84R27608 AJA-F
	By: Rodríguez	S.B. No. 387
	(Wray)
	Substitute the following for S.B. No. 387:  No.

	A BILL TO BE ENTITLED
	AN ACT
	relating to trusts and certain other forms of asset protection.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 42.0021(a) and (b), Property Code, are
	amended to read as follows:
	(a)  In addition to the exemption prescribed by Section
	42.001, a person's right to the assets held in or to receive
	payments, whether vested or not, under any stock bonus, pension,
	annuity, deferred compensation, profit-sharing, or similar plan,
	including a retirement plan for self-employed individuals, or a
	simplified employee pension plan, an individual retirement account
	or individual retirement annuity, including an inherited
	individual retirement account or[,] individual retirement annuity,
	Roth IRA, or inherited Roth IRA, or a health savings account, and
	under any annuity or similar contract purchased with assets
	distributed from that type of plan or account, is exempt from
	attachment, execution, and seizure for the satisfaction of debts to
	the extent the plan, contract, annuity, or account is exempt from
	federal income tax, or to the extent federal income tax on the
	person's interest is deferred until actual payment of benefits to
	the person under Section 223, 401(a), 403(a), 403(b), 408(a), 408A,
	457(b), or 501(a), Internal Revenue Code of 1986, including a
	government plan or church plan described by Section 414(d) or (e),
	Internal Revenue Code of 1986.  For purposes of this subsection, the
	interest of a person in a plan, annuity, account, or contract
	acquired by reason of the death of another person, whether as an
	owner, participant, beneficiary, survivor, coannuitant, heir, or
	legatee, is exempt to the same extent that the interest of the
	person from whom the plan, annuity, account, or contract was
	acquired was exempt on the date of the person's death.  If this
	subsection is held invalid or preempted by federal law in whole or
	in part or in certain circumstances, the subsection remains in
	effect in all other respects to the maximum extent permitted by law.
	(b)  Contributions to an individual retirement account,
	individual retirement annuity, or Roth IRA that are "excess
	contributions" within the meaning of Section 4973 [exceed the
	amounts permitted under the applicable provisions] of the Internal
	Revenue Code of 1986, and any accrued earnings on such excess
	contributions, are not exempt under this section unless otherwise
	exempt by law.  Amounts qualifying as nontaxable transfers or
	rollover contributions under Section 402(a)(5), 403(a)(4),
	403(b)(8), or 408(d)(3) of the Internal Revenue Code of 1986 before
	January 1, 1993, are treated as exempt amounts under Subsection
	(a).  Amounts treated as [qualified] rollover contributions under
	Section 402A(c)(3), 402A(c)(4), or 408A, Internal Revenue Code of
	1986, are treated as exempt amounts under Subsection (a).  In
	addition, amounts qualifying as nontaxable rollover contributions
	under Section 402(c), 402(e)(6), 402(f), 403(a)(4), 403(a)(5),
	403(b)(8), 403(b)(10), 408(d)(3), 408(d)(6), 408(d)(9), or 408A of
	the Internal Revenue Code of 1986 on or after January 1, 1993, are
	treated as exempt amounts under Subsection (a).  Amounts qualifying
	as nontaxable rollover contributions under Section 223(f)(5) of the
	Internal Revenue Code of 1986 on or after January 1, 2004, are
	treated as exempt amounts under Subsection (a).
	SECTION 2.  Section 111.0035(b), Property Code, is amended
	to read as follows:
	(b)  The terms of a trust prevail over any provision of this
	subtitle, except that the terms of a trust may not limit:
	(1)  the requirements imposed under Section 112.031;
	(2)  the applicability of Section 114.007 to an
	exculpation term of a trust;
	(3)  the periods of limitation for commencing a
	judicial proceeding regarding a trust;
	(4)  a trustee's duty:
	(A)  with regard to an irrevocable trust, to
	respond to a demand for accounting made under Section 113.151 if the
	demand is from a beneficiary who, at the time of the demand:
	(i)  is entitled or permitted to receive
	distributions from the trust; or
	(ii)  would receive a distribution from the
	trust if the trust terminated at the time of the demand; and
	(B)  to act in good faith and in accordance with
	the purposes of the trust, except as otherwise provided by
	Subchapter E, Chapter 114, with regard to a directing party and an
	excluded fiduciary;
	(5)  a directing party's duty to act in good faith and
	in accordance with the purposes of the trust;
	(6)  the power of a court, in the interest of justice,
	to take action or exercise jurisdiction, including the power to:
	(A)  modify or terminate a trust or take other
	action under Section 112.054;
	(B)  remove a trustee under Section 113.082;
	(C)  exercise jurisdiction under Section 115.001;
	(D)  require, dispense with, modify, or terminate
	a trustee's bond; or
	(E)  adjust or deny a trustee's compensation if
	the trustee commits a breach of trust; or
	(7) [(6)]  the applicability of Section 112.038.
