Texas Property Code 112.071 – Definitions
Terms Used In Texas Property Code 112.071
- 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
- Inter vivos: Transfer of property from one living person to another living person.
- Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Property: means real and personal property. See Texas Government Code 311.005
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Trustee: A person or institution holding and administering property in trust.
In this subchapter:
(1) “Authorized trustee” means a person, other than the settlor, who has authority under the terms of a first trust to distribute the principal of the trust to or for the benefit of one or more current beneficiaries.
(2) “Charity” means a charitable entity or a charitable trust, as those terms are defined by § 123.001.
(3) “Current beneficiary,” with respect to a particular date, means a person who is receiving or is eligible to receive a distribution of income or principal from a trust on that date.
(4) “First trust” means an existing irrevocable inter vivos or testamentary trust all or part of the principal of which is distributed in further trust under § 112.072 or 112.073.
(5) “Full discretion” means a 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.
(6) “Limited discretion” means:
(A) a power to distribute principal according to mandatory distribution provisions under which the trustee has no discretion; or
(B) a 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 ended on that date without causing the trust to terminate.
(8) “Principal” means property held in trust for distribution to a remainder beneficiary when the trust terminates and includes income of the trust that, at the time of the exercise of a power of distribution under § 112.072 or 112.073, is not currently required to be distributed.
(9) “Second trust” means any irrevocable trust to which principal is distributed under § 112.072 or 112.073.
(10) “Successor beneficiary” means a beneficiary other than a current or presumptive remainder beneficiary. The term does not include a potential appointee under a power of appointment held by a beneficiary.