Bill Text: TX HB2246 | 2019-2020 | 86th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the fiduciary status of a directed trust advisor.

Spectrum: Bipartisan Bill

Status: (Passed) 2019-05-31 - Effective on 9/1/19 [HB2246 Detail]

Download: Texas-2019-HB2246-Introduced.html

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86R2877 BEE-F
By: Wray H.B. No. 2246

A BILL TO BE ENTITLED
AN ACT
relating to the fiduciary status of a directed trust advisor.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 114.0031, Property Code, is amended by
amending Subsection (e) and adding Subsection (e-1) to read as
follows:
(e) If the terms of a trust give a person the authority to
direct, consent to, or disapprove a trustee's actual or proposed
investment decisions, distribution decisions, or other decisions,
the person is [considered to be] an advisor. An advisor is [and] a
fiduciary regardless of trust terms to the contrary [when
exercising that authority] except that the trust terms may provide
that an advisor acts in a nonfiduciary capacity if:
(1) the advisor's only power is to remove and appoint
trustees, advisors, trust committee members, or other protectors;
and
(2) the advisor does not exercise that power to
appoint the advisor's self to a position described by Subdivision
(1).
(e-1) Subsection (e) does not prohibit the exercise of a
power in a nonfiduciary capacity as required by the Internal
Revenue Code for a grantor or other person to be treated as the
owner of any portion of the trust for federal income tax purposes.
SECTION 2. (a) Except as specifically provided by a trust
term in effect before September 1, 2019, the changes in law made by
this Act apply to a trust created before, on, or after September 1,
2019, with respect to an action taken or not taken on or after
September 1, 2019, by a trustee, custodian, or other person with
respect to the trust.
(b) An action taken or not taken with respect to a trust
before September 1, 2019, is governed by the law that applied to the
action taken or not taken immediately before September 1, 2019, and
that law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2019.