	SECTION 3.  Section 111.004(7), Property Code, is amended to
	read as follows:
	(7)  "Interested person" means a trustee, beneficiary,
	or directing party or any other person having an interest in or a
	claim against the trust or any person who is affected by the
	administration of the trust. Whether a person, excluding a
	trustee, directing party, or named beneficiary, is an interested
	person may vary from time to time and must be determined according
	to the particular purposes of and matter involved in any
	proceeding.
	SECTION 4.  Section 112.035(e), Property Code, is amended to
	read as follows:
	(e)  A beneficiary of the trust may not be considered a
	settlor merely because of a lapse, waiver, or release of:
	(1)  a power described by Subsection (f); or
	(2)  the beneficiary's right to withdraw a part of the
	trust property to the extent that the value of the property affected
	by the lapse, waiver, or release in any calendar year does not
	exceed the greater of [the amount specified in]:
	(A)  the amount specified in Section 2041(b)(2) or
	2514(e), Internal Revenue Code of 1986; or
	(B)  the amount specified in Section 2503(b),
	Internal Revenue Code of 1986, with respect to the contributions by
	each donor.
	SECTION 5.  Section 112.038, Property Code, is amended to
	read as follows:
	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.
	SECTION 6.  Sections 112.054(a) and (c), Property Code, are
	amended to read as follows:
	(a)  On the petition of a trustee or a beneficiary, a court
	may order that the trustee be changed, that the terms of the trust
	be modified, that the trustee be directed or permitted to do acts
	that are not authorized or that are forbidden by the terms of the
	trust, that the trustee be prohibited from performing acts required
	by the terms of the trust, or that the trust be terminated in whole
	or in part, if:
	(1)  the purposes of the trust have been fulfilled or
	have become illegal or impossible to fulfill;
	(2)  because of circumstances not known to or
	anticipated by the settlor, the order will further the purposes of
	the trust;
	(3)  modification of administrative, nondispositive
	terms of the trust is necessary or appropriate to prevent waste or
	avoid impairment of the trust's administration;
	(4)  the order is necessary or appropriate to achieve
	the settlor's tax objectives and is not contrary to the settlor's
	intentions; [or]
	(5)  subject to Subsection (d):
	(A)  continuance of the trust is not necessary to
	achieve any material purpose of the trust; or
	(B)  the order is not inconsistent with a material
	purpose of the trust; or
	(6)  the order is necessary to correct a scrivener's
	error in the governing document, even if unambiguous, to conform
	the terms to the settlor's intention if the settlor's intent with
	respect to the error being corrected is proved by clear and
	convincing evidence.
	(c)  The court may direct that an order described by
	Subsection (a)(4) or (6) has retroactive effect.
	SECTION 7.  Sections 112.071(5), (6), and (7), Property
	Code, are amended to read as follows:
	(5)  "Full discretion" means a [the] 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
	[limited or modified by the terms of the trust in any way, including
	by restrictions that limit distributions to purposes such as the
	best interests, welfare, or happiness of the beneficiaries].
	(6)  "Limited discretion" means a [limited or modified]
	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
	[currently eligible to receive income or principal from the trust]
	ended on that date without causing the trust to terminate.
	SECTION 8.  Section 112.072(a), Property Code, is amended to
	read as follows:
	(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, [or] more than one, or all of the current
	beneficiaries of the first trust [who are eligible to receive
	income or principal from the trust] and for the benefit of one, [or]
	more than one, or all of the successor or presumptive remainder
	beneficiaries of the first trust [who are eligible to receive
	income or principal from the trust].
