HBA-CBW H.B. 628 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 628 By: Naishtat Judicial Affairs 7/18/2001 Enrolled BACKGROUND AND PURPOSE Prior to the 77th Legislature, a corporate fiduciary (trust company, state bank, national bank) was required to serve as the trustee for a management trust set up for a ward. However, the small size of these trusts often made it difficult to find a corporate fiduciary who is willing to serve as trustee. Without provisions allowing the court to appoint a noncorporate trustee when no corporate trustee was willing to serve, creating such trusts was difficult. House Bill 628 authorizes a court to appoint a noncorporate trustee under certain conditions and requires a noncorporate trustee to file a bond in the amount of the principal of the trust with the county clerk's office. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 628 amends the Texas Probate Code to authorize the court on application by the incapacitated person's guardian ad litem to create a trust to manage the funds of the incapacitated person's estate if the court finds it in that person's best interest. The bill requires the court to appoint a trust company or a state or national bank that has trust powers in this state to serve as trustee of the trust and sets forth exceptions. If the value of the trust's principal is $100,000 or less, the bill authorizes the court to appoint a person other than a trust company or a state or national bank to serve as trustee of the trust and the court determines the appointment to be in the best interests of the ward . If the value of the trust's principal is greater than $100,000, the court is authorized to appoint a person other than a trust company or state or national bank to serve as trustee only if no trust company or state or national bank is willing to serve as trustee and the court determines the appointment is in the best interests of the ward. The bill requires that the order direct the guardian or another person to deliver all or part of the assets of the guardianship to a person or corporate fiduciary appointed by the court as trustee of the trust. The bill requires the court to require a person other than a corporate fiduciary serving as trustee to file with the county clerk a bond in an amount equal to the value of the trust's principal and projected annual income and with the conditions the court determines are necessary. The bill modifies provisions relating to the terms of a management trust to provide that if the trustee is a corporate fiduciary, the trustee serves without giving a bond. EFFECTIVE DATE September 1, 2001.