By Thompson H.B. No. 2401
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain estate, guardianship, and trust matters.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Sections 58(c) and (d), Texas Probate Code, are
1-5 amended to read as follows:
1-6 (c) A legacy of personal property does not include any
1-7 contents of the property unless the will directs that the contents
1-8 are included in the legacy. A devise of real property does not
1-9 include any personal property located on or associated with the
1-10 real property or any contents of personal property located on the
1-11 real property unless the will directs that the personal property or
1-12 contents are included in the devise.
1-13 (d) In this section:
1-14 (1) "Contents" means tangible personal property, other
1-15 than titled personal property, found inside of or on a specifically
1-16 bequeathed <bequested> or devised item. The term includes
1-17 clothing, pictures, furniture, coin collections, and other items of
1-18 tangible personal property that do not require a formal transfer of
1-19 title and <or> that are located in another item of tangible
1-20 personal property such as a cedar chest or other furniture <located
1-21 on real property>.
1-22 (2) "Titled personal property" includes all tangible
1-23 personal property represented by a certificate of title,
2-1 certificate of ownership, written label, marking, or designation
2-2 that signifies ownership by a person. The term includes a <stock
2-3 certificate,> motor vehicle, motor home, motorboat, or other
2-4 similar property that requires a formal transfer of title.
2-5 SECTION 2. Section 69(a), Texas Probate Code, is amended to
2-6 read as follows:
2-7 (a) If, after making a will, the testator is divorced or the
2-8 testator's marriage is annulled <after making a will>, all
2-9 provisions in the will in favor of the testator's former spouse <so
2-10 divorced>, or appointing such spouse to any fiduciary capacity
2-11 under the will or with respect to the estate or person of the
2-12 testator's children, shall be null and void and of no effect unless
2-13 the will expressly provides otherwise.
2-14 SECTION 3. Section 137, Texas Probate Code, is amended to
2-15 read as follows:
2-16 Sec. 137. Collection of Small Estates Upon Affidavit. (a)
2-17 The distributees of the <an> estate of a decedent who dies
2-18 intestate shall be entitled thereto, to the extent that the assets,
2-19 exclusive of homestead and exempt property, exceed the known
2-20 liabilities of said estate, exclusive of liabilities secured by
2-21 homestead and exempt property, without awaiting the appointment of
2-22 a personal representative when:
2-23 (1) No petition for the appointment of a personal
2-24 representative is pending or has been granted; and
2-25 (2) Thirty days have elapsed since the death of the
3-1 decedent; and
3-2 (3) The value of the entire assets of the estate, not
3-3 including homestead and exempt property, does not exceed $50,000;
3-4 and
3-5 (4) There is filed with the clerk of the court having
3-6 jurisdiction and venue an affidavit sworn to by two disinterested
3-7 witnesses, <and> by all such distributees that <as> have legal
3-8 capacity, and, if the facts warrant, by the natural guardian or
3-9 next of kin of any minor or incompetent who is also a distributee,
3-10 which affidavit shall be examined by the judge of the court having
3-11 jurisdiction and venue; and
3-12 (5) The affidavit shows <the judge may find, in his
3-13 discretion, that the affidavit conforms to the terms of this
3-14 section; if the judge approves the affidavit, the affidavit is to
3-15 be recorded as an official public record under Chapter 194, Local
3-16 Government Code, or if the county has not adopted a microfilm or
3-17 microphotographic process under Chapter 194, Local Government Code,
3-18 the affidavit must be recorded in "Small Estates" records by the
3-19 clerk, showing> the existence of the foregoing conditions and
3-20 includes <, including> a list of all of the known assets and
3-21 liabilities of the estate, the names and addresses of the
3-22 distributees, and the distributees' rights <their right> to receive
3-23 the money or property of the estate<,> or to have such evidences of
3-24 money, property, or other rights of the estate as are found to
3-25 exist transferred to them as<, being> heirs<, devisees,> or
4-1 assignees<, and listing all assets and known liabilities of the
4-2 estates>; and
4-3 (6) The judge, in the judge's discretion, finds that
4-4 the affidavit conforms to the terms of this section and approves
4-5 the affidavit; and
4-6 (7) <(5)> A copy of the <such> affidavit, certified to
4-7 by said clerk, is furnished by the distributees of the estate to
4-8 the person or persons owing money to the estate, having custody or
4-9 possession of property of the estate, or acting as registrar,
4-10 fiduciary or transfer agent of or for evidences of interest,
4-11 indebtedness, property, or other right belonging to the <said>
4-12 estate.
