trust accountings must sort principal from income

The text as introduced · 365 words

89R6822 RAL-F

By: Hughes
S.B. No. 1218

A BILL TO BE ENTITLED

AN ACT

relating to the contents of a trust accounting.

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

SECTION 1. Section 113.151, Property Code, is amended by

adding Subsection (c) to read as follows:

(c) Notwithstanding Section 113.152(b), on a showing of

good cause, the court may compel the trustee to include in a written

statement of account required by the court under Subsection (a) or

(b) an allocation of certain receipts and disbursements to

principal and income regardless of whether the distribution

standard and beneficiaries are the same for principal and income.

SECTION 2. Section 113.152, Property Code, is amended to

read as follows:

Sec. 113.152. CONTENTS OF ACCOUNTING. (a) A written

statement of accounts shall show:

(1) all trust property that has come to the trustee's

knowledge or into the trustee's possession and that has not been

previously listed or inventoried as property of the trust;

(2) a complete account of receipts, disbursements, and

other transactions regarding the trust property for the period

covered by the account, including their source and nature, with

each receipt and disbursement allocated to [ receipts of ] principal

or [ and ] income , subject to Subsection (b) [ shown separately ];

(3) a listing of all property being administered, with

an adequate description of each asset;

(4) the cash balance on hand and the name and location

of the depository where the balance is kept; and

(5) all known liabilities owed by the trust.

(b) A trustee is not required to allocate a receipt or

disbursement to principal or income under Subsection (a)(2) if the

distribution standard and beneficiaries are the same for both

principal and income.

SECTION 3. The changes in law made by this Act apply only to

a demand for accounting made on or after the effective date of this

Act. A demand for accounting made before the effective date of this

Act is governed by the law in effect immediately before the

effective date of this Act, and the former law is continued in

effect for that purpose.

SECTION 4. This Act takes effect September 1, 2025.