Tex. Prop. Code Section 113.029
Discretionary Powers; Tax Savings


(a)

Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of terms such as “absolute,” “sole,” or “uncontrolled,” the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.

(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.

(c)

A power the exercise of which is limited or prohibited by Subsection (b) may be exercised by a majority of the remaining trustees whose exercise of the power is not limited or prohibited by Subsection (b). If the power of all trustees is limited or prohibited by Subsection (b), the court may appoint a special fiduciary with authority to exercise the power.

(d)

Subsection (b) does not apply to:

(1)

a power held by the settlor’s spouse who is the trustee of a trust for which a marital deduction, as defined by Section 2056(b)(5) or 2523(e), Internal Revenue Code of 1986, was previously allowed;

(2)

any trust during any period that the trust may be revoked or amended by its settlor; or

(3)

a trust if contributions to the trust qualify for the annual exclusion under Section 2503(c), Internal Revenue Code of 1986.

(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.
Added by Acts 2009, 81st Leg., R.S., Ch. 672 (H.B. 2368), Sec. 3, eff. September 1, 2009.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 699 (H.B. 2913), Sec. 4, eff. September 1, 2013.

Source: Section 113.029 — Discretionary Powers; Tax Savings, https://statutes.­capitol.­texas.­gov/Docs/PR/htm/PR.­113.­htm#113.­029 (accessed Mar. 23, 2024).

113.001
Limitation of Powers
113.002
General Powers
113.003
Options
113.004
Additions to Trust Assets
113.005
Acquisition of Undivided Interests
113.006
General Authority to Manage and Invest Trust Property
113.007
Temporary Deposits of Funds
113.008
Business Entities
113.009
Real Property Management
113.010
Sale of Property
113.011
Leases
113.012
Minerals
113.013
Insurance
113.014
Payment of Taxes
113.015
Authority to Borrow
113.016
Management of Securities
113.017
Corporate Stock or Other Securities Held in Name of Nominee
113.018
Employment and Appointment of Agents
113.019
Claims
113.020
Burdensome or Worthless Property
113.021
Distribution to Minor or Incapacitated Beneficiary
113.022
Power to Provide Residence and Pay Funeral Expenses
113.023
Ancillary Trustee
113.024
Implied Powers
113.025
Powers of Trustee Regarding Environmental Laws
113.026
Authority to Designate New Charitable Beneficiary
113.027
Distributions Generally
113.028
Certain Claims and Causes of Action Prohibited
113.029
Discretionary Powers
113.030
Relocation of Administration of Charitable Trust
113.031
Digital Assets
113.051
General Duty
113.052
Loan of Trust Funds to Trustee
113.053
Purchase or Sale of Trust Property by Trustee
113.054
Sales from One Trust to Another
113.055
Purchase of Trustee’s Securities
113.056
Authorization to Make Certain Investments
113.057
Deposits by Corporate Trustee with Itself
113.058
Bond
113.081
Resignation of Trustee
113.082
Removal of Trustee
113.083
Appointment of Successor Trustee
113.084
Powers of Successor Trustee
113.085
Exercise of Powers by Multiple Trustees
113.151
Demand for Accounting
113.152
Contents of Accounting
113.171
Common Trust Funds
113.172
Affiliated Institutions
113.0211
Adjustment of Charitable Trust

Accessed:
Mar. 23, 2024

§ 113.029’s source at texas​.gov