Texas Probate Code - Section 865. Power To Make Tax-Motivated Gifts
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Texas Laws > Probate Code > Texas Probate Code - Section 865. Power To Make Tax-Motivated Gifts
Section: 856 857 858 860 861 862 863 865 865A 866 867 867A 868 868A 868B
§ 865. POWER TO MAKE TAX-MOTIVATED GIFTS. (a) On
application of the guardian of the estate or any interested party
and after the posting of notice, the court, after hearing, may enter
an order that authorizes the guardian to apply the principal or
income of the ward's estate that is not required for the support of
the ward or the ward's family during the ward's lifetime toward the
establishment of an estate plan for the purpose of minimizing
income, estate, inheritance, or other taxes payable out of the
ward's estate on a showing that the ward will probably remain
incapacitated during the ward's lifetime. On the ward's behalf, the
court may authorize the guardian to make gifts, outright or in
trust, of the ward's personal property or real estate to or for the
(1) an organization to which charitable contributions may
be made under the Internal Revenue Code and in which it is shown the
ward would reasonably have an interest;
(2) the ward's spouse, descendant, or other person related
to the ward by blood or marriage who are identifiable at the time of
(3) a devisee under the ward's last validly executed will,
trust, or other beneficial instrument if the instrument exists;
(4) a person serving as guardian of the ward if the person is
eligible under either Subdivision (2) or (3) of this subsection.
(b) The person making an application to the court under this
section shall outline the proposed estate plan and set forth all the
benefits that are to be derived from the estate plan. The
application must indicate that the planned disposition is
consistent with the ward's intentions if the ward's intentions can
be ascertained. If the ward's intentions cannot be ascertained,
the ward will be presumed to favor reduction in the incidence of the
various forms of taxation and the partial distribution of the
ward's estate as provided by this section.
(c) The court may appoint a guardian ad litem for the ward or
any interested party at any stage of the proceedings if it is deemed
advisable for the protection of the ward or the interested party.
(d) A subsequent modification of an approved plan may be
made by similar application to the court.
(e) A person who makes an application to the court under
this section shall mail notice of the application by certified mail
(1) all devisees under a will, trust, or other beneficial
instrument relating to the ward's estate;
(2) the ward's spouse;
(3) the ward's dependents; and
(4) any other person as directed by the court.
(f) In an order entered under Subsection (a) of this
section, the court may authorize the guardian to make gifts as
provided by Subsection (a) of this section on an annual or other
periodic basis without subsequent application to or order of the
court if the court finds it to be in the best interest of the ward
and the ward's estate. The court, on the court's own motion or on
the motion of a person interested in the welfare of the ward, may
modify or set aside an order entered under this subsection if the
court finds that the ward's financial condition has changed in such
a manner that authorizing the guardian to make gifts of the estate
on a continuing basis is no longer in the best interest of the ward
and the ward's estate.
Added by Acts 1993, 73rd Leg., ch. 957, § 1, eff. Sept. 1, 1993.
Amended by Acts 1997, 75th Leg., ch. 77, § 9, eff. Sept. 1, 1997;
Subsec. (f) added by Acts 2005, 79th Leg., ch. 256, § 1, eff.
Sept. 1, 2005.
Last modified: August 11, 2007