Bill Text: TX SB387 | 2015-2016 | 84th Legislature | Comm Sub

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Bill Title: Relating to trusts and certain other forms of asset protection.

Sponsorship: Bipartisan Bill

Status: (Engrossed - Dead) 2015-05-26 - Placed on General State Calendar [SB387 Detail]

Download: Texas-2015-SB387-Comm_Sub.html

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84R27608 AJA-F
By: Rodríguez S.B. No. 387
(Wray)
Substitute the following for S.B. No. 387: No.

A BILL TO BE ENTITLED
AN ACT
relating to trusts and certain other forms of asset protection.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 42.0021(a) and (b), Property Code, are
amended to read as follows:
(a) In addition to the exemption prescribed by Section
42.001, a person's right to the assets held in or to receive
payments, whether vested or not, under any stock bonus, pension,
annuity, deferred compensation, profit-sharing, or similar plan,
including a retirement plan for self-employed individuals, or a
simplified employee pension plan, an individual retirement account
or individual retirement annuity, including an inherited
individual retirement account or[,] individual retirement annuity,
Roth IRA, or inherited Roth IRA, or a health savings account, and
under any annuity or similar contract purchased with assets
distributed from that type of plan or account, is exempt from
attachment, execution, and seizure for the satisfaction of debts to
the extent the plan, contract, annuity, or account is exempt from
federal income tax, or to the extent federal income tax on the
person's interest is deferred until actual payment of benefits to
the person under Section 223, 401(a), 403(a), 403(b), 408(a), 408A,
457(b), or 501(a), Internal Revenue Code of 1986, including a
government plan or church plan described by Section 414(d) or (e),
Internal Revenue Code of 1986. For purposes of this subsection, the
interest of a person in a plan, annuity, account, or contract
acquired by reason of the death of another person, whether as an
owner, participant, beneficiary, survivor, coannuitant, heir, or
legatee, is exempt to the same extent that the interest of the
person from whom the plan, annuity, account, or contract was
acquired was exempt on the date of the person's death. If this
subsection is held invalid or preempted by federal law in whole or
in part or in certain circumstances, the subsection remains in
effect in all other respects to the maximum extent permitted by law.
(b) Contributions to an individual retirement account,
individual retirement annuity, or Roth IRA that are "excess
contributions" within the meaning of Section 4973 [exceed the
amounts permitted under the applicable provisions] of the Internal
Revenue Code of 1986, and any accrued earnings on such excess
contributions, are not exempt under this section unless otherwise
exempt by law. Amounts qualifying as nontaxable transfers or
rollover contributions under Section 402(a)(5), 403(a)(4),
403(b)(8), or 408(d)(3) of the Internal Revenue Code of 1986 before
January 1, 1993, are treated as exempt amounts under Subsection
(a). Amounts treated as [qualified] rollover contributions under
Section 402A(c)(3), 402A(c)(4), or 408A, Internal Revenue Code of
1986, are treated as exempt amounts under Subsection (a). In
addition, amounts qualifying as nontaxable rollover contributions
under Section 402(c), 402(e)(6), 402(f), 403(a)(4), 403(a)(5),
403(b)(8), 403(b)(10), 408(d)(3), 408(d)(6), 408(d)(9), or 408A of
the Internal Revenue Code of 1986 on or after January 1, 1993, are
treated as exempt amounts under Subsection (a). Amounts qualifying
as nontaxable rollover contributions under Section 223(f)(5) of the
Internal Revenue Code of 1986 on or after January 1, 2004, are
treated as exempt amounts under Subsection (a).
SECTION 2. Section 111.0035(b), Property Code, is amended
to read as follows:
(b) The terms of a trust prevail over any provision of this
subtitle, except that the terms of a trust may not limit:
(1) the requirements imposed under Section 112.031;
(2) the applicability of Section 114.007 to an
exculpation term of a trust;
(3) the periods of limitation for commencing a
judicial proceeding regarding a trust;
(4) a trustee's duty:
(A) with regard to an irrevocable trust, to
respond to a demand for accounting made under Section 113.151 if the
demand is from a beneficiary who, at the time of the demand:
(i) is entitled or permitted to receive
distributions from the trust; or
(ii) would receive a distribution from the
trust if the trust terminated at the time of the demand; and
(B) to act in good faith and in accordance with
the purposes of the trust, except as otherwise provided by
Subchapter E, Chapter 114, with regard to a directing party and an
excluded fiduciary;
(5) a directing party's duty to act in good faith and
in accordance with the purposes of the trust;
(6) the power of a court, in the interest of justice,
to take action or exercise jurisdiction, including the power to:
(A) modify or terminate a trust or take other
action under Section 112.054;
(B) remove a trustee under Section 113.082;
(C) exercise jurisdiction under Section 115.001;
(D) require, dispense with, modify, or terminate
a trustee's bond; or
(E) adjust or deny a trustee's compensation if
the trustee commits a breach of trust; or
(7) [(6)] the applicability of Section 112.038.