	SECTION 9.  Section 112.078, Property Code, is amended by
	adding Subsection (f) to read as follows:
	(f)  This section does not limit a beneficiary's right to
	bring an action against a trustee for a breach of trust.
	SECTION 10.  Section 112.085, Property Code, is amended to
	read as follows:
	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 impair the rights of any beneficiary
	of the trust;
	[(3)]  materially limit a trustee's fiduciary duty:
	(A)  under the terms of the trust; or
	(B)  in a manner that would be prohibited [as
	described] by Section 111.0035, except as provided by Subchapter E,
	Chapter 114;
	(3) [(4)]  decrease or indemnify against a trustee's
	liability, except as provided by Subchapter E, Chapter 114;
	(4)  add a provision exonerating [or exonerate] 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; or
	(7)  distribute principal from a trust that is held
	solely for charitable purposes and has as beneficiaries only
	charitable entities.
	SECTION 11.  Section 113.018, Property Code, is amended to
	read as follows:
	Sec. 113.018.  EMPLOYMENT AND APPOINTMENT OF AGENTS. (a)  A
	trustee may employ attorneys, accountants, agents, including
	investment agents, and brokers reasonably necessary in the
	administration of the trust estate.
	(b)  Without limiting the trustee's discretion under
	Subsection (a), a trustee may grant an agent powers with respect to
	property of the trust to act for the trustee in any lawful manner
	for purposes of real property transactions.
	(c)  A trustee acting under Subsection (b) may delegate any
	or all of the duties and powers to:
	(1)  execute and deliver any legal instruments relating
	to the sale and conveyance of the property, including affidavits,
	notices, disclosures, waivers, or designations or general or
	special warranty deeds binding the trustee with vendor's liens
	retained or disclaimed, as applicable, or transferred to a
	third-party lender;
	(2)  accept notes, deeds of trust, or other legal
	instruments;
	(3)  approve closing statements authorizing deductions
	from the sale price;
	(4)  receive trustee's net sales proceeds by check
	payable to the trustee;
	(5)  indemnify and hold harmless any third party who
	accepts and acts under a power of attorney with respect to the sale;
	(6)  take any action, including signing any document,
	necessary or appropriate to sell the property and accomplish the
	delegated powers;
	(7)  contract to purchase the property for any price on
	any terms;
	(8)  execute, deliver, or accept any legal instruments
	relating to the purchase of the property or to any financing of the
	purchase, including deeds, notes, deeds of trust, guaranties, or
	closing statements;
	(9)  approve closing statements authorizing payment of
	prorations and expenses;
	(10)  pay the trustee's net purchase price from funds
	provided by the trustee;
	(11)  indemnify and hold harmless any third party who
	accepts and acts under a power of attorney with respect to the
	purchase; or
	(12)  take any action, including signing any document,
	necessary or appropriate to purchase the property and accomplish
	the delegated powers.
	(d)  A trustee who delegates a power under Subsection (b) is
	liable to the beneficiaries or to the trust for an action of the
	agent to whom the power was delegated.
	(e)  A delegation by the trustee under Subsection (b) must be
	documented in a written instrument acknowledged by the trustee
	before an officer authorized under the law of this state or another
	state to take acknowledgments to deeds of conveyance and administer
	oaths.  A signature on a delegation by a trustee for purposes of
	this subsection is presumed to be genuine if the trustee
	acknowledges the signature in accordance with Chapter 121, Civil
	Practice and Remedies Code.
	(f)  A delegation to an agent under Subsection (b) terminates
	six months from the date of the acknowledgment of the written
	delegation unless terminated earlier by:
	(1)  the death or incapacity of the trustee;
	(2)  the resignation or removal of the trustee; or
	(3)  a date specified in the written delegation.
	(g)  A person that in good faith accepts a delegation under
	Subsection (b) without actual knowledge that the delegation is
	void, invalid, or terminated, that the purported agent's authority
	is void, invalid, or terminated, or that the agent is exceeding or
	improperly exercising the agent's authority may rely on the
	delegation as if:
	(1)  the delegation were genuine, valid, and still in
	effect;
	(2)  the agent's authority were genuine, valid, and
	still in effect; and
	(3)  the agent had not exceeded and had properly
	exercised the authority.
