BILL ANALYSIS C.S.H.B. 2401 By: Thompson May 4, 1995 Committee Report (Substituted) BACKGROUND The Texas Academy of Probate Lawyers biennially review the state's probate and trusts laws and make recommendations to correct and clarify these laws. PURPOSE This bill makes minor corrective and clarifying changes in sections 58, 69, 137, 138, 151(a), 520, 523, and 524, Probate Code, and in Section 113.11, Property Code. The bill also amends 522 and adds 522A to clarify procedure in certain emergency applications. This bill also in section 368(b), Probate Code, expands the time a judge has to make a decision involving an estate concerning mineral rights. RULEMAKING AUTHORITY It is the opinion of this committee that this bill does not grant any rulemaking authority to any state official, agency, department, or institution. SECTION-BY-SECTION ANALYSIS SECTION 1. Amends Section 58(c) and (d), Probate Code. This Section was amended in the 1993 Legislative Session to clarify that the bequest of a tangible item of real or personal property does not also bequeath the personal property located in or on that item (i.e., a bequest of the china cupboard does not include the china and silver stored therein, unless expressly so stated). Stock certificates (which are intangible personal property) were erroneously included in paragraph (d) (2), as an example of tangible personal property. This amendment corrects that error and makes other minor clarifications. SECTION 2. Amends Section 69(a), Probate Code. Section 69(a) of the Probate Code has the effect of automatically deleting any bequests or fiduciary appointments in favor of a former spouse from a will executed before the divorce. This amendment revises Section 69(a) to include annulled marriages and to insert the phrase "unless the will expressly provided otherwise" to allow a testator to make a bequest or fiduciary appointment that will survive divorce. SECTION 3. Amends Section 137, Texas Probate Code. Section 137, Probate Code, provide a means for the distribution of small estates (under $50,000, exclusive of homestead and exempt property) by affidavit without the appointment of an executor or administrator. As currently enacted, the calculation set forth in Section 137 to determine if an estate will qualify for this simplified procedure excludes the value of homestead and exempt property but fails to also exclude liabilities secured thereby. Because the value of the homestead is excluded but any homestead mortgage is included as a liability, this procedure is unavailable to virtually any small estate with a homestead mortgage. The proposed amendment to paragraph (a) would correct the oversight by also excluding liabilities secured by homestead and exempt property from the qualifying calculation. The other revisions to this Section are not substantive changes to the law but are intended to make otherwise very convoluted language more readily understandable. SECTION 4. Amends Section 138, Texas Probate Code, to remove an unnecessary gender specific pronoun. SECTION 5. Amends Section 151(a) Texas Probate Code, to provide that an independent executor can not close an estate if there is pending litigation. SECTION 6. Amends Section 368(b), Texas Probate Code, to expand the time a judge has to make a decision involving an estate concerning mineral rights. SECTION 7. Amends Section 520, Texas Probate Code, to provide that an application for emergency intervention under this subsection may be filed in the county in which the rental accommodation that contain the decedents personal property are located. SECTION 8. Amends Part 2, Chapter XII, Texas Probate Code, by adding Section a to provide that an applicant may file an emergency application under Section 520 of this code provided there is not application filed and pending under Section 81, 82, 137, or 145 of this code and the applicant needs to obtain funds for the burial of the decedent or needs to gain access to rental accommodations in which the decedent's personal property is located and the applicant has been denied access to those accommodations. SECTION 9. Amends Section 522, Texas Probate Code, to make this Section apply only to applications for emergency intervention for funeral and burial expenses, makes conforming and clarification changes. SECTION 10. Amends Part 2, Chapter XII, Texas Probate Code, by adding Section 522A to specify what must be in an application for emergency intervention to gain access to rental accommodations of a decedent at the decedent's death that contain the decedent personal property. SECTION 11. Amends Section 523, Texas Probate Code, to make corrective and clarifying amendments. SECTION 12. Amends Section 524, Texas Probate Code, to make corrective and clarifying amendments. SECTION 13. Section 702(b), Texas Probate Code, to provide that a bond is not required by a guardian that is a guardianship program operated by a county with a population of more than 2.5 million, according to the most recent decennial census. SECTION 14. Amends Section 113.11(a) and (b), Property Code. Section 113.111 of the Trust Code sets forth the charges a trustee shall make against income and the charges to be made against principal. The current paragraph (b) (7) relates to "regularly recurring charges payable from income" but is placed in the subparagraph dealing with charges against principal. This amendment moves the existing paragraph (b) (7) into its proper position as paragraph (a) (8). SECTION 15. Effective Date. SECTION 16. Application of the Act. SECTION 17. Emergency Clause. COMPARISON OF THE SUBSTITUTE TO THE ORIGINAL The committee substitute is a legislative council redraft with additional sections added. Sections 1 and 2 are the same in both versions of the bill. Section 3 of the original bill has been moved to Section 14 of the substitute. Section 4 of the original bill has is now Sections 3 and 4 of the substitute. Sections 15, 16, and 17 of the substitute are the effective date, application of the act, and emergency clause which were inadvertently omitted from the original bill. Sections 5, 6, 7, 8, 9, 10, 11, 12, and 13 of the substitute are new sections which were not in the original SUMMARY OF COMMITTEE ACTION H.B. 2401 was considered by the Committee on Civil Practices during a public hearing on April 26, 1995. The following individuals testified in support of the bill: Alvin J. Golden, representing the Texas Academy of Probate and Trust Lawyers. No one testified in opposition to or neutrally on the bill. The committee considered a complete substitute, which was adopted without objection. The bill was left pending. H.B. 2401 was considered by the committee during a formal meeting on May 1, 1995. H.B. 2401 was reported favorably as substituted, with the recommendation that it do pass, be printed and be sent to the committee on Local and Consent Calendars, by a record vote of seven ayes, zero nays, zero pnv and two absent.