SECTION 3. Section 111.004(7), Property Code, is amended to
read as follows:
(7) "Interested person" means a trustee, beneficiary,
or directing party or any other person having an interest in or a
claim against the trust or any person who is affected by the
administration of the trust. Whether a person, excluding a
trustee, directing party, or named beneficiary, is an interested
person may vary from time to time and must be determined according
to the particular purposes of and matter involved in any
proceeding.
SECTION 4. Section 112.035(e), Property Code, is amended to
read as follows:
(e) A beneficiary of the trust may not be considered a
settlor merely because of a lapse, waiver, or release of:
(1) a power described by Subsection (f); or
(2) the beneficiary's right to withdraw a part of the
trust property to the extent that the value of the property affected
by the lapse, waiver, or release in any calendar year does not
exceed the greater of [the amount specified in]:
(A) the amount specified in Section 2041(b)(2) or
2514(e), Internal Revenue Code of 1986; or
(B) the amount specified in Section 2503(b),
Internal Revenue Code of 1986, with respect to the contributions by
each donor.
SECTION 5. Section 112.038, Property Code, is amended to
read as follows:
Sec. 112.038. FORFEITURE CLAUSE. (a) A provision in a
trust that would cause a forfeiture of or void an interest for
bringing any court action, including contesting a trust, is
enforceable unless in a court action determining whether the
forfeiture clause should be enforced, the person who brought the
action contrary to the forfeiture clause establishes by a
preponderance of the evidence that:
(1) just cause existed for bringing the action; and
(2) the action was brought and maintained in good
faith.
(b) This section is not intended to and does not repeal any
law, recognizing that forfeiture clauses generally will not be
construed to prevent a beneficiary from seeking to compel a
fiduciary to perform the fiduciary's duties, seeking redress
against a fiduciary for a breach of the fiduciary's duties, or
seeking a judicial construction of a will or trust.
SECTION 6. Sections 112.054(a) and (c), Property Code, are
amended to read as follows:
(a) On the petition of a trustee or a beneficiary, a court
may order that the trustee be changed, that the terms of the trust
be modified, that the trustee be directed or permitted to do acts
that are not authorized or that are forbidden by the terms of the
trust, that the trustee be prohibited from performing acts required
by the terms of the trust, or that the trust be terminated in whole
or in part, if:
(1) the purposes of the trust have been fulfilled or
have become illegal or impossible to fulfill;
(2) because of circumstances not known to or
anticipated by the settlor, the order will further the purposes of
the trust;
(3) modification of administrative, nondispositive
terms of the trust is necessary or appropriate to prevent waste or
avoid impairment of the trust's administration;
(4) the order is necessary or appropriate to achieve
the settlor's tax objectives and is not contrary to the settlor's
intentions; [or]
(5) subject to Subsection (d):
(A) continuance of the trust is not necessary to
achieve any material purpose of the trust; or
(B) the order is not inconsistent with a material
purpose of the trust; or
(6) the order is necessary to correct a scrivener's
error in the governing document, even if unambiguous, to conform
the terms to the settlor's intention if the settlor's intent with
respect to the error being corrected is proved by clear and
convincing evidence.
(c) The court may direct that an order described by
Subsection (a)(4) or (6) has retroactive effect.
SECTION 7. Sections 112.071(5), (6), and (7), Property
Code, are amended to read as follows:
(5) "Full discretion" means a [the] power to
distribute principal to or for the benefit of one or more of the
beneficiaries of a trust that is not a trust with limited discretion
[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 that is limited by an ascertainable
standard, including the health, education, support, or maintenance
of the beneficiary.
(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 current beneficiaries
[currently eligible to receive income or principal from the trust]
ended on that date without causing the trust to terminate.
SECTION 8. Section 112.072(a), Property Code, is amended to
read as follows:
(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 than one, or all of the 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 than one, or all of the successor or presumptive remainder
beneficiaries of the first trust [who are eligible to receive
income or principal from the trust].
