reglab/statecodes huggingface dataset:
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter A. Creation › Section 112.010. Presumed Acceptance by Beneficiary; Disclaimer

Sec. 112.010.  PRESUMED ACCEPTANCE BY BENEFICIARY; DISCLAIMER.  (a)  Acceptance by a beneficiary of an interest in a trust is presumed.
(b)  A disclaimer of an interest in or power over trust property is governed by Chapter 240.
(c)  Repealed by Acts 2015, 84th Leg., R.S., Ch. 562 , Sec. 16(4), eff. September 1, 2015.
(c-1)  Repealed by Acts 2015, 84th Leg., R.S., Ch. 562 , Sec. 16(4), eff. September 1, 2015.
(c-2)  Repealed by Acts 2015, 84th Leg., R.S., Ch. 562 , Sec. 16(4), eff. September 1, 2015.
(d)  Repealed by Acts 2015, 84th Leg., R.S., Ch. 562 , Sec. 16(4), eff. September 1, 2015.
(e)  Repealed by Acts 2015, 84th Leg., R.S., Ch. 562 , Sec. 16(4), eff. September 1, 2015.
Added by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.  Amended by Acts 1987, 70th Leg., ch. 467, Sec. 3, eff. Sept. 1, 1987;  Acts 1993, 73rd Leg., ch. 846, Sec. 3, eff. Sept. 1, 1993.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 672 (H.B. 2368), Sec. 2, eff. September 1, 2009.
Acts 2011, 82nd Leg., R.S., Ch. 657 (S.B. 1197), Sec. 1, eff. September 1, 2011.
Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 13, eff. September 1, 2015.
Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 14, eff. September 1, 2015.
Acts 2015, 84th Leg., R.S., Ch. 562 (H.B. 2428), Sec. 16(4), eff. September 1, 2015.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter A. Creation › Section 112.011. Posthumous Class Gifts Membership

Sec. 112.011.  POSTHUMOUS CLASS GIFTS MEMBERSHIP.  (a)  A right to take as a member under a class gift does not accrue to any person unless the person is born before, or is in gestation at, the time of death of the person by which the class is measured and survives that person by at least 120 hours.
(b)  For purposes of Subsection (a), a person is:
(1)  considered to be in gestation if insemination or implantation occurs at or before the time of death of the person by which the class is measured; and
(2)  presumed to be in gestation at the time of death of the person by which the class is measured if the person was born before the 301st day after the date of the person's death.
(c)  A provision in the trust instrument that is contrary to this section prevails over this section.
Added by Acts 2017, 85th Leg., R.S., Ch. 844 (H.B. 2271), Sec. 37, eff. September 1, 2017.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.031. Trust Purposes

Sec. 112.031.  TRUST PURPOSES.  A trust may be created for any purpose that is not illegal.  The terms of the trust may not require the trustee to commit a criminal or tortious act or an act that is contrary to public policy.
Amended by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.032. Active and Passive Trusts; Statute of Uses

Sec. 112.032.  ACTIVE AND PASSIVE TRUSTS;  STATUTE OF USES.  (a)  Except as provided by Subsection (b), title to real property held in trust vests directly in the beneficiary if the trustee has neither a power nor a duty related to the administration of the trust.
(b)  The title of a trustee in real property is not divested if the trustee's title is not merely nominal but is subject to a power or duty in relation to the property.
Amended by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.033. Reservation of Interests and Powers by Settlor

Sec. 112.033.  RESERVATION OF INTERESTS AND POWERS BY SETTLOR.  If during the life of the settlor an interest in a trust or the trust property is created in a beneficiary other than the settlor, the disposition is not invalid as an attempted testamentary disposition merely because the settlor reserves or retains, either in himself or another person who is not the trustee, any or all of the other interests in or powers over the trust or trust property, such as:
(1)  a beneficial life interest for himself;
(2)  the power to revoke, modify, or terminate the trust in whole or in part;
(3)  the power to designate the person to whom or on whose behalf the income or principal is to be paid or applied;
(4)  the power to control the administration of the trust in whole or in part;
(5)  the right to exercise a power or option over property in the trust or over interests made payable to the trust under an employee benefit plan, life insurance policy, or otherwise;  or
(6)  the power to add property or cause additional employee benefits, life insurance, or other interests to be made payable to the trust at any time.
Amended by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.0335. Construction of Certain Trusts