	(h)  A trustee may delegate powers under Subsection (b) if
	the governing instrument does not affirmatively permit the trustee
	to hire agents or expressly prohibit the trustee from hiring
	agents.
	SECTION 12.  Chapter 114, Property Code, is amended by
	adding Subchapter E to read as follows:
	SUBCHAPTER E.  DIRECTED TRUSTS
	Sec. 114.101.  DEFINITIONS. In this subchapter:
	(1)  "Directing party" means any investment trust
	advisor, distribution trust advisor, or trust protector as provided
	by this subchapter. The term does not include:
	(A)  any person who merely holds:
	(i)  a general or limited power of
	appointment over the trust assets; or
	(ii)  if the person is a grantor or
	beneficiary of the trust, a power to:
	(a)  prohibit the trustee from taking
	any action with respect to the trust; or
	(b)  remove, appoint, or remove and
	appoint a trustee, investment trust advisor, distribution trust
	advisor, or trust protector or another directing party, including a
	power to designate a plan of succession for future holders of one of
	those positions;
	(B)  a trustee or cotrustee even if the trustee or
	cotrustee has the exclusive authority over decisions similar to an
	investment trust advisor, distribution trust advisor, or trust
	protector in comparison to another trustee or cotrustee who is
	relieved of that authority; or
	(C)  any person who merely holds a power over the
	trust assets exercisable in a nonfiduciary capacity without the
	approval or consent of any person in a fiduciary capacity, such as a
	power to control the beneficial enjoyment of the trust assets in
	accordance with Section 674 of the Internal Revenue Code of 1986 or
	administrative powers in accordance with Section 675 of the
	Internal Revenue Code of 1986.
	(2)  "Distribution trust advisor" means any one or more
	persons given authority by the governing instrument to direct,
	consent to, veto, or otherwise exercise all or any portion of the
	distribution powers and discretions of the trust, including the
	authority to make a discretionary distribution of income or
	principal.
	(3)  "Excluded fiduciary" means any fiduciary directed
	by the governing instrument to act in accordance with the exercise
	of specified powers by a directing party, to the extent provided by
	Section 114.106.
	(4)  "Fiduciary" means any person expressly given one
	or more fiduciary duties by the governing instrument, including a
	trustee.
	(5)  "Governing instrument" refers to the instrument
	stating the terms of a trust, including any court order
	establishing, construing, or modifying the terms of the trust in
	accordance with applicable law.
	(6)  "Independent fiduciary" means any fiduciary who is
	not a grantor of a trust, a beneficiary of a trust, a spouse of a
	grantor or a beneficiary of a trust, or a person related or
	subordinate to any of those persons within the meaning of Section
	672(c) of the Internal Revenue Code of 1986.
	(7)  "Investment trust advisor" means any one or more
	persons given authority by the governing instrument to direct,
	consent to, veto, or otherwise exercise all or any portion of the
	investment powers of the trust.
	(8)  "Power" means:
	(A)  the authority to take or withhold an action
	or decision, including an expressly specified power;
	(B)  the implied power necessary to exercise a
	specified power; or
	(C)  the authority inherent in a general grant of
	discretion.
	(9)  "Trust protector" means any one or more persons
	given any one or more powers in accordance with Section 114.105,
	whether or not designated with the title of trust protector by the
	governing instrument.
	Sec. 114.102.  APPLICABILITY OF SUBCHAPTER. (a)  This
	subchapter applies to all trusts created on or after September 1,
	2015, except to the extent the governing instrument expressly
	prohibits the application of this subchapter by specific reference
	to this subchapter.
	(b)  Except as provided by Subsection (a), on and after
	September 1, 2015, this subchapter applies to a trust existing on or
	created on or after that date that:
	(1)  appoints or provides for a directing party,
	including a party granted power or authority effectively comparable
	in substance to that of a directing party as provided by this
	subchapter;
	(2)  is modified in accordance with applicable law or
	the terms of the governing instrument to appoint or provide for a
	directing party; or
	(3)  is modified in accordance with a court order to
	appoint or provide for a directing party, including a party granted
	power or authority effectively comparable in substance to that of a
	directing party as provided by this subchapter, whether or not the
	court order specifies that this subchapter governs the
	responsibilities, actions, and liabilities of persons designated
	as a directing party or excluded fiduciary.
