Tex.
Prop. Code Section 142.005
Trust for Property
(a)
Any court of record with jurisdiction to hear a suit involving a beneficiary may, on application and on a finding that the creation of a trust would be in the best interests of the beneficiary, enter a decree in the record directing the clerk to deliver any funds accruing to the beneficiary under the judgment to a financial institution, except as provided by Subsections (m) and (n).(b)
The decree shall provide for the creation of a trust for the management of the funds for the benefit of the beneficiary and for terms, conditions, and limitations of the trust, as determined by the court, that are not in conflict with the following mandatory provisions:(1)
The beneficiary shall be the sole beneficiary of the trust.(2)
The trustee may disburse amounts of the trust’s principal, income, or both as the trustee in the trustee’s sole discretion determines to be reasonably necessary for the health, education, support, or maintenance of the beneficiary. The trustee may conclusively presume that medicine or treatments approved by a licensed physician are appropriate for the health of the beneficiary.(3)
The income of the trust not disbursed under Subdivision (2) shall be added to the principal of the trust.(4)
If the beneficiary is a minor who is not considered disabled for purposes of 42 U.S.C. Chapter 7, Subchapter XVI, the trust shall terminate on the death of the beneficiary, on the beneficiary’s attaining an age stated in the trust, or on the 25th birthday of the beneficiary, whichever occurs first.(4-a)
If the court finds that a minor beneficiary is considered disabled for purposes of 42 U.S.C. Chapter 7, Subchapter XVI, the trust shall terminate on the death of the beneficiary.(4-b)
If the beneficiary is an incapacitated person, the trust shall terminate on the death of the beneficiary or when the beneficiary regains capacity.(5)
A trustee that is a financial institution shall serve without bond.(6)
The trustee shall receive reasonable compensation paid from trust’s income, principal, or both on application to and approval of the court.(7)
The first page of the trust instrument shall contain the following notice:(c)
A trust established under this section may provide that:(1)
distributions of the trust principal before the termination of the trust may be made from time to time as the beneficiary attains designated ages and at designated percentages of the principal; and(2)
distributions, payments, uses, and applications of all trust funds may be made to the legal or natural guardian of the beneficiary or to the person having custody of the beneficiary or may be made directly to or expended for the benefit, support, or maintenance of the beneficiary without the intervention of any legal guardian or other legal representative of the beneficiary.(d)
A court that creates a trust under this section has continuing jurisdiction and supervisory power over the trust, including the power to construe, amend, revoke, modify, or terminate the trust. A trust created under this section is not subject to revocation by the beneficiary or a guardian of the beneficiary’s estate. If the trust is revoked by the court before the beneficiary is 18 years old, the court may provide for the management of the trust principal and any undistributed income as authorized by this chapter. If the trust is revoked by the court after the beneficiary is 18 years old, the trust principal and any undistributed income shall be delivered to the beneficiary after the payment of all proper and necessary expenses.(e)
On the termination of the trust under its terms or on the death of the beneficiary, the trust principal and any undistributed income shall be paid to the beneficiary or to the representative of the estate of the deceased beneficiary.(f)
A trust established under this section prevails over any other law concerning minors, incapacitated persons, or their property, and the trust continues in force and effect until terminated or revoked, notwithstanding the appointment of a guardian of the estate of the minor or incapacitated person, or the attainment of the age of majority by the minor.(g)
Notwithstanding any other provision of this chapter, if the court finds that it would be in the best interests of the beneficiary for whom a trust is established under this section, the court may omit or modify any terms required by Subsection (b) if the court determines that the omission or modification is necessary or appropriate to allow the beneficiary to be eligible to receive public benefits or assistance under a state or federal program. This section does not require a distribution from a trust if the distribution is discretionary under the terms of the trust.(h)
A trust created under this section is subject to Subtitle B, Title 9.(i)
Notwithstanding Subsection (h), this section prevails over a provision in Subtitle B, Title 9, that is in conflict or inconsistent with this section.(j)
A provision in a trust created under this section that relieves a trustee from a duty, responsibility, or liability imposed by this section or Subtitle B, Title 9, is enforceable only if:(1)
the provision is limited to specific facts and circumstances unique to the property of that trust and is not applicable generally to the trust; and(2)
the court creating or modifying the trust makes a specific finding that there is clear and convincing evidence that the inclusion of the provision is in the best interests of the beneficiary of the trust.(k)
In addition to ordering other appropriate remedies and grounds, the court may appoint a guardian ad litem to investigate and report to the court whether the trustee should be removed for failing or refusing to make distributions for the health, education, support, or maintenance of the beneficiary required under the terms of the trust if the court is petitioned by:(1)
a parent of the beneficiary;(2)
a next friend of the beneficiary;(3)
a guardian of the beneficiary;(4)
a conservator of the beneficiary;(5)
a guardian ad litem for the beneficiary; or(6)
an attorney ad litem for the beneficiary.(l)
A person listed in Subsection (k) shall be reimbursed from the trust for reasonable attorney’s fees, not to exceed $1,000, incurred in bringing the petition.(m)
If the value of the trust’s principal is $50,000 or less, the court may appoint a person other than a financial institution to serve as trustee of the trust only if the court finds the appointment is in the beneficiary’s best interests.(n)
If the value of the trust’s principal is more than $50,000, the court may appoint a person other than a financial institution to serve as trustee of the trust only if the court finds that:(1)
no financial institution is willing to serve as trustee; and(2)
the appointment is in the beneficiary’s best interests.(o)
In this section:(1)
“Beneficiary” means:(A)
a minor or incapacitated person who:(i)
has no legal guardian; and(ii)
is represented by a next friend or an appointed guardian ad litem; or(B)
a person with a physical disability.(2)
“Financial institution” means a financial institution, as defined by Section 201.101 (Definitions), Finance Code, that has trust powers, exists, and does business under the laws of this or another state or the United States.
Source:
Section 142.005 — Trust for Property, https://statutes.capitol.texas.gov/Docs/PR/htm/PR.142.htm#142.005 (accessed Jun. 5, 2024).
