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Relating to trusts.
No fiscal implication to the State is anticipated.
HB 2245 would prohibit the terms of a trust from limiting a court's power to order disgorgement (a remedy requiring a party who profits from an illegal or wrongful act to give up any profits made as a result of the illegal or wrongful act) of a trustee's compensation if the trustee commits a breach of trust, or to make an award of costs and attorney's fees.
This bill would also make certain provisions of the Estates Code governing wills applicable to certain trusts. For instance, a trust that is created and amenable or revocable by the settlor (the party that created the trust and transfers legal title in some asset to the trustee) and the settlor's spouse, unless the trust terms provide otherwise, Estates Code provisions governing the construction and interpretation of wills would apply 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. The Estates Code provisions relating to abatement of bequests (the process when there is not enough money in an estate to fulfill all debts and bequests) would apply to the abatement of at-death transfers.
Additionally, HB 2245 would set out provisions relating to the effect of the dissolution of a marriage on certain transfers in trust.
Texas Action is neutral on HB 2245 as it neither advances nor hinders any of our liberty principles.