4-13 (b) This section does not affect the disposition of property
4-14 under the terms of a will or other testamentary document nor,
4-15 except as provided by Subsection (c) of this section, does it
4-16 transfer title to real property.
4-17 (c) Title to a decedent's homestead that is the only real
4-18 property in a decedent's estate may be transferred on an affidavit
4-19 that meets the requirements of this section. An affidavit that is
4-20 used to transfer title to a homestead under this section must be
4-21 recorded in the deed records of a county in which the homestead is
4-22 located. A bona fide purchaser for value may rely on a recorded
4-23 affidavit under this section. A bona fide purchaser for value
4-24 without actual or constructive notice of an heir who is not
4-25 disclosed in a recorded affidavit under this section acquires title
5-1 to a homestead free of the interests of the undisclosed heir, but
5-2 the bona fide purchaser remains subject to any <a> claim a creditor
5-3 of the decedent has <as provided> by law. A purchaser <person> has
5-4 constructive notice of <the rights of> an heir who is not disclosed
5-5 in a recorded affidavit under this section if an affidavit,
5-6 judgment of heirship, or title transaction in the chain of title in
5-7 the deed records identifies <states that> the heir of the decedent
5-8 who is not disclosed in the affidavit as <is> an heir of the
5-9 decedent. An heir who is not disclosed in a recorded affidavit
5-10 under this section may recover from an heir who receives
5-11 consideration from a purchaser in a transfer <to a bona fide
5-12 purchaser> for value of title to a homestead passing under the
5-13 affidavit.
5-14 (d) If the judge approves the affidavit under this section,
5-15 the affidavit is to be recorded as an official public record under
5-16 Chapter 194, Local Government Code. If the <The county clerk of
5-17 every> county <that> has not adopted a microfilm or
5-18 microphotographic process under Chapter 194, Local Government Code,
5-19 the county clerk shall provide and keep in his office an
5-20 appropriate book labeled "Small Estates," with an accurate index
5-21 showing the name of the decedent and reference to land, if any,
5-22 involved, in which he shall record every such affidavit so filed,
5-23 upon being paid his legal recording fee<, said index to show the
5-24 name of decedent and reference to land, if any, involved>.
5-25 SECTION 4. Section 138, Texas Probate Code, is amended to
6-1 read as follows:
6-2 Sec. 138. EFFECT OF AFFIDAVIT. The person making payment,
6-3 delivery, transfer or issuance pursuant to the affidavit described
6-4 in the preceding Section shall be released to the same extent as
6-5 if made to a personal representative of the decedent, and <he>
6-6 shall not be required to see to the application thereof or to
6-7 inquire into the truth of any statement in the affidavit, but the
6-8 distributees to whom payment, delivery, transfer, or issuance is
6-9 made shall be answerable therefor to any person having a prior
6-10 right and be accountable to any personal representative thereafter
6-11 appointed. In addition, the person or persons who execute the
6-12 affidavit shall be liable for any damage or loss to any person
6-13 which arises from any payment, delivery, transfer, or issuance made
6-14 in reliance on such affidavit. If the person to whom such
6-15 affidavit is delivered refuses to pay, deliver, transfer, or issue
6-16 the property as above provided, such property may be recovered in
6-17 an action brought for such purpose by or on behalf of the
6-18 distributees entitled thereto, upon proof of the facts required to
6-19 be stated in the affidavit.
