Texas Property Code 142.005 – Trust for Property
(a) Any court of record with jurisdiction to hear a suit involving a beneficiary may, on application and on a finding that the creation of a trust would be in the best interests of the beneficiary, enter a decree in the record directing the clerk to deliver any funds accruing to the beneficiary under the judgment to a financial institution, except as provided by Subsections (m) and (n).
(b) The decree shall provide for the creation of a trust for the management of the funds for the benefit of the beneficiary and for terms, conditions, and limitations of the trust, as determined by the court, that are not in conflict with the following mandatory provisions:
(1) The beneficiary shall be the sole beneficiary of the trust.
(2) The trustee may disburse amounts of the trust’s principal, income, or both as the trustee in the trustee’s sole discretion determines to be reasonably necessary for the health, education, support, or maintenance of the beneficiary. The trustee may conclusively presume that medicine or treatments approved by a licensed physician are appropriate for the health of the beneficiary.
(3) The income of the trust not disbursed under Subdivision (2) shall be added to the principal of the trust.
(4) If the beneficiary is a minor who is not considered disabled for purposes of 42 U.S.C. Chapter 7, Subchapter XVI, the trust shall terminate on the death of the beneficiary, on the beneficiary’s attaining an age stated in the trust, or on the 25th birthday of the beneficiary, whichever occurs first.
(4-a) If the court finds that a minor beneficiary is considered disabled for purposes of 42 U.S.C. Chapter 7, Subchapter XVI, the trust shall terminate on the death of the beneficiary.
(4-b) If the beneficiary is an incapacitated person, the trust shall terminate on the death of the beneficiary or when the beneficiary regains capacity.
(5) A trustee that is a financial institution shall serve without bond.
(6) The trustee shall receive reasonable compensation paid from trust’s income, principal, or both on application to and approval of the court.
(7) The first page of the trust instrument shall contain the following notice:
Terms Used In Texas Property Code 142.005
- 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
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- 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
- Trustee: A person or institution holding and administering property in trust.