1-1 By: Thompson (Senate Sponsor - Harris) H.B. No. 2401
1-2 (In the Senate - Received from the House May 11, 1995;
1-3 May 12, 1995, read first time and referred to Committee on
1-4 Jurisprudence; May 16, 1995, reported favorably by the following
1-5 vote: Yeas 7, Nays 0; May 16, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to certain estate, guardianship, and trust matters.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Sections 58(c) and (d), Texas Probate Code, are
1-11 amended to read as follows:
1-12 (c) A legacy of personal property does not include any
1-13 contents of the property unless the will directs that the contents
1-14 are included in the legacy. A devise of real property does not
1-15 include any personal property located on or associated with the
1-16 real property or any contents of personal property located on the
1-17 real property unless the will directs that the personal property or
1-18 contents are included in the devise.
1-19 (d) In this section:
1-20 (1) "Contents" means tangible personal property, other
1-21 than titled personal property, found inside of or on a specifically
1-22 bequeathed <bequested> or devised item. The term includes
1-23 clothing, pictures, furniture, coin collections, and other items of
1-24 tangible personal property that do not require a formal transfer of
1-25 title and <or> that are located in another item of tangible
1-26 personal property such as a cedar chest or other furniture <located
1-27 on real property>.
1-28 (2) "Titled personal property" includes all tangible
1-29 personal property represented by a certificate of title,
1-30 certificate of ownership, written label, marking, or designation
1-31 that signifies ownership by a person. The term includes a <stock
1-32 certificate,> motor vehicle, motor home, motorboat, or other
1-33 similar property that requires a formal transfer of title.
1-34 SECTION 2. Section 69(a), Texas Probate Code, is amended to
1-35 read as follows:
1-36 (a) If, after making a will, the testator is divorced or the
1-37 testator's marriage is annulled <after making a will>, all
1-38 provisions in the will in favor of the testator's former spouse <so
1-39 divorced>, or appointing such spouse to any fiduciary capacity
1-40 under the will or with respect to the estate or person of the
1-41 testator's children, shall be null and void and of no effect unless
1-42 the will expressly provides otherwise.
1-43 SECTION 3. Section 137, Texas Probate Code, is amended to
1-44 read as follows:
1-45 Sec. 137. Collection of Small Estates Upon Affidavit. (a)
1-46 The distributees of the <an> estate of a decedent who dies
1-47 intestate shall be entitled thereto, to the extent that the assets,
1-48 exclusive of homestead and exempt property, exceed the known
1-49 liabilities of said estate, exclusive of liabilities secured by
1-50 homestead and exempt property, without awaiting the appointment of
1-51 a personal representative when:
1-52 (1) No petition for the appointment of a personal
1-53 representative is pending or has been granted; and
1-54 (2) Thirty days have elapsed since the death of the
1-55 decedent; and
1-56 (3) The value of the entire assets of the estate, not
1-57 including homestead and exempt property, does not exceed $50,000;
1-58 and
1-59 (4) There is filed with the clerk of the court having
1-60 jurisdiction and venue an affidavit sworn to by two disinterested
1-61 witnesses, <and> by all such distributees that <as> have legal
1-62 capacity, and, if the facts warrant, by the natural guardian or
1-63 next of kin of any minor or incompetent who is also a distributee,
1-64 which affidavit shall be examined by the judge of the court having
1-65 jurisdiction and venue; and
1-66 (5) The affidavit shows <the judge may find, in his
1-67 discretion, that the affidavit conforms to the terms of this
1-68 section; if the judge approves the affidavit, the affidavit is to
2-1 be recorded as an official public record under Chapter 194, Local
2-2 Government Code, or if the county has not adopted a microfilm or
2-3 microphotographic process under Chapter 194, Local Government Code,
2-4 the affidavit must be recorded in "Small Estates" records by the
2-5 clerk, showing> the existence of the foregoing conditions and
2-6 includes <, including> a list of all of the known assets and
2-7 liabilities of the estate, the names and addresses of the
2-8 distributees, and the distributees' rights <their right> to receive
2-9 the money or property of the estate<,> or to have such evidences of
2-10 money, property, or other rights of the estate as are found to
2-11 exist transferred to them as<, being> heirs<, devisees,> or
2-12 assignees<, and listing all assets and known liabilities of the
2-13 estates>; and
2-14 (6) The judge, in the judge's discretion, finds that
2-15 the affidavit conforms to the terms of this section and approves
2-16 the affidavit; and
2-17 (7) <(5)> A copy of the <such> affidavit, certified to
2-18 by said clerk, is furnished by the distributees of the estate to
2-19 the person or persons owing money to the estate, having custody or
2-20 possession of property of the estate, or acting as registrar,
2-21 fiduciary or transfer agent of or for evidences of interest,
2-22 indebtedness, property, or other right belonging to the <said>
2-23 estate.
