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Texas Statutes (Last Updated: January 4, 2014) |
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PROBATE CODE |
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Chapter XIII. GUARDIANSHIP |
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Part 4. ADMINISTRATION OF GUARDIANSHIP |
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Subpart N. MANAGEMENT TRUSTS |
Sec. 867. CREATION OF MANAGEMENT TRUST
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(a) In this section, "financial institution" means a financial institution, as defined by Section 201.101, Finance Code, that has trust powers and exists and does business under the laws of this or another state or the United States.
(a-1) The following persons may apply for the creation of a trust under this section:
(1) the guardian of the estate of a ward;
(2) the guardian of the person of a ward;
(3) the guardian of both the person of and estate of a ward;
(4) an attorney ad litem or guardian ad litem appointed to represent a ward or the ward's interests;
(5) a person interested in the welfare of an alleged incapacitated person who does not have a guardian;
(6) an attorney ad litem or guardian ad litem appointed to represent an alleged incapacitated person who does not have a guardian; or
(7) a person who has only a physical disability.
(b) On application by an appropriate person as provided by Subsection (a-1) of this section and subject to Subsection (b-1) of this section, if applicable, the court with jurisdiction over the proceedings may enter an order that creates a trust for the management of the funds of the person with respect to whom the application is filed if the court finds that the creation of the trust is in the person's best interests.
(b-1) On application by an appropriate person as provided by Subsection (a-1) of this section and regardless of whether an application for guardianship has been filed on the alleged incapacitated person's behalf, a proper court exercising probate jurisdiction may enter an order that creates a trust for the management of the estate of an alleged incapacitated person who does not have a guardian if the court, after a hearing, finds that:
(1) the person is an incapacitated person; and
(2) the creation of the trust is in the incapacitated person's best interests.
(b-2) If a proceeding for the appointment of a guardian for an alleged incapacitated person is pending, an application for the creation of a trust for the alleged incapacitated person under Subsection (b-1) of this section must be filed in the same court in which the guardianship proceeding is pending.
(b-3) The court shall conduct a hearing to determine incapacity under Subsection (b-1) of this section using the same procedures and evidentiary standards as required in a hearing for the appointment of a guardian for a proposed ward. The court shall appoint an attorney ad litem and, if necessary, may appoint a guardian ad litem, to represent the interests of the alleged incapacitated person in the proceeding.
(b-4) If, after a hearing, the court finds that a person for whom an application is filed under Subsection (b-1) of this section is an incapacitated person but that it is not in the incapacitated person's best interests to have the court create a management trust for the person's estate, the court may appoint a guardian of the person or estate, or both, for the incapacitated person without the necessity of instituting a separate proceeding for that purpose.
(b-5) Except as provided by Subsections (c) and (d) of this section, the court shall appoint a financial institution to serve as trustee of a trust created under this section.
(c) Subject to Subsection (d) of this section, if the court finds that it is in the best interests of the person for whom a trust is created under this section, the court may appoint a person or entity that meets the requirements of Subsection (e) of this section to serve as trustee of the trust instead of appointing a financial institution to serve in that capacity.
(d) If the value of the trust's principal is more than $150,000, the court may appoint a person or entity other than a financial institution in accordance with Subsection (c) of this section to serve as trustee of the trust only if the court, in addition to the finding required by that subsection, finds that the applicant for the creation of the trust, after the exercise of due diligence, has been unable to find a financial institution in the geographic area willing to serve as trustee.
(e) The following are eligible for appointment as trustee under Subsection (c) or (d) of this section:
(1) an individual, including an individual who is certified as a private professional guardian;
(2) a nonprofit corporation qualified to serve as a guardian; and
(3) a guardianship program.
(f) If a trust is created for a person, the order shall direct any person or entity holding property belonging to the person for whom the trust is created or to which that person is entitled to deliver all or part of the property to a person or corporate fiduciary appointed by the court as trustee of the trust. The order shall include terms, conditions, and limitations placed on the trust. The court may maintain the trust under the same cause number as the guardianship proceeding, if the person for whom the trust is created is a ward or proposed ward.