Texas Estates Code 1301.101 – Required Terms
(a) Except as provided by Subsection (c), a management trust created for a ward or incapacitated person must provide that:
(1) the ward or incapacitated person is the sole beneficiary of the trust;
(2) the trustee may disburse an amount of the trust’s principal or income as the trustee determines is necessary to spend for the health, education, maintenance, or support of the person for whom the trust is created;
(3) the trust income that the trustee does not disburse under Subdivision (2) must be added to the trust principal;
(4) a trustee that is a corporate fiduciary serves without giving a bond;
(5) subject to the court‘s approval and Subsection (b), a trustee is entitled to receive reasonable compensation for services the trustee provides to the person for whom the trust is created as the person’s trustee; and
(6) the trust terminates:
(A) except as provided by Paragraph (B), if the person for whom the trust is created is a minor:
(i) on the earlier of:
(a) the person’s death; or
(b) the person’s 18th birthday; or
(ii) on the date provided by court order, which may not be later than the person’s 25th birthday;
(B) if the person for whom the trust is created is a minor and is also incapacitated for a reason other than being a minor:
(i) on the person’s death; or
(ii) when the person regains capacity; or
(C) if the person for whom the trust is created is not a minor:
(i) according to the terms of the trust;
(ii) on the date the court determines that continuing the trust is no longer in the person’s best interests, subject to Section 1301.202(c); or
(iii) on the person’s death.
(a-1) A management trust created for a person who has only a physical disability must provide that the trustee of the trust:
(1) serves without giving a bond; and
(2) is entitled to receive, without the court’s approval, reasonable compensation for services the trustee provides to the person as the person’s trustee.
Terms Used In Texas Estates Code 1301.101
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Court: means and includes:
(1) a county court in the exercise of its probate jurisdiction;
(2) a court created by statute and authorized to exercise original probate jurisdiction; and
(3) a district court exercising original probate jurisdiction in a contested matter. See Texas Estates Code 22.007 - Fiduciary: A trustee, executor, or administrator.
- Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
- Minor: means a person younger than 18 years of age who:
(1) has never been married; and
(2) has not had the disabilities of minority removed for general purposes. See Texas Estates Code 22.022 - Person: includes a natural person and a corporation. See Texas Estates Code 22.027
- Trustee: A person or institution holding and administering property in trust.
- Ward: means a person for whom a guardian has been appointed. See Texas Estates Code 22.033
(b) A trustee’s compensation under Subsection (a)(5) must be:
(1) paid from the management trust’s income, principal, or both; and
(2) determined, paid, reduced, and eliminated in the same manner as compensation of a guardian under Subchapter A, Chapter 1155.
(c) The court creating or modifying a management trust may omit or modify otherwise applicable terms required by Subsection (a), (a-1), or (b) if the court is creating the trust for a person who has only a physical disability, or if the court determines that the omission or modification:
(1) is necessary and appropriate for the person for whom the trust is created to be eligible to receive public benefits or assistance under a state or federal program that is not otherwise available to the person; or
(2) is in the best interests of the person for whom the trust is created.