74R11454 MWV-F
By Thompson H.B. No. 2401
Substitute the following for H.B. No. 2401:
By Tillery C.S.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 368(b), Texas Probate Code, is amended to
7-20 read as follows:
7-21 (b) Action of the Court When Public Advertising Not
7-22 Required. At any time after the expiration of five (5) days after
7-23 <and prior to the expiration of ten (10) days from> the date of
7-24 filing and without an order setting time and place of hearing, the
7-25 court shall hear the application to lease at private sale and shall
8-1 inquire into the manner in which the proposed lease has been or
8-2 will be made, and shall hear evidence for or against the same; and,
8-3 if satisfied that the lease has been or will be made for a fair and
8-4 sufficient consideration and on fair terms, and has been or will be
8-5 properly made in conformity with law, the court shall enter an
8-6 order authorizing the execution of such lease without the necessity
8-7 of advertising, notice, or citation, said order complying in all
8-8 other respects with the requirements essential to the validity of
8-9 mineral leases as hereinabove set out, as if advertising or notice
8-10 were required. No order confirming a lease or leases made at
8-11 private sale need be issued, but no such lease shall be valid until
8-12 the increased or additional bond required by the court, if any, has
8-13 been approved by the court and filed with the clerk of the court.
8-14 SECTION 7. Section 520, Texas Probate Code, is amended to
8-15 read as follows:
8-16 Sec. 520. TIME TO FILE EMERGENCY APPLICATION. An applicant
8-17 may file an application requesting emergency intervention by a
8-18 court exercising probate jurisdiction to provide for the payment of
8-19 funeral and burial expenses or the protection and storage of
8-20 personal property owned by the decedent that was located in rented
8-21 accommodations on the date of the decedent's death with the clerk
8-22 of the court in the county of domicile of the decedent or the
8-23 county in which the rental accommodations that contain the
8-24 decedent's personal property are located. The application must be
8-25 filed not earlier than the third day after the date of the
9-1 decedent's death and not later than the 90th day after the date of
9-2 the decedent's death.
9-3 SECTION 8. Part 2, Chapter XII, Texas Probate Code, is
9-4 amended by adding Section 521A to read as follows:
9-5 Sec. 521A. REQUIREMENTS FOR EMERGENCY INTERVENTION. An
9-6 applicant may file an emergency application with the court under
9-7 Section 520 of this code only if an application has not been filed
9-8 and is not pending under Section 81, 82, 137, or 145 of this code
9-9 and the applicant:
9-10 (1) needs to obtain funds for the funeral and burial
9-11 of the decedent; or
9-12 (2) needs to gain access to rental accommodations in
9-13 which the decedent's personal property is located and the applicant
9-14 has been denied access to those accommodations.
9-15 SECTION 9. Section 522, Texas Probate Code, is amended to
9-16 read as follows:
9-17 Sec. 522. CONTENTS OF <REQUIREMENTS FOR> EMERGENCY
9-18 INTERVENTION APPLICATION FOR FUNERAL AND BURIAL EXPENSES. (a) An
9-19 application for emergency intervention to obtain funds needed for a
9-20 decedent's funeral and burial expenses must be sworn and must
9-21 contain:
9-22 (1) the name, address, social security number, and
9-23 interest of the applicant;
9-24 (2) the facts showing an immediate necessity for the
9-25 issuance of an emergency intervention order under this section by
10-1 the court;
10-2 (3) the date of the decedent's death, place of death,
10-3 decedent's residential address, and the name and address of the
10-4 funeral home holding the decedent's remains;
10-5 (4) any known or ascertainable heirs and devisees of
10-6 the decedent and the reason:
10-7 (A) the heirs and devisees cannot be contacted;
10-8 or
10-9 (B) the heirs and devisees have refused to
10-10 assist in the decedent's burial <or protection of the decedent's
10-11 personal property>;
10-12 (5) a description of funeral and burial procedures
10-13 necessary and a statement from the funeral home that contains a
10-14 detailed and itemized description of the cost of the funeral and
10-15 burial procedures; and
10-16 (6) the name and address of an individual, entity, or
10-17 financial institution, including an employer, that is in possession
10-18 of any funds of or due to the decedent, and related account numbers
10-19 and balances, if known by the applicant <the name, location, and
10-20 identification of property or persons in possession of the
10-21 decedent's property; and>
10-22 <(7) the name and address of the owner or manager of
10-23 the decedent's rented premises and whether access to the premises
10-24 is necessary>.
10-25 (b) The <If emergency intervention is necessary for funeral
11-1 and burial, the> application shall also state whether there are any
11-2 written instructions from the decedent relating to the type and
11-3 manner of <a> funeral or burial the decedent would like to have
11-4 <exist>. The applicant shall attach the instructions, if
11-5 available, to the application and shall <or file the instructions
11-6 before the funeral or burial and> fully comply with the
11-7 instructions. If written instructions do not exist, the applicant
11-8 may not permit the decedent's remains to be cremated <shall provide
11-9 for the funeral and burial of the decedent> unless the applicant
11-10 obtains the court's permission to cremate the decedent's remains.