6-20 SECTION 5. Section 151(a), Texas Probate Code, is amended to
6-21 read as follows:
6-22 (a) Filing of Affidavit. When all of the debts known to
6-23 exist against the estate have been paid, or when they have been
6-24 paid so far as the assets in the hands of the independent executor
6-25 will permit, when there is no pending litigation, and when the
7-1 independent executor has distributed to the persons entitled
7-2 thereto all assets of the estate, if any, remaining after payment
7-3 of debts, the independent executor may file with the court:
7-4 (1) a closing report verified by affidavit that shows:
7-5 (i) The property of the estate which came into
7-6 the hands of the independent executor;
7-7 (ii) The debts that have been paid;
7-8 (iii) The debts, if any, still owing by the
7-9 estate;
7-10 (iv) The property of the estate, if any,
7-11 remaining on hand after payment of debts; and
7-12 (v) The names and residences of the persons to
7-13 whom the property of the estate, if any, remaining on hand after
7-14 payment of debts has been distributed; and
7-15 (2) signed receipts or other proof of delivery of
7-16 property to the distributees named in the closing report if the
7-17 closing report reflects that there was property remaining on hand
7-18 after payment of debts.
7-19 SECTION 6. Section 520, Texas Probate Code, is amended to
7-20 read as follows:
7-21 Sec. 520. TIME TO FILE EMERGENCY APPLICATION. An applicant
7-22 may file an application requesting emergency intervention by a
7-23 court exercising probate jurisdiction to provide for the payment of
7-24 funeral and burial expenses or the protection and storage of
7-25 personal property owned by the decedent that was located in rented
8-1 accommodations on the date of the decedent's death with the clerk
8-2 of the court in the county of domicile of the decedent or the
8-3 county in which the rental accommodations that contain the
8-4 decedent's personal property are located. The application must be
8-5 filed not earlier than the third day after the date of the
8-6 decedent's death and not later than the 90th day after the date of
8-7 the decedent's death.
8-8 SECTION 7. Part 2, Chapter XII, Texas Probate Code, is
8-9 amended by adding Section 521A to read as follows:
8-10 Sec. 521A. REQUIREMENTS FOR EMERGENCY INTERVENTION. An
8-11 applicant may file an emergency application with the court under
8-12 Section 520 of this code only if an application has not been filed
8-13 and is not pending under Section 81, 82, 137, or 145 of this code
8-14 and the applicant:
8-15 (1) needs to obtain funds for the funeral and burial
8-16 of the decedent; or
8-17 (2) needs to gain access to rental accommodations in
8-18 which the decedent's personal property is located and the applicant
8-19 has been denied access to those accommodations.
8-20 SECTION 8. Section 522, Texas Probate Code, is amended to
8-21 read as follows:
8-22 Sec. 522. CONTENTS OF <REQUIREMENTS FOR> EMERGENCY
8-23 INTERVENTION APPLICATION FOR FUNERAL AND BURIAL EXPENSES. (a) An
8-24 application for emergency intervention to obtain funds needed for a
8-25 decedent's funeral and burial expenses must be sworn and must
9-1 contain:
9-2 (1) the name, address, social security number, and
9-3 interest of the applicant;
9-4 (2) the facts showing an immediate necessity for the
9-5 issuance of an emergency intervention order under this section by
9-6 the court;
9-7 (3) the date of the decedent's death, place of death,
9-8 decedent's residential address, and the name and address of the
9-9 funeral home holding the decedent's remains;
9-10 (4) any known or ascertainable heirs and devisees of
9-11 the decedent and the reason:
9-12 (A) the heirs and devisees cannot be contacted;
9-13 or
9-14 (B) the heirs and devisees have refused to
9-15 assist in the decedent's burial <or protection of the decedent's
9-16 personal property>;
9-17 (5) a description of funeral and burial procedures
9-18 necessary and a statement from the funeral home that contains a
9-19 detailed and itemized description of the cost of the funeral and
9-20 burial procedures; and
9-21 (6) the name and address of an individual, entity, or
9-22 financial institution, including an employer, that is in possession
9-23 of any funds of or due to the decedent, and related account numbers
9-24 and balances, if known by the applicant <the name, location, and
9-25 identification of property or persons in possession of the
10-1 decedent's property; and>
10-2 <(7) the name and address of the owner or manager of
10-3 the decedent's rented premises and whether access to the premises
10-4 is necessary>.