	Sec. 114.103.  INVESTMENT TRUST ADVISOR. (a)  An investment
	trust advisor may be designated in the governing instrument of a
	trust.  The governing instrument may use the title "investment
	trust advisor" or any similar name or description demonstrating the
	intent to provide for the position and function of an investment
	trust advisor as defined by Section 114.101.
	(b)  The powers of an investment trust advisor:
	(1)  may be exercised or not exercised in the
	discretion of the investment trust advisor; and
	(2)  except as provided by this subchapter, are binding
	on all other persons, including each beneficiary, fiduciary, and
	excluded fiduciary and any other party having an interest in the
	trust.
	(c)  Unless otherwise provided by the governing instrument,
	an investment trust advisor's powers include the authority to:
	(1)  direct the trustee with respect to:
	(A)  the retention, purchase, transfer,
	assignment, sale, or encumbrance of trust property; and
	(B)  the investment and reinvestment of principal
	and income of the trust;
	(2)  direct the trustee with respect to all management,
	control, and voting powers related directly or indirectly to trust
	assets, including voting proxies for securities held in trust;
	(3)  select and employ one or more advisors, managers,
	consultants, counselors, or other agents in accordance with Section
	113.018; and
	(4)  determine the frequency and methodology for
	valuing any asset for which there is no readily available market
	value.
	Sec. 114.104.  DISTRIBUTION TRUST ADVISOR. (a)  A
	distribution trust advisor may be designated in the governing
	instrument of a trust.  The governing instrument may use the title
	"distribution trust advisor" or any similar name or description
	demonstrating the intent to provide for the position and function
	of a distribution trust advisor as defined by Section 114.101.
	(b)  The powers of a distribution trust advisor:
	(1)  may be exercised or not exercised in the
	discretion of the distribution trust advisor; and
	(2)  except as otherwise provided by this subchapter,
	are binding on all other persons, including each beneficiary,
	fiduciary, and excluded fiduciary and any other party having an
	interest in the trust.
	(c)  Unless otherwise provided in the governing instrument,
	a distribution trust advisor's powers include the authority to
	direct the trustee with regard to all decisions relating directly
	or indirectly to discretionary distributions to or for one or more
	beneficiaries.
	Sec. 114.105.  TRUST PROTECTOR. (a)  A trust protector may
	be designated in the governing instrument of a trust.  The governing
	instrument may use the title "trust protector" or any similar name
	or description demonstrating the intent to provide for the position
	and function of a trust protector as defined by Section 114.101.
	(b)  The powers of a trust protector:
	(1)  may be exercised or not exercised in the
	discretion of the trust protector; and
	(2)  except as otherwise provided by this subchapter,
	are binding on all other persons, including each beneficiary,
	investment trust advisor, distribution trust advisor, fiduciary,
	and excluded fiduciary and any other party having an interest in the
	trust.
	(c)  The terms of the governing instrument shall determine
	the powers of the trust protector, and there are no default powers.
	The powers granted to a trust protector by the governing instrument
	may include the authority to:
	(1)  modify or amend the governing instrument to
	achieve favorable tax status or respond to changes in the Internal
	Revenue Code of 1986 or other federal law, state law, or rulings or
	regulations under federal or state law;
	(2)  increase, decrease, or modify the interests of any
	beneficiary or beneficiaries of the trust;
	(3)  modify or amend the terms of any power of
	appointment granted by the trust, so long as the modification or
	amendment does not grant a beneficial interest to any individual,
	class of individuals, or other party not specifically provided for
	under the governing instrument;
	(4)  remove, appoint, or remove and appoint a trustee,
	investment trust advisor, or distribution trust advisor or another
	directing party, including the authority to designate a plan of
	succession for future holders of one of those positions;
	(5)  terminate the trust, including the authority to
	determine how the trustee shall distribute the trust property to be
	consistent with the purposes of the trust;
	(6)  change the situs of the trust, the governing law of
	the trust, or both;
	(7)  appoint one or more successor trust protectors,
	including the authority to designate a plan of succession for
	future trust protectors;
	(8)  interpret terms of the governing instrument at the
	request of the trustee;
	(9)  advise the trustee on matters concerning a
	beneficiary; or
	(10)  amend or modify the governing instrument to:
	(A)  take advantage of laws governing restraints
	on alienation or distribution of trust property; or
	(B)  improve the administration of the trust.
