BILL ANALYSIS

C.S.H.B. 3184

By: Thompson, Senfronia

Judiciary & Civil Jurisprudence

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Attorneys who work in guardianship law have suggested that current law should be updated to remove barriers experienced by those practicing guardianship law and by individuals impacted by guardianship experiences. Current law presents the following issues:

· certain guardianship proceeding notices must be delivered by registered or certified mail with proof of delivery, but it is not always a reliable delivery method as lawyers often do not get the return receipt back;

· it is not clear whether an attorney ad litem may accept service on behalf of a proposed ward;

· there are some issues with how statute refers to letters of guardianship as a certificate and the order in which the steps taken to qualify as a guardian are listed;

· while there are provisions allowing for the appointment of a successor guardian by a surviving parent who is a guardian of the person or guardian of the person and estate for their adult child, there are no similar provisions for a parent who is solely guardian of the estate;

· wards often have estates less than $20,000, but it is cost prohibitive to open a guardianship of estate, so the funds often remain inaccessible;

· if a prior guardian published notice to a secured creditor, a subsequent guardian doesn't have to republish, but there is no such provision for unsecured creditors;

· a guardian of a Medicaid recipient can get up to $3,000 a year in compensation, but there is no such provision for guardians of the person generally, and their compensation is limited to just five percent of the ward's gross income;

· minors and wards can sell real property without a guardianship of the estate if the property is worth $100,000 or less, but that amount is in need of updating;

· on occasion, one spouse is a ward, while the other spouse is not the guardian and either can't or won't provide the ward spouse's guardian access to the ward's half of community property; and

· changes are needed regarding the ability of a nonresident minor or incapacitated person to obtain certain funds.

C.S.H.B. 3184 makes changes to the state's guardianship laws to address these issues.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 3184 amends the Estates Code to revise provisions relating to guardianship proceedings and to authorize the delivery of certain communications in connection with those proceedings to be made by a qualified delivery method as an alternative to certified or registered mail in an action filed or a proceeding commenced on or after the bill's effective date. The bill defines "qualified delivery method" as the following:

· hand delivery by courier, with courier's proof of delivery receipt;

· certified or registered mail, return receipt requested, with return receipt; or

· a private delivery service designated as a designated delivery service by the U.S. Secretary of the Treasury, with proof of delivery receipt.

C.S.H.B. 3184 expands the approved delivery methods for the following notices and citations to include delivery by any qualified method:

· notice sent by the court to a guardian regarding a motion made by the court to transfer the guardianship to another county;     

· citation or notice served on a party's behalf to an attorney representing the party in a guardianship proceeding;

· citation or notice required to be served on a guardian or receiver for which there is no statutorily specified delivery method;

· notice sent by a person filing an application for guardianship to certain of the proposed ward's relatives and caretakers;

· notice of the resignation of a resident agent of a guardian for service of process;

· certain notices required to be sent by a guardian of an estate to claimants against the estate;  

· notice sent to all interested persons by a guardian of a ward's estate who is applying to the court to spend money from the ward's estate for the education and maintenance of the ward's spouse or dependent;

· notice sent by an applicant for the authority to establish an estate or other transfer plan for a ward who has been shown to probably remain incapacitated for life;

· notice sent by a guardian of a ward's estate who is applying for an in camera inspection of certain of the ward's estate planning instruments;

· notice sent by the court to a ward regarding the receipt of the ward's application for the complete restoration of the ward's capacity or modification of their guardianship; and

· notice sent by the court to a guardian regarding the removal of the guardian;

The bill revises provisions relating to the use of registered or certified mail to send citations or notices in a guardianship proceeding to reflect the use of a qualified delivery method instead. The bill requires the applicant or movant in a guardianship proceeding to pay the cost of delivery of a citation or notice served by mail or qualified delivery method.

C.S.H.B. 3184 clarifies that an attorney ad litem representing a proposed ward in a guardianship proceeding may accept service on the ward's behalf if the proposed ward has been personally served with notice of the proceeding.

C.S.H.B. 3184 revises the authorization for the surviving parent of an adult individual who is an incapacitated person, if the parent is the guardian of the individual's person or the guardian of both the person and the estate, to designate an eligible individual to serve as guardian after the parent dies or in the event of the parent's incapacity, as follows:

· makes that authorization also applicable to a surviving parent who is the guardian of the individual's estate only; and

· includes the parent's resignation as guardian among the events that trigger the designated person's service.

The bill establishes that a surviving parent who is both the guardian of the individual's person and estate may designate different eligible persons to serve in each guardianship role.    