2-24 (b) This section does not affect the disposition of property
2-25 under the terms of a will or other testamentary document nor,
2-26 except as provided by Subsection (c) of this section, does it
2-27 transfer title to real property.
2-28 (c) Title to a decedent's homestead that is the only real
2-29 property in a decedent's estate may be transferred on an affidavit
2-30 that meets the requirements of this section. An affidavit that is
2-31 used to transfer title to a homestead under this section must be
2-32 recorded in the deed records of a county in which the homestead is
2-33 located. A bona fide purchaser for value may rely on a recorded
2-34 affidavit under this section. A bona fide purchaser for value
2-35 without actual or constructive notice of an heir who is not
2-36 disclosed in a recorded affidavit under this section acquires title
2-37 to a homestead free of the interests of the undisclosed heir, but
2-38 the bona fide purchaser remains subject to any <a> claim a creditor
2-39 of the decedent has <as provided> by law. A purchaser <person> has
2-40 constructive notice of <the rights of> an heir who is not disclosed
2-41 in a recorded affidavit under this section if an affidavit,
2-42 judgment of heirship, or title transaction in the chain of title in
2-43 the deed records identifies <states that> the heir of the decedent
2-44 who is not disclosed in the affidavit as <is> an heir of the
2-45 decedent. An heir who is not disclosed in a recorded affidavit
2-46 under this section may recover from an heir who receives
2-47 consideration from a purchaser in a transfer <to a bona fide
2-48 purchaser> for value of title to a homestead passing under the
2-49 affidavit.
2-50 (d) If the judge approves the affidavit under this section,
2-51 the affidavit is to be recorded as an official public record under
2-52 Chapter 194, Local Government Code. If the <The county clerk of
2-53 every> county <that> has not adopted a microfilm or
2-54 microphotographic process under Chapter 194, Local Government Code,
2-55 the county clerk shall provide and keep in his office an
2-56 appropriate book labeled "Small Estates," with an accurate index
2-57 showing the name of the decedent and reference to land, if any,
2-58 involved, in which he shall record every such affidavit so filed,
2-59 upon being paid his legal recording fee<, said index to show the
2-60 name of decedent and reference to land, if any, involved>.
2-61 SECTION 4. Section 138, Texas Probate Code, is amended to
2-62 read as follows:
2-63 Sec. 138. EFFECT OF AFFIDAVIT. The person making payment,
2-64 delivery, transfer or issuance pursuant to the affidavit described
2-65 in the preceding Section shall be released to the same extent as
2-66 if made to a personal representative of the decedent, and <he>
2-67 shall not be required to see to the application thereof or to
2-68 inquire into the truth of any statement in the affidavit, but the
2-69 distributees to whom payment, delivery, transfer, or issuance is
2-70 made shall be answerable therefor to any person having a prior
3-1 right and be accountable to any personal representative thereafter
3-2 appointed. In addition, the person or persons who execute the
3-3 affidavit shall be liable for any damage or loss to any person
3-4 which arises from any payment, delivery, transfer, or issuance made
3-5 in reliance on such affidavit. If the person to whom such
3-6 affidavit is delivered refuses to pay, deliver, transfer, or issue
3-7 the property as above provided, such property may be recovered in
3-8 an action brought for such purpose by or on behalf of the
3-9 distributees entitled thereto, upon proof of the facts required to
3-10 be stated in the affidavit.