SECTION 9. Section 112.078, Property Code, is amended by
adding Subsection (f) to read as follows:
(f) This section does not limit a beneficiary's right to
bring an action against a trustee for a breach of trust.
SECTION 10. Section 112.085, Property Code, is amended to
read as follows:
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:
(A) under the terms of the trust; or
(B) in a manner that would be prohibited [as
described] by Section 111.0035, except as provided by Subchapter E,
Chapter 114;
(3) [(4)] decrease or indemnify against a trustee's
liability, except as provided by Subchapter E, Chapter 114;
(4) add a provision exonerating [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; or
(7) distribute principal from a trust that is held
solely for charitable purposes and has as beneficiaries only
charitable entities.
SECTION 11. Section 113.018, Property Code, is amended to
read as follows:
Sec. 113.018. EMPLOYMENT AND APPOINTMENT OF AGENTS. (a) A
trustee may employ attorneys, accountants, agents, including
investment agents, and brokers reasonably necessary in the
administration of the trust estate.
(b) Without limiting the trustee's discretion under
Subsection (a), a trustee may grant an agent powers with respect to
property of the trust to act for the trustee in any lawful manner
for purposes of real property transactions.
(c) A trustee acting under Subsection (b) may delegate any
or all of the duties and powers to:
(1) execute and deliver any legal instruments relating
to the sale and conveyance of the property, including affidavits,
notices, disclosures, waivers, or designations or general or
special warranty deeds binding the trustee with vendor's liens
retained or disclaimed, as applicable, or transferred to a
third-party lender;
(2) accept notes, deeds of trust, or other legal
instruments;
(3) approve closing statements authorizing deductions
from the sale price;
(4) receive trustee's net sales proceeds by check
payable to the trustee;
(5) indemnify and hold harmless any third party who
accepts and acts under a power of attorney with respect to the sale;
(6) take any action, including signing any document,
necessary or appropriate to sell the property and accomplish the
delegated powers;
(7) contract to purchase the property for any price on
any terms;
(8) execute, deliver, or accept any legal instruments
relating to the purchase of the property or to any financing of the
purchase, including deeds, notes, deeds of trust, guaranties, or
closing statements;
(9) approve closing statements authorizing payment of
prorations and expenses;
(10) pay the trustee's net purchase price from funds
provided by the trustee;
(11) indemnify and hold harmless any third party who
accepts and acts under a power of attorney with respect to the
purchase; or
(12) take any action, including signing any document,
necessary or appropriate to purchase the property and accomplish
the delegated powers.
(d) A trustee who delegates a power under Subsection (b) is
liable to the beneficiaries or to the trust for an action of the
agent to whom the power was delegated.
(e) A delegation by the trustee under Subsection (b) must be
documented in a written instrument acknowledged by the trustee
before an officer authorized under the law of this state or another
state to take acknowledgments to deeds of conveyance and administer
oaths. A signature on a delegation by a trustee for purposes of
this subsection is presumed to be genuine if the trustee
acknowledges the signature in accordance with Chapter 121, Civil
Practice and Remedies Code.
(f) A delegation to an agent under Subsection (b) terminates
six months from the date of the acknowledgment of the written
delegation unless terminated earlier by:
(1) the death or incapacity of the trustee;
(2) the resignation or removal of the trustee; or
(3) a date specified in the written delegation.
(g) A person that in good faith accepts a delegation under
Subsection (b) without actual knowledge that the delegation is
void, invalid, or terminated, that the purported agent's authority
is void, invalid, or terminated, or that the agent is exceeding or
improperly exercising the agent's authority may rely on the
delegation as if:
(1) the delegation were genuine, valid, and still in
effect;
(2) the agent's authority were genuine, valid, and
still in effect; and
(3) the agent had not exceeded and had properly
exercised the authority.
(h) A trustee may delegate powers under Subsection (b) if
the governing instrument does not affirmatively permit the trustee
to hire agents or expressly prohibit the trustee from hiring
agents.
