trust accounts settle after 45 days of beneficiary silence

The text as introduced · 885 words

By: Leach
H.B. No. 5069

A BILL TO BE ENTITLED

AN ACT

relating to trustee settlement of accounts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subtitle B, Chapter 114, Property Code, is

amended by adding Section 114.009 to read as follows:

Section 114.009. TRUSTEE SETTLEMENT OF ACCOUNTS

(A) A trustee may obtain a settlement of its accounts in

accordance with subsection (B) when any of the following occur:

(1) A trust terminates pursuant to the terms of the trust.

(2) A trust terminates early pursuant to § 112.054.

(3) A trustee resigns or is removed.

(4) A trustee seeks discharge of an interim accounting

period when the trust is continuing.

(B) (1) A trustee who elects to proceed under this section

shall provide all of the following to the qualified beneficiaries

of the trust and the successor trustee, if applicable, within a

reasonable time after termination of the trust pursuant to its

terms, the resignation or removal of the trustee, or the end of the

period for which the trustee is seeking discharge:

a. A statement showing the fair market value of the new

assets to be distributed from a terminating trust or to a successor

trustee.

b. A trust accounting for the prior two years showing all

receipts and disbursements and inventory value of the net assets.

c. An estimate for any items reasonably anticipated to be

received or disbursed.

d. The amount of any fees, including trustee fees, remaining

to be paid.

e. Notice that the trust is terminating, or that the trustee

has resigned or been removed, the time period for which the trustee

seeks discharge of its accounts, and a statement providing that

claims against a trustee shall be barred if no objections are

received within the time period described in subsection (C).

f. The name and mailing address of the trustee.

g. The name and telephone number of a person who may be

contacted for additional information.

(2) The trustee may also provide the statement and notice

described in this subsection to any other person who the trustee

reasonably believes may have an interest in the trust.

(C) (1) If, after receiving the notice and trust information

described in subsection (B), a qualified beneficiary or any other

party that received the notice and trust information objects to a

disclosed act or omission, the qualified beneficiary shall provide

written notice of the objection to the trustee not later than 45

days after the notice was sent by the trustee. If no written

objection is provided in the 45-day time period, the information

provided under subsection (B) shall be considered approved by the

recipient. The trustee, in the case of a trust terminating pursuant

to the terms of the trust or the trustee's resignation or removal,

within a reasonable period of time following the expiration of the

45-day time period, shall distribute the assets as provided in the

trust or to the successor trustee. If a qualified beneficiary gives

the trustee a written objection within the applicable 45-day time

period, the trustee or the qualified beneficiary may do either of

the following:

a. Submit the written objection to the court for resolution

and charge the expense of commencing a proceeding to the trust.

b. Resolve the objection by written agreement.

(2) Any agreement entered into pursuant to paragraph (1)b

may include a release, an indemnity clause, or both, on the part of

the beneficiary against the trustee relating to the trust. If the

parties agree to a nonjudicial settlement agreement or other

written agreement, any related expenses shall be charged to the

trust. Upon a resolution of an objection under this subsection,

within a reasonable period of time, the trustee shall distribute

the remaining trust assets as provided in the trust or to the

successor trustee.

(D) The trustee may rely upon the written statement of a

person receiving notice that the person does not object.

(E) When a trustee distributes assets of a terminating trust

or to the successor trustee after complying with this article and

having received no objections, each person who received notice and

either consented or failed to object pursuant to this section is

barred from doing either of the following:

(1) Bringing a claim against the trustee or challenging the

validity of the trust to the same extent and with the same

preclusive effect as if the court had entered a final order

approving the trustee's final account.

(2) Bringing a claim against the trustee for the period of

such interim accounts to the same extent and with the same

preclusive effect as if the court had entered a final order

approving the trustee's interim accounts.

(F) The court, as defined under § 111.004, shall have

exclusive jurisdiction over matters under this section.

(G) In the event the trustee is not released and his actions

ratified pursuant to the process provided by subsection (b), the

trustee shall not be precluded from obtaining a release of

liability by another permitted method.

SECTION 2. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect on September 1, 2025.