C.S.H.B. 3184 revises the order in which statute lists the requirements that must be met for a guardian to be considered qualified to put the requirement to file the required bond with the clerk after the requirement to obtain the judge's approval of the bond. The bill removes references to letters of guardianship as a "certificate" in provisions relating to the effect of such letters and specifies that the seal under which the letters are issued is the court's seal. These provisions apply to a guardianship created before, on, or after the bill's effective date.

C.S.H.B. 3184 authorizes a guardian of the person of a ward for whom the court has not appointed a guardian of the estate, on application to and order from the court, to access, manage, and spend the ward's funds in an amount not to exceed $20,000 per year for the ward's benefit. The bill requires the guardian to include any such expenditures in their annual report to the court and to file a new bond or a rider to an existing bond that meets the surety requirements for a guardian of the estate's bond. When there is no longer a need for the guardian to access, manage, or spend the ward's funds, the guardian must file a sworn affidavit of fulfillment with the court. After the filing of the affidavit, the court, on motion filed with the court, may authorize the guardian to file a new bond or a rider to an existing bond that meets the requirements for a guardian of the person's bond and may discharge the guardian of the person and the guardian's sureties on the bond that met the requirements for a guardian of the estate's bond. These provisions apply to a guardianship created before, on, or after the bill's effective date.

C.S.H.B. 3184 clarifies that a guardian of an estate is not required to give notice to persons with either secured or unsecured claims against the estate if another person also appointed as guardian or a former guardian has given that notice.

C.S.H.B. 3184 gives the court the option to cap compensation for a guardian serving as a guardian of the person of the ward alone at $3,000 per year if that amount is greater than five percent of the ward's gross income. This provision applies to a guardianship created before, on, or after the bill's effective date.

C.S.H.B. 3184 authorizes a court that finds that a ward's spouse fails to comply with an order to deliver to the guardian of the ward's estate certain community property that is subject to the spouse's joint management, control, and disposition, after notice and a hearing, to order any third party or entity in possession to deliver the community property to the guardian.

C.S.H.B. 3184 raises from $100,000 to $250,000 the cap on the net value of certain property that is subject to sale or mortgage by an applicant after court approval as follows:

· a minor's property interest that is subject to sale by a parent or managing conservator who is not the minor's guardian;

· a ward's property interest that is subject to sale by a guardian of the ward's person or estate who is appointed by a foreign court;

· a minor's interest in a residence homestead that is subject to use to secure an extension of credit for a minor's parent, if the parent has a homestead interest in the property, or for the minor's managing conservator, on behalf of the minor; and

· a minor ward's interest in a residence homestead that is subject to use to secure an extension of credit on behalf of the minor ward for the guardian of the person of the ward.

These provisions apply only to an application for a court order filed on or after the bill's effective date.

C.S.H.B. 3184 raises from $100,000 to $250,000 the cap on the amount of money to which the following persons are entitled from an applicable debtor as a result of transactions in the state, the right to which is liquidated and is uncontested in any pending lawsuit in the state:

· a resident creditor who is an incapacitated person or the former ward of a guardianship who does not have a legal estate guardian; and

· a creditor who is a nonresident minor, a nonresident person who is adjudged by a foreign court to be incapacitated, or a nonresident former ward of a guardianship who does not have a legal guardian that is qualified in Texas.

The bill removes the condition that a nonresident minor or nonresident person adjudged by a foreign court to be incapacitated have a nonresident guardian in order to be entitled to such money. These provisions apply only to a payment made by a debtor on or after the bill's effective date. 

C.S.H.B. 3184 repeals Section 1104.103(c), Estates Code.

EFFECTIVE DATE

September 1, 2023.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 3184 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes provisions absent from the introduced to do the following:

· require an applicant or movant in a guardianship proceeding to pay the cost of delivery of a citation or notice served by mail or qualified delivery method;

· revise the order in which statute lists the requirements that must be met for a guardian to be considered qualified;

· remove references to letters of guardianship as a "certificate"; and

· clarify that the seal under which such letters are issued is the court's seal.

The introduced required the filing of a bond by a guardian of a ward's person who is not also the guardian of the ward's estate but is authorized by a court to access, manage, and spend the ward's funds under the bill's provisions. The substitute revises this bond requirement to clarify that the guardian must file a new bond or a rider to an existing bond that meets the surety requirements for a guardian of the estate's bond. Additionally, the introduced and the substitute differ with respect to what happens after the filing of an affidavit indicating there is no longer a need for the guardian of the person to access, manage, or spend the ward's funds. Whereas the introduced provided that the sureties on the filed bond are automatically released from all liability for the future acts of the guardian, the substitute authorizes the court, on motion filed with the court, to authorize the guardian to file a new bond or a rider to an existing bond that meets the requirements for a guardian of the person's bond and to discharge the guardian of the person and the guardian's sureties on the bond that met the requirements for a guardian of the estate's bond.