Sec. 112.0335.  CONSTRUCTION OF CERTAIN TRUSTS.  (a)  Unless the terms of the trust provide otherwise, if a trust is created and amendable or revocable by the settlor, or by the settlor and the settlor's spouse, Chapter 255, Estates Code, applies at the settlor's death to the construction and interpretation of at-death transfers as if the settlor of the trust is the testator, the beneficiaries of the at-death transfer are devisees, and the at-death transfers are devises.
(b)  Section 355.109, Estates Code, applies to the abatement of at-death transfers.
(c)  For purposes of this section, "at-death transfer" means a transfer pursuant to the terms of a trust described by Subsection (a) that is intended to take effect or become irrevocable by reason of the settlor's death.
(d)  For purposes of the Estates Code provisions specified by this section:
(1)  an at-death transfer of specifically identifiable trust property is a specific bequest, devise, or legacy;
(2)  an at-death transfer from the general assets of the trust that does not transfer specifically identifiable property is a general bequest, devise, or legacy; and
(3)  an at-death transfer of trust property that remains after all specific and general transfers have been satisfied is the residuary estate.
Added by Acts 2019, 86th Leg., R.S., Ch. 1112 (H.B. 2245), Sec. 2, eff. September 1, 2019.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.034. Merger

Sec. 112.034.  MERGER.  (a)  If a settlor transfers both the legal title and all equitable interests in property to the same person or retains both the legal title and all equitable interests in property in himself as both the sole trustee and the sole beneficiary, a trust is not created and the transferee holds the property as his own.  This subtitle does not invalidate a trust account validly created and in effect under Chapter 113, Estates Code.
(b)  Except as provided by Subsection (c) of this section, a trust terminates if the legal title to the trust property and all equitable interests in the trust become united in one person.
(c)  The title to trust property and all equitable interests in the trust property may not become united in a beneficiary, other than the settlor, whose interest is protected under a spendthrift trust, and in that case the court shall appoint a new trustee or cotrustee to administer the trust for the benefit of the beneficiary.
Added by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 846 (H.B. 2780), Sec. 13, eff. September 1, 2019.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.036. Rule Against Perpetuities

Sec. 112.036.  RULE AGAINST PERPETUITIES.  (a)  The rule against perpetuities applies to an interest in a trust other than a charitable trust.
(b)  For purposes of this section, the effective date is the date the governing instrument creating an interest in the trust becomes irrevocable with respect to that interest. If an interest in one trust is distributed to another trust with a different effective date, the effective date of that interest in the second trust becomes the earlier of the effective dates of the two trusts.
(c)  An interest in a trust must vest, if at all:
(1)  if the effective date is on or after September 1, 2021, not later than the later of:
(A)  300 years after the effective date; or
(B)  21 years after some life in being at the time of the effective date, plus a period of gestation; or
(2)  if the effective date is before September 1, 2021, except as provided by Subsection (d), not later than 21 years after some life in being at the time of the effective date, plus a period of gestation.
(d)  An interest in a trust that has an effective date before September 1, 2021, may vest as described by Subsection (c)(1) if the trust instrument provides that an interest in the trust vests under the provisions of this section applicable to trusts on the date that the interest vests.
(e)  Any interest in a trust may be reformed or construed to the extent and as provided by Section 5.043.
(f)  Under this section, a settlor of a trust may not direct that a real property asset be retained or refuse that a real property asset may be sold for a period longer than 100 years.
Added by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.  Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 18, Sec. 10, eff. Oct. 2, 1984.
Amended by:
Acts 2021, 87th Leg., R.S., Ch. 792 (H.B. 654), Sec. 1, eff. September 1, 2021.
Acts 2023, 88th Leg., R.S., Ch. 446 (H.B. 2196), Sec. 3, eff. June 9, 2023.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.037. Trust for Care of Animal

