of 1986, is held in trust, an authorized trustee may not | ||
distribute the trust's interest in the property to a second trust | ||
under Section 112.072 or 112.073 if the distribution would shorten | ||
the minimum distribution period applicable to the property. | ||
Sec. 112.087. COMPENSATION OF TRUSTEE. (a) Except as | ||
provided by Subsection (b) and unless a court, on application of the | ||
authorized trustee, directs otherwise, the trustee may not exercise | ||
a power under Section 112.072 or 112.073 solely to change trust | ||
provisions regarding the determination of the compensation of any | ||
trustee. | ||
(b) An authorized trustee, in connection with the exercise | ||
of a power under Section 112.072 or 112.073 for another valid and | ||
reasonable purpose, may bring the trustee's compensation into | ||
conformance with reasonable limits authorized by state law. | ||
(c) The compensation payable to an authorized trustee of the | ||
first trust may continue to be paid to the trustee of the second | ||
trust during the term of the second trust and may be determined in | ||
the same manner as the compensation would have been determined in | ||
the first trust. | ||
(d) An authorized trustee may not receive a commission or | ||
other compensation for the distribution of a particular asset from | ||
a first trust to a second trust under Section 112.072 or 112.073. | ||
SECTION 4. Section 113.029, Property Code, is amended by | ||
amending Subsection (b) and adding Subsection (e) to read as | ||
follows: | ||
(b) Subject to Subsection (d), and unless the terms of the | ||
trust expressly indicate that a requirement provided by this | ||
subsection does not apply: | ||
(1) a person, other than a settlor, who is a | ||
beneficiary and trustee, trustee affiliate, or discretionary power | ||
holder of a trust that confers on the trustee a power to make | ||
discretionary distributions to or for the trustee's, the trustee | ||
affiliate's, or the discretionary power holder's personal benefit | ||
may exercise the power only in accordance with an ascertainable | ||
standard relating to the trustee's, the trustee affiliate's, or the | ||
discretionary power holder's individual health, education, | ||
support, or maintenance within the meaning of Section 2041(b)(1)(A) | ||
or 2514(c)(1), Internal Revenue Code of 1986; and | ||
(2) a trustee may not exercise a power to make | ||
discretionary distributions to satisfy a legal obligation of | ||
support that the trustee personally owes another person. | ||
(e) In this section, "discretionary power holder" means a | ||
person who has the sole power or power shared with another person to | ||
make discretionary decisions on behalf of a trustee with respect to | ||
distributions from a trust. | ||
SECTION 5. Section 115.002, Property Code, is amended by | ||
adding Subsections (b-1) and (b-2) and amending Subsections (c), | ||
(c-1), and (f) to read as follows: | ||
(b-1) If there are multiple noncorporate trustees and the | ||
trustees maintain a principal office in this state, an action shall | ||
be brought in the county in which: | ||
(1) the situs of administration of the trust is | ||
maintained or has been maintained at any time during the four-year | ||
period preceding the date the action is filed; or | ||
(2) the trustees maintain the principal office. | ||
(b-2) If there are multiple noncorporate trustees and the | ||
trustees do not maintain a principal office in this state, an action | ||
shall be brought in the county in which: | ||
(1) the situs of administration of the trust is | ||
maintained or has been maintained at any time during the four-year | ||
period preceding the date the action is filed; or | ||
(2) any trustee resides or has resided at any time | ||
during the four-year period preceding the date the action is filed. | ||
(c) If there are one or more corporate trustees [ |
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county in which: | ||
(1) the situs of administration of the trust is | ||
maintained or has been maintained at any time during the four-year | ||
period preceding the date the action is filed; or | ||
(2) any [ |
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corporate trustee maintains its principal office in this state. | ||
(c-1) Notwithstanding Subsections (b), (b-1), (b-2), and | ||
(c), if the settlor is deceased and an administration of the | ||
settlor's estate is pending in this state, an action involving the | ||
interpretation and administration of an inter vivos trust created | ||
by the settlor or a testamentary trust created by the settlor's will | ||
may be brought: | ||
(1) in a county in which venue is proper under | ||
Subsection (b), (b-1), (b-2), or (c); or | ||
(2) in the county in which the administration of the | ||
settlor's estate is pending. | ||
(f) For the purposes of this section: | ||
(1) "Corporate trustee" means an entity organized as a | ||
financial institution or a corporation with the authority to act in | ||
a fiduciary capacity. | ||
(2) "Principal office" means: | ||
(A) if there are one or more corporate trustees, | ||
an office of a corporate trustee in this state where the decision | ||
makers for the corporate trustee within this state conduct the | ||
daily affairs of the corporate trustee; or | ||
(B) if there are multiple trustees, none of which | ||
is a corporate trustee, an office in this state that is not | ||
maintained within the personal residence of any trustee, and in | ||
which one or more trustees conducts the daily affairs of the | ||
trustees. | ||
(2-a) The mere presence of an agent or representative | ||
of a [ |
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as defined by Subdivision (2). The principal office of a [ |
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corporate trustee or the principal office maintained by multiple | ||