11-11 SECTION 10. Part 2, Chapter XII, Texas Probate Code, is
11-12 amended by adding Section 522A to read as follows:
11-13 Sec. 522A. CONTENTS FOR EMERGENCY INTERVENTION APPLICATION
11-14 FOR ACCESS TO PERSONAL PROPERTY. An application for emergency
11-15 intervention to gain access to rental accommodations of a decedent
11-16 at the time of the decedent's death that contain the decedent's
11-17 personal property must be sworn and must contain:
11-18 (1) the name, address, social security number, and
11-19 interest of the applicant;
11-20 (2) the facts showing an immediate necessity for the
11-21 issuance of an emergency intervention order by the court;
11-22 (3) the date and place of the decedent's death, the
11-23 decedent's residential address, and the name and address of the
11-24 funeral home holding the decedent's remains;
11-25 (4) any known or ascertainable heirs and devisees of
12-1 the decedent and the reason:
12-2 (A) the heirs and devisees cannot be contacted;
12-3 or
12-4 (B) the heirs and devisees have refused to
12-5 assist in the protection of the decedent's personal property;
12-6 (5) the type and location of the decedent's personal
12-7 property and the name of the person in possession of the property;
12-8 and
12-9 (6) the name and address of the owner or manager of
12-10 the decedent's rental accommodations and whether access to the
12-11 accommodations is necessary.
12-12 SECTION 11. Section 523, Texas Probate Code, is amended to
12-13 read as follows:
12-14 Sec. 523. ORDERS OF EMERGENCY INTERVENTION. (a) If the
12-15 court determines on review of an <the> application filed under
12-16 Section 520 of this code that emergency intervention is necessary
12-17 to obtain funds needed for a decedent's funeral and burial
12-18 expenses, the court may order funds of the decedent held by an
12-19 employer, individual, or financial institution to be paid directly
12-20 to a funeral home only for reasonable and necessary attorney's fees
12-21 for the attorney who obtained the order granted under this section
12-22 and for funeral and burial expenses not to exceed $5,000 as ordered
12-23 by the court to provide the decedent with a reasonable, dignified,
12-24 and appropriate funeral and burial.
12-25 (b) If the court determines on review of an application
13-1 filed under Section 520 of this code that emergency intervention is
13-2 necessary to gain access to accommodations rented by the decedent
13-3 at the time of the decedent's death that contain the decedent's
13-4 personal property, the court may order one or more of the
13-5 following:
13-6 (1) the owner or agent of the rental accommodations
13-7 shall grant the applicant access to the accommodations at a
13-8 reasonable time and in the presence of the owner or agent;
13-9 (2) the applicant and owner or agent of the rental
13-10 accommodations shall jointly prepare and file with the court a list
13-11 that generally describes the decedent's property found at the
13-12 premises;
13-13 (3) the applicant or the owner or agent of the rental
13-14 accommodations may remove and store the decedent's property at
13-15 another location until claimed by the decedent's heirs; or
13-16 (4) the applicant has only the powers that are
13-17 specifically stated in the order and that are necessary to protect
13-18 the decedent's property that is the subject of the application.
13-19 (c) The court clerk may issue certified copies of an
13-20 emergency intervention order on request of the applicant only until
13-21 the 90th day after the date the order was signed <issued> or the
13-22 date a personal representative is qualified, whichever occurs
13-23 first.
13-24 (d) <(c)> A person who is furnished with a certified copy of
13-25 an emergency intervention order within the period described by
14-1 Subsection (c) <(b)> of this section is not personally liable for
14-2 the person's actions that are taken in accordance with and in
14-3 reliance on the order.
14-4 SECTION 12. Section 524, Texas Probate Code, is amended to
14-5 read as follows:
14-6 Sec. 524. TERMINATION. (a) All power and authority of an
14-7 applicant under an emergency intervention order cease to be
14-8 effective or enforceable on the 90th day after the date the order
14-9 was issued or on the date a personal representative is qualified,
14-10 whichever occurs first.
14-11 (b) If a personal representative has not been appointed when
14-12 an emergency intervention order issued under Section 523(b) of this
14-13 code ceases to be effective, a person who is in possession of the
14-14 decedent's personal property that is the subject of the order,
14-15 without incurring civil liability, may:
14-16 (1) release the property to the decedent's heirs; or
14-17 (2) dispose of the property under Subchapter C,
14-18 Chapter 54, Property Code, or Section 7.209 or 7.210, Business &
14-19 Commerce Code.
14-20 SECTION 13. Section 702(b), Texas Probate Code, is amended
14-21 to read as follows:
14-22 (b) A bond is not required to be given by a guardian that
14-23 is:
14-24 (1) a corporate fiduciary, as defined by Section
14-25 601(5) of this code; or
15-1 (2) a guardianship program operated by a county with a
15-2 population of more than 2.5 million, according to the most recent
15-3 federal decennial census.
