[Caption. See § 3 of the Introduction in this manual.]
Restated Management Trust
This instrument establishes and restates the terms of a management trust as authorized by chapter 1301 of the Texas Estates Code.
1.Guardianship. Cause No. [number], styled “[style of case],” has been pending before the [designation] Court of [county] County, Texas.
2.Original Management Trust. By order dated [date], the Court created a management trust for [name of beneficiary] pursuant to chapter 1301 of the Texas Estates Code and appointed [name of original trustee] of [city], Texas, as trustee of the Original Management Trust.
3.Restated Management Trust. By order dated [date], the Court created a restated management trust for [name of ward], Ward, pursuant to chapter 1301 of the Texas Estates Code to replace the Original Management Trust and directed [name of original trustee], Trustee, to deliver the assets of the Original Management Trust to the trustee of this Restated Management Trust (the Trust), who is named below.
4.Beneficiary. [Name of beneficiary], Beneficiary, an incapacitated person born on [date of birth], is the sole beneficiary of the Trust. Beneficiary is the ward in the above-described guardianship.
5.Trustee Named. [Name of trustee], Trustee, is the sole trustee of the Trust.
6.Bond, Liability. No bond or other security is required of Trustee. No guardian of Beneficiary’s estate or person or any surety on the bond of any guardian will be liable for an act or omission of Trustee.
7.Resignation. Trustee may not resign as trustee nor may another trustee be substituted in place of Trustee without receiving prior authority from the Court.
8.Trust Estate. The Trust will be funded with all the property remaining in the Original Management Trust. This property will constitute the initial principal of the Trust, which, together with all other property transferred to the Trust and all income therefrom, will constitute the trust estate of the Trust.
9.General Distributions. Trustee will pay to or apply for the benefit of Beneficiary as much of the income and principal of the Trust as may be reasonably necessary, in the sole discretion of Trustee, to provide for the health, education, support, or maintenance of Beneficiary and to comply with any mandatory provision of current or future law that may apply to management trusts created under chapter 1301 of the Texas Estates Code. Any income not distributed under this paragraph will be added to the principal of the Trust.
10.Additional Distributions. In addition, Trustee may pay to Beneficiary’s guardian or to any person having physical custody of Beneficiary such amounts of the principal of the Trust as may be reasonably appropriate, in the sole discretion of Trustee, to provide for the support of Beneficiary.
11.Distribution Considerations. In making any discretionary distributions Trustee will consider (a) the standard of living to which Beneficiary has been accustomed before the creation of the Trust, (b) any known resources of Beneficiary, (c) the ability of any person who is legally obligated to support Beneficiary to do so, (d) the ability of Beneficiary to earn funds for Beneficiary’s own support and maintenance except while obtaining an education, and (e) any law that may apply to management trusts created under chapter 1301 of the Texas Estates Code. This Trust is intended to safeguard the Trust estate [include if applicable: , which was created to replace the Medicaid programs that would normally provide for the Beneficiary’s lifetime care]. The creation and provision of the Trust, along with the continued supervision of the Court, is intended to guarantee Beneficiary the highest quality of life in the least restrictive environment. Accordingly, the provisions of the Trust relating to health, education, support, and maintenance will be broadly construed to the extent allowed under chapter 1301 of the Texas Estates Code.
12.Facility of Payment. Except as otherwise provided, Trustee may make any distribution required or permitted under this Trust, without the intervention of any guardian or other legal representative, in any of the following ways: (a) to Beneficiary directly, if appropriate, (b) to the natural or legal guardian of Beneficiary’s person, (c) to any person furnishing care, education, support, or maintenance to Beneficiary, or (d) by using any distribution directly for Beneficiary’s benefit.
13.Termination. The Trust will terminate on the death of Beneficiary or on the Court’s determination that a guardianship is not necessary and the Trust is no longer needed. If Beneficiary is living on termination of the trust, Trustee will pay all the then-remaining trust estate of the Trust to Beneficiary free of any other trust. If Beneficiary is deceased on termination of the Trust, Trustee will pay all the then-remaining trust estate of the Trust to the personal representative of Beneficiary’s estate, but only if Beneficiary’s will is admitted to probate or a personal representative of Beneficiary’s estate qualifies within six months of Beneficiary’s death. If not, Trustee will pay all the then-remaining trust estate to Beneficiary’s heirs at law under sections 201.001 and 201.002 of the Texas Estates Code.
14.Trust Amendment, Modification, or Revocation. The Court may amend, modify, or revoke the Trust at any time before the date of the Trust’s termination. No other person, including Beneficiary, the guardian of Beneficiary’s person or estate, or other legal representative of Beneficiary, may amend, modify, or revoke the Trust.