noncorporate trustees may also be but is not necessarily the same as | ||
the situs of administration of the trust. | ||
(3) "Situs of administration" means the location in | ||
this state where the trustee maintains the office that is primarily | ||
responsible for dealing with the settlor and beneficiaries of the | ||
trust. The situs of administration may also be but is not | ||
necessarily the same as the principal office of a corporate trustee | ||
or the principal office maintained by multiple noncorporate | ||
trustees. | ||
SECTION 6. Section 11.13(j), Tax Code, is amended to read as | ||
follows: | ||
(j) For purposes of this section: | ||
(1) "Residence homestead" means a structure | ||
(including a mobile home) or a separately secured and occupied | ||
portion of a structure (together with the land, not to exceed 20 | ||
acres, and improvements used in the residential occupancy of the | ||
structure, if the structure and the land and improvements have | ||
identical ownership) that: | ||
(A) is owned by one or more individuals, either | ||
directly or through a beneficial interest in a qualifying trust; | ||
(B) is designed or adapted for human residence; | ||
(C) is used as a residence; and | ||
(D) is occupied as the individual's [ |
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principal residence by an owner or, for property owned through a | ||
beneficial interest in a qualifying trust, by a trustor or | ||
beneficiary of the trust who qualifies for the exemption. | ||
(2) "Trustor" means a person who transfers an interest | ||
in real or personal [ |
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whether during the person's lifetime or at death [ |
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(3) "Qualifying trust" means a trust: | ||
(A) in which the agreement, will, or court order | ||
creating the trust, an instrument transferring property to the | ||
trust, or any other agreement that is binding on the trustee | ||
provides that the trustor of the trust or a [ |
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trust [ |
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the trustor's or beneficiary's principal residence residential | ||
property rent free and without charge except for taxes and other | ||
costs and expenses specified in the instrument or court order: | ||
(i) for life; | ||
(ii) for the lesser of life or a term of | ||
years; or | ||
(iii) until the date the trust is revoked or | ||
terminated by an instrument or court order that describes the | ||
property with sufficient certainty to identify it and is recorded | ||
in the real property records of the county in which the property is | ||
located; and | ||
(B) that acquires the property in an instrument | ||
of title or under a court order that: | ||
(i) describes the property with sufficient | ||
certainty to identify it and the interest acquired; and | ||
(ii) is recorded in the real property | ||
records of the county in which the property is located[ |
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SECTION 7. Section 152.025(a), Tax Code, is amended to read | ||
as follows: | ||
(a) A tax is imposed on the recipient of a gift of a motor | ||
vehicle. This section applies only if the person receiving the | ||
motor vehicle: | ||
(1) receives the vehicle from: | ||
(A) the person's: | ||
(i) spouse; | ||
(ii) parent or stepparent; | ||
(iii) grandparent or grandchild; | ||
(iv) child or stepchild; | ||
(v) sibling; or | ||
(vi) guardian; [ |
||
(B) a decedent's estate; | ||
(C) a trust subject to the Texas Trust Code | ||
(Subtitle B, Title 9, Property Code) that was revocable by a | ||
decedent or that was jointly revocable by a decedent and the | ||
decedent's spouse; or | ||
(D) a trust subject to the Texas Trust Code that | ||
is revocable by the person receiving the motor vehicle or that is | ||
jointly revocable by the recipient and the recipient's spouse; | ||
(2) is a trust subject to the Texas Trust Code that is | ||
revocable by the transferor of the motor vehicle or that is jointly | ||
revocable by the transferor and the transferor's spouse; or | ||
(3) is exempt from federal income taxation under | ||
Section 501(a), Internal Revenue Code of 1986, by being listed as an | ||
exempt organization under Section 501(c)(3) of that code, and the | ||
vehicle will be used for the purposes of the organization. | ||
SECTION 8. The legislature intends Subchapter D, Chapter | ||
112, Property Code, as added by this Act, to be a codification of | ||
the common law of this state in effect before the effective date of | ||
this Act. | ||
SECTION 9. (a) Except as otherwise expressly provided by a | ||
trust, a will creating a trust, or this section, the changes in law | ||
made by this Act apply to a trust existing or created on or after | ||
September 1, 2013. | ||
(b) For a trust existing on September 1, 2013, that was | ||
created before that date, the changes in law made by this Act apply | ||
only to an act or omission relating to the trust that occurs on or | ||
after September 1, 2013. | ||
(c) Section 115.002, Property Code, as amended by this Act, | ||
applies only to a court action commenced on or after the effective | ||
date of this Act. An action commenced before the effective date of | ||
this Act is governed by the law in effect immediately before that | ||
date, and the former law is continued in effect for that purpose. | ||
SECTION 10. This Act takes effect September 1, 2013. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 2913 was passed by the House on May 2, | ||
2013, by the following vote: Yeas 147, Nays 0, 2 present, not | ||
voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 2913 was passed by the Senate on May | ||
21, 2013, by the following vote: Yeas 30, Nays 1. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: _____________________ | ||
Date | ||
_____________________ | ||
Governor |