15-4 SECTION 14. Sections 113.111(a) and (b), Property Code, are
15-5 amended to read as follows:
15-6 (a) The following charges shall be made against income:
15-7 (1) ordinary expenses incurred in the administration,
15-8 management, or preservation of the trust property, including
15-9 regularly recurring taxes assessed against any portion of the
15-10 principal, water rates, premiums on insurance on the interests of
15-11 an income beneficiary, remainderman, or trustee, interest paid by
15-12 the trustee, and ordinary repairs;
15-13 (2) a reasonable allowance for depreciation on
15-14 improvements representing an addition of value to property held by
15-15 the trustee as part of the principal if the improvements are
15-16 subject to depreciation under generally accepted accounting
15-17 principles, but no allowance may be made for depreciation of the
15-18 portion of any real property used by a beneficiary as a residence
15-19 or for depreciation of any property held by the trustee on January
15-20 1, 1984, <the effective date of this subtitle> for which the
15-21 trustee was <is> not then making an allowance for depreciation;
15-22 (3) court costs and other fees on periodic judicial
15-23 accountings, unless the court directs otherwise;
15-24 (4) court costs, attorney's fees, and other fees on
15-25 other accounting or judicial proceedings if the matter primarily
16-1 concerns the income interest, unless the court directs otherwise;
16-2 (5) all expenses reasonably incurred by the trustee
16-3 for current management of principal and application of income;
16-4 (6) the portion of attorney's fees and the trustee's
16-5 compensation for services in the management and administration of
16-6 the trust estate, irrespective of the manner of computation, and
16-7 for extraordinary and unusual services, including remuneration of
16-8 the trustee for acceptance of the trust, distribution of the trust
16-9 properties, termination of the trust estate, and all other fees of
16-10 similar nature, as the trustee determines in its discretion to be
16-11 just and equitable; <and>
16-12 (7) a tax levied on proceeds defined as income under
16-13 this subchapter or the trust instrument that is payable by the
16-14 trustee; and
16-15 (8) regularly recurring charges payable from income to
16-16 the same extent and in the same manner that income is apportioned
16-17 under Section 113.103.
16-18 (b) The following charges shall be made against principal:
16-19 (1) the portion of the attorney's fees and the
16-20 trustee's compensation not charged to income under Subdivision (6)
16-21 of Subsection (a) of this section;
16-22 (2) expenses reasonably incurred in connection with
16-23 principal and court costs primarily concerning matters of
16-24 principal;
16-25 (3) charges not provided for in Subsection (a) of this
17-1 section, including the cost of investing and reinvesting principal,
17-2 the payments on principal of an indebtedness, including a mortgage
17-3 amortized by periodic payments of principal, expenses for
17-4 preparation of property for rental or sale, and, unless the court
17-5 directs otherwise, expenses incurred in maintaining or defending
17-6 any action to construe the trust, to protect the trust or the trust
17-7 property, or to assure the title of trust property;
17-8 (4) extraordinary repairs or expenses incurred in
17-9 making a capital improvement to principal, including special
17-10 assessments, but a trustee may establish an allowance for
17-11 depreciation out of income to the extent permitted by Subdivision
17-12 (2) of Subsection (a) of this section and by Section 113.106 of
17-13 this Act;
17-14 (5) a tax levied on profit, gain, or other proceeds
17-15 allocated to principal, notwithstanding characterization of the tax
17-16 as an income tax by the taxing authority; and
17-17 (6) if an estate tax, transfer tax, or inheritance tax
17-18 is levied in respect to a trust in which both an income beneficiary
17-19 and a remainderman have an interest, any amount apportioned to the
17-20 trust, including interest and penalties, even though the income
17-21 beneficiary also has rights in the principal<; and>
17-22 <(7) regularly recurring charges payable from income
17-23 to the same extent and in the same manner that income is
17-24 apportioned under Section 113.103 of this Act>.
17-25 SECTION 15. This Act takes effect September 1, 1995.
18-1 SECTION 16. (a) The changes in law made by Sections 1-12 of
18-2 this Act apply only to the estates of decedents who die on or after
18-3 September 1, 1995. The estates of decedents who die before the
18-4 effective date of this Act are governed by the law as it existed
18-5 immediately before the effective date of this Act, and that law is
18-6 continued in effect for that purpose.
18-7 (b) The change in law made by Section 14 of this Act applies
18-8 only to a trust created on or after the effective date of this Act.
18-9 A trust created before the effective date of this Act is governed
18-10 by the law then in effect, and the former law is continued for that
18-11 purpose.
18-12 SECTION 17. The importance of this legislation and the
18-13 crowded condition of the calendars in both houses create an
18-14 emergency and an imperative public necessity that the
18-15 constitutional rule requiring bills to be read on three several
18-16 days in each house be suspended, and this rule is hereby suspended.