SECTION 12. Chapter 114, Property Code, is amended by
adding Subchapter E to read as follows:
SUBCHAPTER E. DIRECTED TRUSTS
Sec. 114.101. DEFINITIONS. In this subchapter:
(1) "Directing party" means any investment trust
advisor, distribution trust advisor, or trust protector as provided
by this subchapter. The term does not include:
(A) any person who merely holds:
(i) a general or limited power of
appointment over the trust assets; or
(ii) if the person is a grantor or
beneficiary of the trust, a power to:
(a) prohibit the trustee from taking
any action with respect to the trust; or
(b) remove, appoint, or remove and
appoint a trustee, investment trust advisor, distribution trust
advisor, or trust protector or another directing party, including a
power to designate a plan of succession for future holders of one of
those positions;
(B) a trustee or cotrustee even if the trustee or
cotrustee has the exclusive authority over decisions similar to an
investment trust advisor, distribution trust advisor, or trust
protector in comparison to another trustee or cotrustee who is
relieved of that authority; or
(C) any person who merely holds a power over the
trust assets exercisable in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity, such as a
power to control the beneficial enjoyment of the trust assets in
accordance with Section 674 of the Internal Revenue Code of 1986 or
administrative powers in accordance with Section 675 of the
Internal Revenue Code of 1986.
(2) "Distribution trust advisor" means any one or more
persons given authority by the governing instrument to direct,
consent to, veto, or otherwise exercise all or any portion of the
distribution powers and discretions of the trust, including the
authority to make a discretionary distribution of income or
principal.
(3) "Excluded fiduciary" means any fiduciary directed
by the governing instrument to act in accordance with the exercise
of specified powers by a directing party, to the extent provided by
Section 114.106.
(4) "Fiduciary" means any person expressly given one
or more fiduciary duties by the governing instrument, including a
trustee.
(5) "Governing instrument" refers to the instrument
stating the terms of a trust, including any court order
establishing, construing, or modifying the terms of the trust in
accordance with applicable law.
(6) "Independent fiduciary" means any fiduciary who is
not a grantor of a trust, a beneficiary of a trust, a spouse of a
grantor or a beneficiary of a trust, or a person related or
subordinate to any of those persons within the meaning of Section
672(c) of the Internal Revenue Code of 1986.
(7) "Investment trust advisor" means any one or more
persons given authority by the governing instrument to direct,
consent to, veto, or otherwise exercise all or any portion of the
investment powers of the trust.
(8) "Power" means:
(A) the authority to take or withhold an action
or decision, including an expressly specified power;
(B) the implied power necessary to exercise a
specified power; or
(C) the authority inherent in a general grant of
discretion.
(9) "Trust protector" means any one or more persons
given any one or more powers in accordance with Section 114.105,
whether or not designated with the title of trust protector by the
governing instrument.
Sec. 114.102. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies to all trusts created on or after September 1,
2015, except to the extent the governing instrument expressly
prohibits the application of this subchapter by specific reference
to this subchapter.
(b) Except as provided by Subsection (a), on and after
September 1, 2015, this subchapter applies to a trust existing on or
created on or after that date that:
(1) appoints or provides for a directing party,
including a party granted power or authority effectively comparable
in substance to that of a directing party as provided by this
subchapter;
(2) is modified in accordance with applicable law or
the terms of the governing instrument to appoint or provide for a
directing party; or
(3) is modified in accordance with a court order to
appoint or provide for a directing party, including a party granted
power or authority effectively comparable in substance to that of a
directing party as provided by this subchapter, whether or not the
court order specifies that this subchapter governs the
responsibilities, actions, and liabilities of persons designated
as a directing party or excluded fiduciary.
Sec. 114.103. INVESTMENT TRUST ADVISOR. (a) An investment
trust advisor may be designated in the governing instrument of a
trust. The governing instrument may use the title "investment
trust advisor" or any similar name or description demonstrating the
intent to provide for the position and function of an investment
trust advisor as defined by Section 114.101.
(b) The powers of an investment trust advisor:
(1) may be exercised or not exercised in the
discretion of the investment trust advisor; and
(2) except as provided by this subchapter, are binding
on all other persons, including each beneficiary, fiduciary, and
excluded fiduciary and any other party having an interest in the
trust.
(c) Unless otherwise provided by the governing instrument,
an investment trust advisor's powers include the authority to:
(1) direct the trustee with respect to:
(A) the retention, purchase, transfer,
assignment, sale, or encumbrance of trust property; and
(B) the investment and reinvestment of principal
and income of the trust;
(2) direct the trustee with respect to all management,
control, and voting powers related directly or indirectly to trust
assets, including voting proxies for securities held in trust;
(3) select and employ one or more advisors, managers,
consultants, counselors, or other agents in accordance with Section
113.018; and
(4) determine the frequency and methodology for
valuing any asset for which there is no readily available market
value.
Sec. 114.104. DISTRIBUTION TRUST ADVISOR. (a) A
distribution trust advisor may be designated in the governing
instrument of a trust. The governing instrument may use the title
"distribution trust advisor" or any similar name or description
demonstrating the intent to provide for the position and function
of a distribution trust advisor as defined by Section 114.101.