Sec. 112.037.  TRUST FOR CARE OF ANIMAL.  (a)  A trust may be created to provide for the care of an animal alive during the settlor's lifetime.  The trust terminates on the death of the animal or, if the trust is created to provide for the care of more than one animal alive during the settlor's lifetime, on the death of the last surviving animal.
(b)  A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if a person is not appointed in the terms of the trust, by a person appointed by the court.  A person having an interest in the welfare of an animal that is the subject of a trust authorized by this section may request the court to appoint a person to enforce the trust or to remove a person appointed to enforce the trust.
(c)  Except as provided by Subsections (d) and (e), property of a trust authorized by this section may be applied only to the property's intended use under the trust.
(d)  Property of a trust authorized by this section may be applied to a use other than the property's intended use under the trust to the extent the court determines that the value of the trust property exceeds the amount required for the intended use.
(e)  Except as otherwise provided by the terms of the trust, property not required for the trust's intended use must be distributed to:
(1)  if the settlor is living at the time the trust property is distributed, the settlor; or
(2)  if the settlor is not living at the time the trust property is distributed:
(A)  if the settlor has a will, beneficiaries under the settlor's will; or
(B)  in the absence of an effective provision in a will, the settlor's heirs.
(f)  For purposes of Section 112.036, the lives in being used to determine the maximum duration of a trust authorized by this section are:
(1)  the individual beneficiaries of the trust;
(2)  the individuals named in the instrument creating the trust; and
(3)  if the settlor or settlors are living at the time the trust becomes irrevocable, the settlor or settlors of the trust or, if the settlor or settlors are not living at the time the trust becomes irrevocable, the individuals who would inherit the settlor or settlors' property under the law of this state had the settlor or settlors died intestate at the time the trust becomes irrevocable.
Added by Acts 2005, 79th Leg., Ch. 148 (H.B. 1190), Sec. 6, eff. January 1, 2006.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter B. Validity › Section 112.038. Forfeiture Clause

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.
Added by Acts 2009, 81st Leg., R.S., Ch. 414 (H.B. 1969), Sec. 3, eff. June 19, 2009.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 657 (S.B. 1197), Sec. 2, eff. September 1, 2011.
Acts 2013, 83rd Leg., R.S., Ch. 351 (H.B. 2380), Sec. 3.01, eff. September 1, 2013.
Acts 2017, 85th Leg., R.S., Ch. 62 (S.B. 617), Sec. 3, eff. September 1, 2017.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter C. Revocation, Modification, and Termination of Trusts › Section 112.051. Revocation, Modification, or Amendment by Settlor

Sec. 112.051.  REVOCATION, MODIFICATION, OR AMENDMENT BY SETTLOR.  (a)  A settlor may revoke the trust unless it is irrevocable by the express terms of the instrument creating it or of an instrument modifying it.
(b)  The settlor may modify or amend a trust that is revocable, but the settlor may not enlarge the duties of the trustee without the trustee's express consent.
(c)  If the trust was created by a written instrument, a revocation, modification, or amendment of the trust must be in writing.
Amended by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter C. Revocation, Modification, and Termination of Trusts › Section 112.052. Termination

Sec. 112.052.  TERMINATION.  A trust terminates if by its terms the trust is to continue only until the expiration of a certain period or until the happening of a certain event and the period of time has elapsed or the event has occurred.  If an event of termination occurs, the trustee may continue to exercise the powers of the trustee for the reasonable period of time required to wind up the affairs of the trust and to make distribution of its assets to the appropriate beneficiaries.  The continued exercise of the trustee's powers after an event of termination does not affect the vested rights of beneficiaries of the trust.
Amended by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter C. Revocation, Modification, and Termination of Trusts › Section 112.053. Disposition of Trust Property on Failure of Trust

Sec. 112.053.  DISPOSITION OF TRUST PROPERTY ON FAILURE OF TRUST.  The settlor may provide in the trust instrument how property may or may not be disposed of in the event of failure, termination, or revocation of the trust.
Added by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.  Amended by Acts 1991, 72nd Leg., ch. 895, Sec. 17, eff. Sept. 1, 1991.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter C. Revocation, Modification, and Termination of Trusts › Section 112.056. Permissive Amendment by Trustee of Charitable Trust