10-5 (b) The <If emergency intervention is necessary for funeral
10-6 and burial, the> application shall also state whether there are any
10-7 written instructions from the decedent relating to the type and
10-8 manner of <a> funeral or burial the decedent would like to have
10-9 <exist>. The applicant shall attach the instructions, if
10-10 available, to the application and shall <or file the instructions
10-11 before the funeral or burial and> fully comply with the
10-12 instructions. If written instructions do not exist, the applicant
10-13 may not permit the decedent's remains to be cremated <shall provide
10-14 for the funeral and burial of the decedent> unless the applicant
10-15 obtains the court's permission to cremate the decedent's remains.
10-16 SECTION 9. Part 2, Chapter XII, Texas Probate Code, is
10-17 amended by adding Section 522A to read as follows:
10-18 Sec. 522A. CONTENTS FOR EMERGENCY INTERVENTION APPLICATION
10-19 FOR ACCESS TO PERSONAL PROPERTY. An application for emergency
10-20 intervention to gain access to rental accommodations of a decedent
10-21 at the time of the decedent's death that contain the decedent's
10-22 personal property must be sworn and must contain:
10-23 (1) the name, address, social security number, and
10-24 interest of the applicant;
10-25 (2) the facts showing an immediate necessity for the
11-1 issuance of an emergency intervention order by the court;
11-2 (3) the date and place of the decedent's death, the
11-3 decedent's residential address, and the name and address of the
11-4 funeral home holding the decedent's remains;
11-5 (4) any known or ascertainable heirs and devisees of
11-6 the decedent and the reason:
11-7 (A) the heirs and devisees cannot be contacted;
11-8 or
11-9 (B) the heirs and devisees have refused to
11-10 assist in the protection of the decedent's personal property;
11-11 (5) the type and location of the decedent's personal
11-12 property and the name of the person in possession of the property;
11-13 and
11-14 (6) the name and address of the owner or manager of
11-15 the decedent's rental accommodations and whether access to the
11-16 accommodations is necessary.
11-17 SECTION 10. Section 523, Texas Probate Code, is amended to
11-18 read as follows:
11-19 Sec. 523. ORDERS OF EMERGENCY INTERVENTION. (a) If the
11-20 court determines on review of an <the> application filed under
11-21 Section 520 of this code that emergency intervention is necessary
11-22 to obtain funds needed for a decedent's funeral and burial
11-23 expenses, the court may order funds of the decedent held by an
11-24 employer, individual, or financial institution to be paid directly
11-25 to a funeral home only for reasonable and necessary attorney's fees
12-1 for the attorney who obtained the order granted under this section
12-2 and for funeral and burial expenses not to exceed $5,000 as ordered
12-3 by the court to provide the decedent with a reasonable, dignified,
12-4 and appropriate funeral and burial.
12-5 (b) If the court determines on review of an application
12-6 filed under Section 520 of this code that emergency intervention is
12-7 necessary to gain access to accommodations rented by the decedent
12-8 at the time of the decedent's death that contain the decedent's
12-9 personal property, the court may order one or more of the
12-10 following:
12-11 (1) the owner or agent of the rental accommodations
12-12 shall grant the applicant access to the accommodations at a
12-13 reasonable time and in the presence of the owner or agent;
12-14 (2) the applicant and owner or agent of the rental
12-15 accommodations shall jointly prepare and file with the court a list
12-16 that generally describes the decedent's property found at the
12-17 premises;
12-18 (3) the applicant or the owner or agent of the rental
12-19 accommodations may remove and store the decedent's property at
12-20 another location until claimed by the decedent's heirs; or
12-21 (4) the applicant has only the powers that are
12-22 specifically stated in the order and that are necessary to protect
12-23 the decedent's property that is the subject of the application.
12-24 (c) The court clerk may issue certified copies of an
12-25 emergency intervention order on request of the applicant only until
13-1 the 90th day after the date the order was signed <issued> or the
13-2 date a personal representative is qualified, whichever occurs
13-3 first.
13-4 (d) <(c)> A person who is furnished with a certified copy of
13-5 an emergency intervention order within the period described by
13-6 Subsection (c) <(b)> of this section is not personally liable for
13-7 the person's actions that are taken in accordance with and in
13-8 reliance on the order.