	(d)  Except as otherwise provided by the governing
	instrument, a trust protector has no duty to monitor any
	fiduciary's conduct.
	(e)  If a charity is a beneficiary of the trust, a trust
	protector must give notice to the attorney general not later than
	the 60th day before the date the trust protector takes an action
	authorized by Subsection (c)(2), (3), (4), (5), or (6).
	Sec. 114.106.  EXCLUDED FIDUCIARY. (a)  If a fiduciary is
	directed by the governing instrument to act in accordance with the
	exercise of specified powers by a directing party, those specified
	powers are considered granted not to the fiduciary but to the
	directing party, and the fiduciary is considered excluded from
	exercising those specified powers.
	(b)  If a governing instrument provides that a fiduciary, as
	to one or more specified matters, is to act, omit action, or make
	decisions only with the consent of a directing party, then the
	fiduciary is considered an excluded fiduciary only with respect to
	those matters.
	Sec. 114.107.  DUTY AND LIABILITY OF DIRECTING PARTY.
	(a)  Within the limits of the directing party's authority, a
	directing party:
	(1)  is a fiduciary of the trust;
	(2)  except as provided by the governing instrument,
	has all the powers and protections granted to trustees under this
	subtitle; and
	(3)  is subject to the same fiduciary duties and
	standards applicable to a trustee of a trust, unless the governing
	instrument provides otherwise.
	(b)  The governing instrument may not limit the duties of the
	directing party or relieve a directing party of any duties or
	standards that could not be limited as to a trustee or of which a
	trustee could not be relieved, including the duties and standards
	set forth in Sections 111.0035 and 114.007.
	Sec. 114.108.  DUTY AND LIABILITY OF EXCLUDED FIDUCIARY.
	(a)  An excluded fiduciary shall act in accordance with the
	governing instrument and comply with the directing party's exercise
	of the powers granted to the directing party by the governing
	instrument.
	(b)  Notwithstanding Section 111.0035, if the terms of a
	trust provide that an excluded fiduciary is to follow the direction
	of a directing party or act only with a directing party's consent or
	direction:
	(1)  if the excluded fiduciary complies with the
	direction of a directing party, the excluded fiduciary is not
	liable for any loss resulting directly or indirectly from any act
	taken or not taken by the excluded fiduciary pursuant to the
	directing party's direction; or
	(2)  if the directing party fails to direct, consent,
	or act after having been requested to do so by the excluded
	fiduciary, the excluded fiduciary is not liable for any loss
	resulting directly or indirectly from any act taken or not taken by
	the excluded fiduciary as a result of the directing party's failure
	to direct, consent, or act.
	(c)  Subsection (b) does not apply if:
	(1)  the direction is contrary to an express
	prohibition or mandate in the governing instrument, which shall be
	evaluated exclusively on the terms of the governing instrument and
	without reference to any judicial or legal standard;
	(2)  the excluded fiduciary acts in a manner that
	constitutes wilful misconduct; or
	(3)  the excluded fiduciary has actual knowledge that
	the direction would constitute fraud as applied to the fiduciary
	duties of the directing party.
	(d)  Unless otherwise provided by the governing instrument,
	an excluded fiduciary does not have any duty to:
	(1)  monitor the directing party's conduct;
	(2)  provide the directing party with advice or consult
	with the directing party;
	(3)  inform or warn any directing party or any
	beneficiary or third party that the excluded fiduciary disagrees
	with any of the directing party's actions or directions;
	(4)  do anything to prevent the directing party from
	giving any direction or taking any action; or
	(5)  compel the directing party to redress the
	directing party's action or direction.
