USA – TEXAS Trends and Developments Contributed by: Perrin Clark and Meredith McIver, Ytterberg Deery Knull LLP
Asset protection trusts For several legislative sessions, there has been a sig - nificant push to authorise the creation of self-settled asset protection trusts, excepting them from the gen - eral rule under Texas law that prohibits self-settled trusts from enjoying spendthrift protections. During the 2025 legislative session, Texas House Bill 4058 was introduced, authorising such trusts as a carve- out to this general prohibition, but it did not become law. Among other challenges, it faced opposition from those worried about its impact on future child sup - port obligations and its incompatibility with the state’s existing marital property laws. Nevertheless, it is likely that there will be a continued push to introduce self- settled asset protection trusts in Texas. This legislative effort appears intended to continue the modernisation of Texas trust law and advance Texas as a jurisdiction of choice for trust law purposes.
are another exception to the rule that a trust must have ascertainable beneficiaries, joining the ranks of charitable trusts and pet trusts in Texas. Given their novelty in Texas, the utility of these trusts with respect to planning for Texas clients is yet to be determined; however, in light of their use in other jurisdictions, they may help business owners who wish to lock in future governance structures and/or limit the possibility of future sales. They may also provide a planning vehicle for socially inclined business owners who are not able to utilise other strategies to fulfil their charitable goals. Current Trends Constitutional amendments to forbid certain taxes In recent years, Texas has eliminated the authority of the state legislature to impose a variety of taxes. In 2025, the Texas Constitution was amended to prohibit the imposition of capital gains tax and gift, estate and generation-skipping transfer taxes. These amend - ments follow Constitutional amendments in 2023 prohibiting a state wealth tax, and in 2019 prohibiting a state individual income tax.
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