13-9 SECTION 11. Section 524, Texas Probate Code, is amended to
13-10 read as follows:
13-11 Sec. 524. TERMINATION. (a) All power and authority of an
13-12 applicant under an emergency intervention order cease to be
13-13 effective or enforceable on the 90th day after the date the order
13-14 was issued or on the date a personal representative is qualified,
13-15 whichever occurs first.
13-16 (b) If a personal representative has not been appointed when
13-17 an emergency intervention order issued under Section 523(b) of this
13-18 code ceases to be effective, a person who is in possession of the
13-19 decedent's personal property that is the subject of the order,
13-20 without incurring civil liability, may:
13-21 (1) release the property to the decedent's heirs; or
13-22 (2) dispose of the property under Subchapter C,
13-23 Chapter 54, Property Code, or Section 7.209 or 7.210, Business &
13-24 Commerce Code.
13-25 SECTION 12. Part 2, Chapter XII, Texas Probate Code, is
14-1 amended by adding Section 525 to read as follows:
14-2 Sec. 525. LIMITATION ON RIGHT OF SURVIVING SPOUSE TO CONTROL
14-3 DECEASED'S BURIAL OR CREMATION. (a) An application under this
14-4 section may be filed by:
14-5 (1) the executor of the deceased's will; or
14-6 (2) the next of kin of the deceased, the nearest in
14-7 order of descent first, and so on, and next of kin includes the
14-8 deceased's descendants who legally adopted the deceased or who have
14-9 been legally adopted by the deceased.
14-10 (b) An application under this section must be under oath and
14-11 must establish:
14-12 (1) whether the deceased died intestate or testate;
14-13 (2) the surviving spouse is alleged to be a principal
14-14 or accomplice in a wilful act which resulted in the death of the
14-15 deceased; and
14-16 (3) good cause exists to limit the right of the
14-17 surviving spouse to control the burial and interment or cremation
14-18 of the deceased spouse.
14-19 (c) After notice and hearing, without regard to whether the
14-20 deceased died intestate or testate, a court may limit the right of
14-21 a surviving spouse, whether or not the spouse has been designated
14-22 by the deceased's will as the executor of a deceased spouse's
14-23 estate, to control the burial and interment or cremation of the
14-24 deceased spouse if the court finds that there is good cause to
14-25 believe that the surviving spouse is the principal or an accomplice
15-1 in a wilful act which resulted in the death of the deceased spouse.
15-2 (d) If the court limits the surviving spouse's right of
15-3 control, as provided by Subsection (c), the court shall designate
15-4 and authorize a person to make burial or cremation arrangements.
15-5 SECTION 13. Section 702(b), Texas Probate Code, is amended
15-6 to read as follows:
15-7 (b) A bond is not required to be given by a guardian that
15-8 is:
15-9 (1) a corporate fiduciary, as defined by Section
15-10 601(5) of this code; or
15-11 (2) a guardianship program operated by a county with a
15-12 population of more than 2.5 million, according to the most recent
15-13 federal decennial census.
15-14 SECTION 14. Section 111.004(7), Property Code, is amended to
15-15 read as follows:
15-16 (7) "Interested person" means a trustee, beneficiary,
15-17 or any other person having an interest in or a claim against the
15-18 trust or any person who is affected by the administration of the
15-19 trust. Whether a person, excluding a trustee or named beneficiary,
15-20 is an interested person <This meaning, as it relates to particular
15-21 persons,> may vary from time to time and must be determined
15-22 according to the particular purposes of and matter involved in any
15-23 proceeding.