Sec. 112.056.  PERMISSIVE AMENDMENT BY TRUSTEE OF CHARITABLE TRUST.  (a)  If the settlor of a trust that is described under Subsection (a) of Section 112.055 of this Act is living and competent and consents, the trustee may, without judicial proceedings, amend the trust to expressly include or exclude the provisions required by Subsection (a) of Section 112.055 of this Act.
(b)  The amendment must be in writing, and it is effective when a duplicate original is filed with the attorney general's office.
Added by Acts 1983, 68th Leg., p. 3332, ch. 567, art. 2, Sec. 2, eff. Jan. 1, 1984.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter C. Revocation, Modification, and Termination of Trusts › Section 112.059. Termination of Uneconomic Trust

Sec. 112.059.  TERMINATION OF UNECONOMIC TRUST.  (a)  After notice to beneficiaries who are distributees or permissible distributees of trust income or principal or who would be distributees or permissible distributees if the interests of the distributees or the trust were to terminate and no powers of appointment were exercised, the trustee of a trust consisting of trust property having a total value of less than $50,000 may terminate the trust if the trustee concludes after considering the purpose of the trust and the nature of the trust assets that the value of the trust property is insufficient to justify the continued cost of administration.
(b)  On termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.
(c)  A trustee may not exercise a power described by Subsection (a) if the trustee's possession of the power would cause the assets of the trust to be included in the trustee's estate for federal estate tax purposes.
(d)  This section does not apply to an easement for conservation or preservation.
Added by Acts 2007, 80th Leg., R.S., Ch. 451 (H.B. 564), Sec. 5, eff. September 1, 2007.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.071. Definitions

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 a 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.
(6)  "Limited discretion" means:
(A)  a power to distribute principal according to mandatory distribution provisions under which the trustee has no discretion; or
(B)  a 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 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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 62 (S.B. 617), Sec. 7, eff. September 1, 2017.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.0715. Creation of Second Trust

Sec. 112.0715.  CREATION OF SECOND TRUST.  (a)  A second trust may be created by a distribution of principal under Section 112.072 or 112.073 to a second trust that retains the name used by the first trust.  The second trust may retain, subject to applicable federal law, the tax identification number of the first trust.
(b)  If a second trust is created by a distribution of principal under Section 112.072 or 112.073 to a trust that retains the name of the first trust, the property is not required to be retitled.
(c)  Repealed by Acts 2023, 88th Leg., R.S., Ch. 446 (H.B. 2196), Sec. 6, eff. June 9, 2023.
Added by Acts 2019, 86th Leg., R.S., Ch. 1112 (H.B. 2245), Sec. 4, eff. September 1, 2019.
Amended by:
Acts 2023, 88th Leg., R.S., Ch. 446 (H.B. 2196), Sec. 4, eff. June 9, 2023.
Acts 2023, 88th Leg., R.S., Ch. 446 (H.B. 2196), Sec. 6, eff. June 9, 2023.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.072. Distribution to Second Trust: Trustee With Full Discretion

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, more than one, or all of the current beneficiaries of the first trust and for the benefit of one, more than one, or all of the successor or presumptive remainder beneficiaries of the first 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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 62 (S.B. 617), Sec. 8, eff. September 1, 2017.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.073. Distribution to Second Trust: Trustee With Limited Discretion

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.075. Written Instrument Required

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.076. Reference to Trust Terms

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.077. Settlor of Second Trust

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.078. Court-Ordered Distribution

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.
(f)  This section does not limit a beneficiary's right to bring an action against a trustee for a breach of trust.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 62 (S.B. 617), Sec. 10, eff. September 1, 2017.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.079. Divided Discretion

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.080. Later Discovered Assets

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.081. Other Authority to Distribute in Further Trust Not Limited

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.082. Need for Distribution Not Required

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.083. Duties Not Created

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.084. Certain Distributions Prohibited

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.085. Exceptions to Power of Distribution

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 limit a trustee's fiduciary duty:
(A)  under the terms of the trust; or
(B)  in a manner that would be prohibited by Section 111.0035;
(3)  decrease or indemnify against a trustee's liability;
(4)  add a provision exonerating 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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
Amended by:
Acts 2017, 85th Leg., R.S., Ch. 62 (S.B. 617), Sec. 11, eff. September 1, 2017.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.086. Tax-Related Limitations

