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.