15-24 SECTION 15. Sections 113.111(a) and (b), Property Code, are
15-25 amended to read as follows:
16-1 (a) The following charges shall be made against income:
16-2 (1) ordinary expenses incurred in the administration,
16-3 management, or preservation of the trust property, including
16-4 regularly recurring taxes assessed against any portion of the
16-5 principal, water rates, premiums on insurance on the interests of
16-6 an income beneficiary, remainderman, or trustee, interest paid by
16-7 the trustee, and ordinary repairs;
16-8 (2) a reasonable allowance for depreciation on
16-9 improvements representing an addition of value to property held by
16-10 the trustee as part of the principal if the improvements are
16-11 subject to depreciation under generally accepted accounting
16-12 principles, but no allowance may be made for depreciation of the
16-13 portion of any real property used by a beneficiary as a residence
16-14 or for depreciation of any property held by the trustee on January
16-15 1, 1984, <the effective date of this subtitle> for which the
16-16 trustee was <is> not then making an allowance for depreciation;
16-17 (3) court costs and other fees on periodic judicial
16-18 accountings, unless the court directs otherwise;
16-19 (4) court costs, attorney's fees, and other fees on
16-20 other accounting or judicial proceedings if the matter primarily
16-21 concerns the income interest, unless the court directs otherwise;
16-22 (5) all expenses reasonably incurred by the trustee
16-23 for current management of principal and application of income;
16-24 (6) the portion of attorney's fees and the trustee's
16-25 compensation for services in the management and administration of
17-1 the trust estate, irrespective of the manner of computation, and
17-2 for extraordinary and unusual services, including remuneration of
17-3 the trustee for acceptance of the trust, distribution of the trust
17-4 properties, termination of the trust estate, and all other fees of
17-5 similar nature, as the trustee determines in its discretion to be
17-6 just and equitable; <and>
17-7 (7) a tax levied on proceeds defined as income under
17-8 this subchapter or the trust instrument that is payable by the
17-9 trustee; and
17-10 (8) regularly recurring charges payable from income to
17-11 the same extent and in the same manner that income is apportioned
17-12 under Section 113.103.
17-13 (b) The following charges shall be made against principal:
17-14 (1) the portion of the attorney's fees and the
17-15 trustee's compensation not charged to income under Subdivision (6)
17-16 of Subsection (a) of this section;
17-17 (2) expenses reasonably incurred in connection with
17-18 principal and court costs primarily concerning matters of
17-19 principal;
17-20 (3) charges not provided for in Subsection (a) of this
17-21 section, including the cost of investing and reinvesting principal,
17-22 the payments on principal of an indebtedness, including a mortgage
17-23 amortized by periodic payments of principal, expenses for
17-24 preparation of property for rental or sale, and, unless the court
17-25 directs otherwise, expenses incurred in maintaining or defending
18-1 any action to construe the trust, to protect the trust or the trust
18-2 property, or to assure the title of trust property;
18-3 (4) extraordinary repairs or expenses incurred in
18-4 making a capital improvement to principal, including special
18-5 assessments, but a trustee may establish an allowance for
18-6 depreciation out of income to the extent permitted by Subdivision
18-7 (2) of Subsection (a) of this section and by Section 113.106 of
18-8 this Act;
18-9 (5) a tax levied on profit, gain, or other proceeds
18-10 allocated to principal, notwithstanding characterization of the tax
18-11 as an income tax by the taxing authority; and
18-12 (6) if an estate tax, transfer tax, or inheritance tax
18-13 is levied in respect to a trust in which both an income beneficiary
18-14 and a remainderman have an interest, any amount apportioned to the
18-15 trust, including interest and penalties, even though the income
18-16 beneficiary also has rights in the principal<; and>
18-17 <(7) regularly recurring charges payable from income
18-18 to the same extent and in the same manner that income is
18-19 apportioned under Section 113.103 of this Act>.
18-20 SECTION 16. This Act takes effect September 1, 1995.
18-21 SECTION 17. (a) The changes in law made by Sections 1-11 of
18-22 this Act apply only to the estates of decedents who die on or after
18-23 September 1, 1995. The estates of decedents who die before the
18-24 effective date of this Act are governed by the law as it existed
18-25 immediately before the effective date of this Act, and that law is
19-1 continued in effect for that purpose.
19-2 (b) The change in law made by Section 14 of this Act applies
19-3 only to a trust created on or after the effective date of this Act.
19-4 A trust created before the effective date of this Act is governed
19-5 by the law then in effect, and the former law is continued for that
19-6 purpose.
19-7 SECTION 18. The importance of this legislation and the
19-8 crowded condition of the calendars in both houses create an
19-9 emergency and an imperative public necessity that the
19-10 constitutional rule requiring bills to be read on three several
19-11 days in each house be suspended, and this rule is hereby suspended.