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter D. Distribution of Trust Principal in Further Trust › Section 112.087. Compensation of Trustee

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.
Added by Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 3, eff. September 1, 2013.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter E. Effect of Dissolution of Marriage on Certain Transfers in Trust › Section 112.101. Definitions

Sec. 112.101.  DEFINITIONS.  In this subchapter:
(1)  "Disposition or appointment of property" includes a transfer of property to or a provision of another benefit to a beneficiary under a trust instrument.
(2)  "Divorced individual" means an individual whose marriage has been dissolved by divorce, annulment, or a declaration that the marriage is void.
(3)  "Relative" means an individual who is related to another individual by consanguinity or affinity, as determined under Sections 573.022 and 573.024, Government Code, respectively.
(4)  "Revocable," with respect to a disposition, appointment, provision, or nomination, means a disposition to, appointment of, provision in favor of, or nomination of an individual's spouse or any relative of the individual's spouse who is not a relative of the individual that is contained in a trust instrument executed by the individual before the dissolution of the individual's marriage to the spouse and that the individual was solely empowered by law or by the trust instrument to revoke regardless of whether the individual had the capacity to exercise the power at that time.
Added by Acts 2019, 86th Leg., R.S., Ch. 1112 (H.B. 2245), Sec. 5, eff. September 1, 2019.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter E. Effect of Dissolution of Marriage on Certain Transfers in Trust › Section 112.102. Revocation of Certain Nontestamentary Transfers; Treatment of Former Spouse or Former Spouse's Relative as Beneficiary Under Certain Policies or Plans

Sec. 112.102.  REVOCATION OF CERTAIN NONTESTAMENTARY TRANSFERS; TREATMENT OF FORMER SPOUSE OR FORMER SPOUSE'S RELATIVE AS BENEFICIARY UNDER CERTAIN POLICIES OR PLANS.  (a)  The dissolution of the marriage revokes a provision in a trust instrument that was executed by a divorced individual as settlor before the divorced individual's marriage was dissolved and that:
(1)  is a revocable disposition or appointment of property made to the divorced individual's former spouse or any relative of the former spouse who is not a relative of the divorced individual;
(2)  revocably confers a general or special power of appointment on the divorced individual's former spouse or any relative of the former spouse who is not a relative of the divorced individual; or
(3)  revocably nominates the divorced individual's former spouse or any relative of the former spouse who is not a relative of the divorced individual to serve:
(A)  as a personal representative, trustee, conservator, agent, or guardian; or
(B)  in another fiduciary or representative capacity.
(b)  Subsection (a) does not apply if one of the following provides otherwise:
(1)  a court order;
(2)  the express terms of a trust instrument executed by the divorced individual before the individual's marriage was dissolved; or
(3)  an express provision of a contract relating to the division of the marital estate entered into between the divorced individual and the individual's former spouse before, during, or after the marriage.
(c)  Sections 9.301 and 9.302, Family Code, govern the designation of a former spouse as a beneficiary of certain life insurance policies or as a beneficiary under certain retirement benefit plans or other financial plans.
Added by Acts 2019, 86th Leg., R.S., Ch. 1112 (H.B. 2245), Sec. 5, eff. September 1, 2019.
2023 Texas Statutes › Property Code › Title 9 - Trusts › Subtitle B - Texas Trust Code: Creation, Operation, and Termination of Trusts › Chapter 112 - Creation, Validity, Modification, and Termination of Trusts › Subchapter E. Effect of Dissolution of Marriage on Certain Transfers in Trust › Section 112.103. Effect of Revocation

Sec. 112.103.  EFFECT OF REVOCATION.  (a)  An interest granted in a provision of a trust instrument that is revoked under Section 112.102(a)(1) or (2) passes as if the former spouse of the divorced individual who executed the trust instrument and each relative of the former spouse who is not a relative of the divorced individual disclaimed the interest granted in the provision.
(b)  An interest granted in a provision of a trust instrument that is revoked under Section 112.102(a)(3) passes as if the former spouse and each relative of the former spouse who is not a relative of the divorced individual died immediately before the dissolution of the marriage.
Added by Acts 2019, 86th Leg., R.S., Ch. 1112 (H.B. 2245), Sec. 5, eff. September 1, 2019.