(b) The powers of a distribution trust advisor:
(1) may be exercised or not exercised in the
discretion of the distribution trust advisor; and
(2) except as otherwise provided by this subchapter,
are binding on all other persons, including each beneficiary,
fiduciary, and excluded fiduciary and any other party having an
interest in the trust.
(c) Unless otherwise provided in the governing instrument,
a distribution trust advisor's powers include the authority to
direct the trustee with regard to all decisions relating directly
or indirectly to discretionary distributions to or for one or more
beneficiaries.
Sec. 114.105. TRUST PROTECTOR. (a) A trust protector may
be designated in the governing instrument of a trust. The governing
instrument may use the title "trust protector" or any similar name
or description demonstrating the intent to provide for the position
and function of a trust protector as defined by Section 114.101.
(b) The powers of a trust protector:
(1) may be exercised or not exercised in the
discretion of the trust protector; and
(2) except as otherwise provided by this subchapter,
are binding on all other persons, including each beneficiary,
investment trust advisor, distribution trust advisor, fiduciary,
and excluded fiduciary and any other party having an interest in the
trust.
(c) The terms of the governing instrument shall determine
the powers of the trust protector, and there are no default powers.
The powers granted to a trust protector by the governing instrument
may include the authority to:
(1) modify or amend the governing instrument to
achieve favorable tax status or respond to changes in the Internal
Revenue Code of 1986 or other federal law, state law, or rulings or
regulations under federal or state law;
(2) increase, decrease, or modify the interests of any
beneficiary or beneficiaries of the trust;
(3) modify or amend the terms of any power of
appointment granted by the trust, so long as the modification or
amendment does not grant a beneficial interest to any individual,
class of individuals, or other party not specifically provided for
under the governing instrument;
(4) remove, appoint, or remove and appoint a trustee,
investment trust advisor, or distribution trust advisor or another
directing party, including the authority to designate a plan of
succession for future holders of one of those positions;
(5) terminate the trust, including the authority to
determine how the trustee shall distribute the trust property to be
consistent with the purposes of the trust;
(6) change the situs of the trust, the governing law of
the trust, or both;
(7) appoint one or more successor trust protectors,
including the authority to designate a plan of succession for
future trust protectors;
(8) interpret terms of the governing instrument at the
request of the trustee;
(9) advise the trustee on matters concerning a
beneficiary; or
(10) amend or modify the governing instrument to:
(A) take advantage of laws governing restraints
on alienation or distribution of trust property; or
(B) improve the administration of the trust.
(d) Except as otherwise provided by the governing
instrument, a trust protector has no duty to monitor any
fiduciary's conduct.
(e) If a charity is a beneficiary of the trust, a trust
protector must give notice to the attorney general not later than
the 60th day before the date the trust protector takes an action
authorized by Subsection (c)(2), (3), (4), (5), or (6).
Sec. 114.106. EXCLUDED FIDUCIARY. (a) If a fiduciary is
directed by the governing instrument to act in accordance with the
exercise of specified powers by a directing party, those specified
powers are considered granted not to the fiduciary but to the
directing party, and the fiduciary is considered excluded from
exercising those specified powers.
(b) If a governing instrument provides that a fiduciary, as
to one or more specified matters, is to act, omit action, or make
decisions only with the consent of a directing party, then the
fiduciary is considered an excluded fiduciary only with respect to
those matters.
Sec. 114.107. DUTY AND LIABILITY OF DIRECTING PARTY.
(a) Within the limits of the directing party's authority, a
directing party:
(1) is a fiduciary of the trust;
(2) except as provided by the governing instrument,
has all the powers and protections granted to trustees under this
subtitle; and
(3) is subject to the same fiduciary duties and
standards applicable to a trustee of a trust, unless the governing
instrument provides otherwise.
(b) The governing instrument may not limit the duties of the
directing party or relieve a directing party of any duties or
standards that could not be limited as to a trustee or of which a
trustee could not be relieved, including the duties and standards
set forth in Sections 111.0035 and 114.007.
Sec. 114.108. DUTY AND LIABILITY OF EXCLUDED FIDUCIARY.
(a) An excluded fiduciary shall act in accordance with the
governing instrument and comply with the directing party's exercise
of the powers granted to the directing party by the governing
instrument.