	(e)  Absent clear evidence to the contrary, the actions of an
	excluded fiduciary pertaining to matters within the limits of
	authority of the directing party, including confirming that the
	directing party's directions have been carried out and recording
	and reporting actions taken pursuant to the directing party's
	direction, shall be presumed to be administrative actions taken by
	the excluded fiduciary and may not be considered an undertaking by
	the excluded fiduciary to monitor the directing party's actions or
	participate in actions within the limits of the directing party's
	authority.
	(f)  An excluded fiduciary may, but is not required to,
	obtain and rely on an opinion of counsel on any matter relevant to
	this subchapter.
	Sec. 114.109.  JURISDICTION. By accepting an appointment to
	serve as a directing party of a trust that is subject to the laws of
	this state, the directing party submits to the jurisdiction of the
	courts of this state even if investment advisory agreements or
	other related agreements provide otherwise, and the directing party
	may be made a party to any action or proceeding in which issues
	relate to a decision or action of the directing party.
	Sec. 114.110.  TAX SAVINGS PROVISIONS. Notwithstanding the
	other provisions of this subchapter, and except as otherwise
	provided by the governing instrument, none of the default powers
	granted to a directing party authorize:
	(1)  a grantor of a trust to direct distributions;
	(2)  any directing party who is a beneficiary, or a
	directing party who is not an independent fiduciary and who was
	appointed by a beneficiary, to direct distributions other than in
	accordance with the limits of Section 113.029;
	(3)  any directing party to have any incidents of
	ownership over a life insurance policy insuring the life of the
	directing party or the directing party's spouse; or
	(4)  any directing party to hold any power that would
	cause the inclusion of assets of the trust in the directing party's
	estate that would not otherwise be included.
	SECTION 13.  Sections 115.002(b-1) and (b-2), Property Code,
	are amended to read as follows:
	(b-1)  If there are multiple [noncorporate] trustees none of
	whom is a corporate trustee and the trustees maintain a principal
	office in this state, an action shall be brought in the county in
	which:
	(1)  the situs of administration of the trust is
	maintained or has been maintained at any time during the four-year
	period preceding the date the action is filed; or
	(2)  the trustees maintain the principal office.
	(b-2)  If there are multiple [noncorporate] trustees none of
	whom is a corporate trustee and the trustees do not maintain a
	principal office in this state, an action shall be brought in the
	county in which:
	(1)  the situs of administration of the trust is
	maintained or has been maintained at any time during the four-year
	period preceding the date the action is filed; or
	(2)  any trustee resides or has resided at any time
	during the four-year period preceding the date the action is filed.
	SECTION 14.  Section 181.083, Property Code, is amended by
	adding Subsections (c) and (d) to read as follows:
	(c)  To the extent specified in an instrument in which a
	donee exercises a power, any estate or interest in real or personal
	property created through the exercise of the power by the donee is
	considered to have been created at the time of the exercise of the
	donee's power and not at the time of the creation of the donee's
	power, provided that in the instrument the donee:
	(1)  specifically refers to Section 181.083(c),
	Property Code;
	(2)  specifically asserts an intention to exercise a
	power of appointment by creating another power of appointment
	described in Section 2041(a)(3) or Section 2514(d), Internal
	Revenue Code of 1986; or
	(3)  specifically asserts an intention to postpone the
	vesting of any estate or interest in the property that is subject to
	the power, or suspend the absolute ownership or power of alienation
	of that property, for a period ascertainable without regard to the
	date of the creation of the donee's power.
	(d)  Subsection (c) applies regardless of whether the
	donee's power may be exercised in favor of the donee, the donee's
	creditors, the donee's estate, or the creditors of the donee's
	estate.
	SECTION 15.  (a)  Except as otherwise expressly provided by
	a trust, a will creating a trust, or this section, the changes in
	law made by this Act apply to a trust existing or created on or after
	September 1, 2015.
	(b)  For a trust existing on September 1, 2015, that was
	created before that date, the changes in law made by this Act apply
	only to an act or omission relating to the trust that occurs on or
	after September 1, 2015.
	SECTION 16.  Sections 114.003(b) and (c), Property Code, are
	repealed.
	SECTION 17.  This Act takes effect September 1, 2015.