Article by: Bryan A. Phillips
Effective June 18, 2023, the Governor of Texas signed into law House Bill 2333, for the first time allowing Texans to establish noncharitable trusts for a stated purpose rather than for one or more ascertainable beneficiaries (referred to generally in this Article as a “Purpose Trust”). Tex. Prop. Code Ann. 112.121-123. This statute may provide, at minimum, a partial solution to the long-standing conundrum of what to do when owners are adamant that businesses or other assets (e.g., family property, collections, etc.) not be sold or that business profits should be used to benefit certain causes. Before exploring the Texas statute and how a planner might leverage this new concept for a client, it makes sense to take a look at how we got here.