Texas Trust Laws

Texas Statutes - Subtitle B: Texas Trust Code: Creation, Operation, And Termination Of Trusts

Creation Requirements

Under Texas trust laws, the following are required for a valid trust to be formed:

• The Settlor must have a present intent to create a trust.

• The Settlor must have capacity to convey assets to the trust.

• The trust must comply with the Statute of Frauds.

• The trust must have a legal purpose.

• The Settlor must identify the property covered by the trust and place it in the trust for the benefit of the beneficiary.

• The trust must have a Trustee who holds legal title of property for the benefit of the trust's beneficiaries.

• The trust must have ascertainable beneficiaries. If the Settlor does not name the beneficiaries with sufficient certainty, the trust will fail.

• The trust may not violate the Rule Against Perpetuities.

Methods of Creating Trusts

A trust may be created by:

• A property owner's declaration that the owner holds the property as trustee for another person;

• A property owner's inter vivos transfer of the property to another person as trustee for the transferor or a third person;

• A property owner's testamentary transfer to another person as trustee for a third person;

• An appointment under a power of appointment to another person as trustee for the donee of the power or for a third person; or

• A promise to another person whose rights under the promise are to be held in trust for a third person.

Trust for Care of Animals

A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates on the death of the last surviving animal named in the trust.