{"id":12759,"date":"2023-08-06T06:00:25","date_gmt":"2023-08-06T11:00:25","guid":{"rendered":"https:\/\/legaltalktexas.hammerle.com\/?p=12759"},"modified":"2025-06-18T12:53:26","modified_gmt":"2025-06-18T17:53:26","slug":"trust-tweaks-small-changes-big-outcomes","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/legal-talk\/trust-tweaks-small-changes-big-outcomes\/","title":{"rendered":"Trust Tweaks: Small Changes with Big Outcomes"},"content":{"rendered":"<p><i><span style=\"font-weight: 400;\">This is part 2 in a 3-part series.\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Trusts received more than their share of attention in the 2023 Texas legislative session. Here is a quick summary of some noteworthy changes.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Homestead Exemptions and Revocable Trusts<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A lot of people with <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/wills-trusts\/funding-of-revocable-living-trusts\/\"><span style=\"font-weight: 400;\">revocable trusts<\/span><\/a><span style=\"font-weight: 400;\"> want to place all their assets, including their homestead, into their trust. They also, of course, want to keep their valuable homestead exemptions. They can do both, but only if the trust has the right, Texas-specific language. However, the tax code and the property code require different language, and that often trips up drafters. The new law harmonizes the differences. Now the revised property code section requires the trust to provide that the settlor\/beneficiary has the right to occupy the property at no cost or rent free and without charge. If your homestead is in a trust, it is probably time to review the language.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Noncharitable Trust without Ascertainable Beneficiary<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Some people want a <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/wills-trusts\/different-types-of-trusts-in-estate-planning\/\"><span style=\"font-weight: 400;\">trust<\/span><\/a><span style=\"font-weight: 400;\"> set up to accomplish a particular purpose, such as continuing a business, preserving a collection, or maintaining a family compound. Unfortunately, there was not an easy way to do that under Texas law, which required every trust to have a named beneficiary. That just changed. Let\u2019s all give a big hearty welcome to a new kind of trust: the \u201cNoncharitable Trust without Ascertainable Beneficiary.\u201d This wonderful instrument allows you to set up a trust for a specific purpose without naming a beneficiary. Instead, the trust names a \u201ctrust enforcer\u201d to make sure the trust is used to meet the specific purpose for which it was organized. We expect good things from this new purpose trust.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Restatement of Trusts<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The next change addressed some confusion that arose in the third edition of the Restatement of Trusts, a handy little work that offers guidance to trustees, lawyers, and judges. The 3<\/span><span style=\"font-weight: 400;\">rd<\/span><span style=\"font-weight: 400;\"> Restatement changed, somewhat dramatically, the guidance about what property in the trust was subject to the claims of creditors. This upset a lot of people. The Texas bill clarified that Texas rejects the 3<\/span><span style=\"font-weight: 400;\">rd<\/span><span style=\"font-weight: 400;\"> Restatement on this issue. The result is that more trust property is protected from creditors.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">New Decanting Law<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Decanting is a handy little tool used to change <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/wills-trusts\/five-common-trust-mistakes-to-avoid\/\"><span style=\"font-weight: 400;\">trust terms<\/span><\/a><span style=\"font-weight: 400;\">. Briefly, when you decant, then you move assets from an old trust into a brand-new trust. The problem was that the new trust came with a new name and tax ID number. That meant the trustee had to spend a lot of extra time changing the name and tax ID on accounts and assets from the old trust to the new trust. The new law made a simple but effective fix by providing that the new trust could use the old trust\u2019s name and tax ID.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Naming Trust Assets<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The last big change came on another technicality that had caused big problems. It has to do with naming assets that belong in a trust. A trust can only act through its trustee. Suppose the Trust is called The Smith Family Trust, and the trustee is Joe Smith. The title to property should not be held as \u201cthe Smith Family Trust,\u201d because the trust cannot act on its own. Instead, the title should be \u201cJoe Smith, Trustee of the Smith Family Trust.\u201d Some people had argued, successfully, that a conveyance of property to just a trust\u2019s name is void. The new law addresses that problem by making it clear that a conveyance made to a trust should be considered a conveyance to the trustee of the trust.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Hammerle Morris Can Help<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Looking for legal assistance? <\/span><a href=\"https:\/\/hammerle.com\/lewisville-attorney\/#form\"><span style=\"font-weight: 400;\">Schedule a consultation<\/span><\/a><span style=\"font-weight: 400;\"> with one of our experienced attorneys to discuss your options.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Attorney <\/span><\/i><a href=\"https:\/\/hammerle.com\/lawyers\/virginia-hammerle\/\"><i><span style=\"font-weight: 400;\">Virginia Hammerle<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> has practiced litigation and estate planning for 40 years. She is founder and managing attorney for <\/span><\/i><a href=\"https:\/\/hammerle.com\/\"><i><span style=\"font-weight: 400;\">Hammerle Morris Law Firm<\/span><\/i><\/a><i><span style=\"font-weight: 400;\">.<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Read part 1 of the series: <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/legal-talk\/new-laws-texas-2023-brought-changes-for-seniors\/\"><span style=\"font-weight: 400;\">New 2023 Laws for Texas<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is part 2 in a 3-part series.\u00a0 Trusts received more than their share of attention in the 2023 Texas legislative session. Here is a quick summary of some noteworthy changes. Homestead Exemptions and Revocable Trusts A lot of people with revocable trusts want to place all their assets, including their homestead, into their trust. [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":12760,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[21],"tags":[],"class_list":{"0":"post-12759","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-legal-talk"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Trust Tweaks: Small Changes with Big Outcomes | Hammerle Morris Law Firm<\/title>\n<meta name=\"description\" content=\"Discover the latest changes in Texas trusts from the 2023 Texas legislative session.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hammerle.com\/legaltalk\/legal-talk\/trust-tweaks-small-changes-big-outcomes\/\" 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