15.Spendthrift Provision. To the fullest extent allowed by law (a) the Trust will be a spendthrift trust, (b) no property of the Trust will be subject to anticipation or assignment by Beneficiary, (c) no property of the Trust will be subject to attachment by or the interference or control of any creditor or assignee of Beneficiary or be taken or reached by any legal or equitable process in satisfaction of any debt or liability of Beneficiary except in accordance with the applicable provisions of the Texas Estates Code, (d) any attempted transfer or encumbrance of any interest in the trust estate of the Trust by Beneficiary before its actual distribution will be wholly void, and (e) no distribution from the Trust will be made to satisfy any obligation to Beneficiary if such obligation would otherwise be met from any federal or state assistance program if the Trust had not been created.
16.Trustee’s Investment Authority. Trustee will invest the trust estate in accordance with the standards set forth in chapter 113 of title nine of the Texas Property Code (or any subsequent applicable law). Trustee may also invest all or any part of the trust estate in one or more common trust funds or common mutual funds now or hereafter established by Trustee. To the maximum extent allowed by law, the Trustee’s investment authority will not be limited by chapter 1161 of the Texas Estates Code or any other provision of title three of the Texas Estates Code.
17.Trustee’s Compensation and Expense Reimbursement. Trustee is entitled to reimbursement for all necessary and reasonable expenses incurred by Trustee in performing any duty as trustee. Trustee is also entitled to fair and reasonable compensation determined in accordance with the then-customary and prevailing charges for similar services charged by corporate fiduciaries in [city, county] County, Texas, in compliance with the existing guardianship compensation statutes. Trustee’s compensation initially will be based on its current fee schedule, a copy of which is attached to this instrument. Trustee may receive its compensation (and reimburse itself for its expenses) on an annual, quarterly, or monthly basis, at Trustee’s election. Trustee’s fees are subject to annual review by the Court and review at any time on the Court’s own motion or at the instance of Trustee or any other party interested in the welfare of Beneficiary. On a hearing of the matter, the Court may take any action it deems proper with respect to such fees and expenses.
18.Trustee Powers. In the administration of the Trust, Trustee will have the following powers:
a.To exercise all the powers now or hereafter granted to trustees of express trusts by the Texas Trust Code or any corresponding statute, except in any instance in which the Texas Trust Code or other statutory provisions may conflict with the express provisions of this instrument, or the provisions contained in Texas Estates Code chapter 1301, in which case the provisions of this instrument and the Texas Estates Code will control.
b.To adjust, compromise, abandon, sue on, or defend and otherwise deal with and settle all claims in favor of or against the Trust and to engage and retain attorneys or accountants at any time reasonably necessary to provide for the prudent management and preservation of the Trust.
c.To continue to act as trustee of the Trust regardless of any change of name of Trustee and regardless of any reorganization, merger, or consolidation of Trustee.
19.Records, Annual and Final Account. Trustee will keep account books for the Trust and all transactions involving the Trust. Trustee will prepare and file with the Court a regular annual account and, on the termination of the Trust, a final account. All accounts will be prepared and filed in the same manner and form required of a guardian under title three of the Texas Estates Code. Trustee will provide copies of all accounts to any then-serving guardian of Beneficiary’s person and any then-serving guardian of Beneficiary’s estate. All accounts are subject to court review and approval in the same manner required of accounts prepared by a guardian under title three of the Texas Estates Code.
20.Third Parties Dealing with Trustee. No person or entity dealing with Trustee will be obligated to see to the application of any property paid or delivered to Trustee, and no such person or entity will be obligated to inquire into the expediency or propriety of any transaction or the authority of Trustee to enter into and consummate the same on such terms as Trustee may deem reasonably appropriate.
21.Headings. The headings in this instrument are for convenience only and do not define or limit the scope or intent of the provisions to which they refer.
22.Multiple Originals. This instrument may be signed in multiple originals, any one of which will be deemed an original for all purposes.
23.Inception of Trust. The Trust will become effective on the last to occur of (a) the Court’s entry of its order creating this Trust, (b) the initial transfer of any property to Trustee, (c) Trustee’s acceptance of the Trust, evidenced by the signature below of the appropriate officer of Trustee, or (d) the filing of the original of this document with the county clerk in the guardianship proceeding.
SIGNED on ________________________________.
[Name of trustee]
Trustee
By:
[Name]
[Title]
This instrument was acknowledged before me on [date] by [name of representative], as [capacity] of [name of trustee] as Trustee, a state trust corporation, on behalf of the corporation.
Notary Public, State of Texas
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