(b) Notwithstanding Section 111.0035, if the terms of a
trust provide that an excluded fiduciary is to follow the direction
of a directing party or act only with a directing party's consent or
direction:
(1) if the excluded fiduciary complies with the
direction of a directing party, the excluded fiduciary is not
liable for any loss resulting directly or indirectly from any act
taken or not taken by the excluded fiduciary pursuant to the
directing party's direction; or
(2) if the directing party fails to direct, consent,
or act after having been requested to do so by the excluded
fiduciary, the excluded fiduciary is not liable for any loss
resulting directly or indirectly from any act taken or not taken by
the excluded fiduciary as a result of the directing party's failure
to direct, consent, or act.
(c) Subsection (b) does not apply if:
(1) the direction is contrary to an express
prohibition or mandate in the governing instrument, which shall be
evaluated exclusively on the terms of the governing instrument and
without reference to any judicial or legal standard;
(2) the excluded fiduciary acts in a manner that
constitutes wilful misconduct; or
(3) the excluded fiduciary has actual knowledge that
the direction would constitute fraud as applied to the fiduciary
duties of the directing party.
(d) Unless otherwise provided by the governing instrument,
an excluded fiduciary does not have any duty to:
(1) monitor the directing party's conduct;
(2) provide the directing party with advice or consult
with the directing party;
(3) inform or warn any directing party or any
beneficiary or third party that the excluded fiduciary disagrees
with any of the directing party's actions or directions;
(4) do anything to prevent the directing party from
giving any direction or taking any action; or
(5) compel the directing party to redress the
directing party's action or direction.
(e) Absent clear evidence to the contrary, the actions of an
excluded fiduciary pertaining to matters within the limits of
authority of the directing party, including confirming that the
directing party's directions have been carried out and recording
and reporting actions taken pursuant to the directing party's
direction, shall be presumed to be administrative actions taken by
the excluded fiduciary and may not be considered an undertaking by
the excluded fiduciary to monitor the directing party's actions or
participate in actions within the limits of the directing party's
authority.
(f) An excluded fiduciary may, but is not required to,
obtain and rely on an opinion of counsel on any matter relevant to
this subchapter.
Sec. 114.109. JURISDICTION. By accepting an appointment to
serve as a directing party of a trust that is subject to the laws of
this state, the directing party submits to the jurisdiction of the
courts of this state even if investment advisory agreements or
other related agreements provide otherwise, and the directing party
may be made a party to any action or proceeding in which issues
relate to a decision or action of the directing party.
Sec. 114.110. TAX SAVINGS PROVISIONS. Notwithstanding the
other provisions of this subchapter, and except as otherwise
provided by the governing instrument, none of the default powers
granted to a directing party authorize:
(1) a grantor of a trust to direct distributions;
(2) any directing party who is a beneficiary, or a
directing party who is not an independent fiduciary and who was
appointed by a beneficiary, to direct distributions other than in
accordance with the limits of Section 113.029;
(3) any directing party to have any incidents of
ownership over a life insurance policy insuring the life of the
directing party or the directing party's spouse; or
(4) any directing party to hold any power that would
cause the inclusion of assets of the trust in the directing party's
estate that would not otherwise be included.
SECTION 13. Sections 115.002(b-1) and (b-2), Property Code,
are amended to read as follows:
(b-1) If there are multiple [noncorporate] trustees none of
whom is a corporate trustee 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 none of
whom is a corporate trustee 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.
SECTION 14. Section 181.083, Property Code, is amended by
adding Subsections (c) and (d) to read as follows:
(c) To the extent specified in an instrument in which a
donee exercises a power, any estate or interest in real or personal
property created through the exercise of the power by the donee is
considered to have been created at the time of the exercise of the
donee's power and not at the time of the creation of the donee's
power, provided that in the instrument the donee:
(1) specifically refers to Section 181.083(c),
Property Code;
(2) specifically asserts an intention to exercise a
power of appointment by creating another power of appointment
described in Section 2041(a)(3) or Section 2514(d), Internal
Revenue Code of 1986; or
(3) specifically asserts an intention to postpone the
vesting of any estate or interest in the property that is subject to
the power, or suspend the absolute ownership or power of alienation
of that property, for a period ascertainable without regard to the
date of the creation of the donee's power.
(d) Subsection (c) applies regardless of whether the
donee's power may be exercised in favor of the donee, the donee's
creditors, the donee's estate, or the creditors of the donee's
estate.
SECTION 15. (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, 2015.
(b) For a trust existing on September 1, 2015, 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, 2015.
SECTION 16. Sections 114.003(b) and (c), Property Code, are
repealed.
SECTION 17. This Act takes effect September 1, 2015.