Texas Property Code 240.008 – Power to Disclaim by Fiduciary Acting in Fiduciary Capacity
(a) Subject to this section and except to the extent the fiduciary‘s right to disclaim is expressly restricted or limited by a law of this state or by the instrument creating the fiduciary relationship, a fiduciary acting in a fiduciary capacity may disclaim, in whole or in part, any interest in or power over property, including a power of appointment and the power to disclaim, that would have passed to the ward, estate, trust, or principal with respect to which the fiduciary was acting had the disclaimer not been made even if:
(1) the creator of the interest or power imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim; or
(2) an instrument other than the instrument that created the fiduciary relationship imposed a restriction or limitation on the right to disclaim.
(b) Except as provided by Subsection (c), (d), or (f), a disclaimer by a fiduciary acting in a fiduciary capacity does not require court approval to be effective unless the instrument that created the fiduciary relationship requires court approval.
Terms Used In Texas Property Code 240.008
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Executor: A male person named in a will to carry out the decedent
- 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.
- 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
- Property: means real and personal property. See Texas Government Code 311.005
- Trustee: A person or institution holding and administering property in trust.
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) Except as provided by Subsection (c-1), the following disclaimers by a fiduciary acting in a fiduciary capacity are not effective unless approved by a court of competent jurisdiction:
(1) a disclaimer by a personal representative who is not an independent administrator or independent executor;
(2) a disclaimer by the trustee of a management trust created under Chapter 1301, Estates Code;
(3) a disclaimer by the trustee of a trust created under § 142.005; or
(4) a disclaimer that would result in an interest in or power over property passing to the person making the disclaimer.
(c-1) A disclaimer described by Subsection (c)(4) does not require court approval if the disclaimer is authorized under Subtitle P, Title 2, Estates Code.
(d) A trustee acting in a fiduciary capacity may not disclaim an interest in property that would cause the interest in property not to become trust property unless:
(1) a court of competent jurisdiction approves the disclaimer; or
(2) the trustee provides written notice of the disclaimer in accordance with § 240.0081.
(e) In the absence of a court-appointed guardian, without court approval, a natural guardian as described by § 1104.051, Estates Code, may disclaim on behalf of a minor child of the natural guardian, in whole or in part, any interest in or power over property, including a power of appointment, that the minor child is to receive solely as a result of another disclaimer, but only if the disclaimed interest or power does not pass to or for the benefit of the natural guardian as a result of the disclaimer.
(f) Unless a court of competent jurisdiction approves the disclaimer, a disclaimer by a fiduciary acting in a fiduciary capacity must be compatible with the fiduciary’s fiduciary obligations. A disclaimer by a fiduciary acting in a fiduciary capacity is not a per se breach of the fiduciary’s fiduciary obligations.
(g) Possible remedies for a breach of fiduciary obligations do not include declaring an otherwise effective disclaimer void or granting other legal or equitable relief that would make the disclaimer ineffective.