3-11 SECTION 5. Section 151(a), Texas Probate Code, is amended to
3-12 read as follows:
3-13 (a) Filing of Affidavit. When all of the debts known to
3-14 exist against the estate have been paid, or when they have been
3-15 paid so far as the assets in the hands of the independent executor
3-16 will permit, when there is no pending litigation, and when the
3-17 independent executor has distributed to the persons entitled
3-18 thereto all assets of the estate, if any, remaining after payment
3-19 of debts, the independent executor may file with the court:
3-20 (1) a closing report verified by affidavit that shows:
3-21 (i) The property of the estate which came into
3-22 the hands of the independent executor;
3-23 (ii) The debts that have been paid;
3-24 (iii) The debts, if any, still owing by the
3-25 estate;
3-26 (iv) The property of the estate, if any,
3-27 remaining on hand after payment of debts; and
3-28 (v) The names and residences of the persons to
3-29 whom the property of the estate, if any, remaining on hand after
3-30 payment of debts has been distributed; and
3-31 (2) signed receipts or other proof of delivery of
3-32 property to the distributees named in the closing report if the
3-33 closing report reflects that there was property remaining on hand
3-34 after payment of debts.
3-35 SECTION 6. Section 520, Texas Probate Code, is amended to
3-36 read as follows:
3-37 Sec. 520. TIME TO FILE EMERGENCY APPLICATION. An applicant
3-38 may file an application requesting emergency intervention by a
3-39 court exercising probate jurisdiction to provide for the payment of
3-40 funeral and burial expenses or the protection and storage of
3-41 personal property owned by the decedent that was located in rented
3-42 accommodations on the date of the decedent's death with the clerk
3-43 of the court in the county of domicile of the decedent or the
3-44 county in which the rental accommodations that contain the
3-45 decedent's personal property are located. The application must be
3-46 filed not earlier than the third day after the date of the
3-47 decedent's death and not later than the 90th day after the date of
3-48 the decedent's death.
3-49 SECTION 7. Part 2, Chapter XII, Texas Probate Code, is
3-50 amended by adding Section 521A to read as follows:
3-51 Sec. 521A. REQUIREMENTS FOR EMERGENCY INTERVENTION. An
3-52 applicant may file an emergency application with the court under
3-53 Section 520 of this code only if an application has not been filed
3-54 and is not pending under Section 81, 82, 137, or 145 of this code
3-55 and the applicant:
3-56 (1) needs to obtain funds for the funeral and burial
3-57 of the decedent; or
3-58 (2) needs to gain access to rental accommodations in
3-59 which the decedent's personal property is located and the applicant
3-60 has been denied access to those accommodations.
3-61 SECTION 8. Section 522, Texas Probate Code, is amended to
3-62 read as follows:
3-63 Sec. 522. CONTENTS OF <REQUIREMENTS FOR> EMERGENCY
3-64 INTERVENTION APPLICATION FOR FUNERAL AND BURIAL EXPENSES. (a) An
3-65 application for emergency intervention to obtain funds needed for a
3-66 decedent's funeral and burial expenses must be sworn and must
3-67 contain:
3-68 (1) the name, address, social security number, and
3-69 interest of the applicant;
3-70 (2) the facts showing an immediate necessity for the
4-1 issuance of an emergency intervention order under this section by
4-2 the court;
4-3 (3) the date of the decedent's death, place of death,
4-4 decedent's residential address, and the name and address of the
4-5 funeral home holding the decedent's remains;
4-6 (4) any known or ascertainable heirs and devisees of
4-7 the decedent and the reason:
4-8 (A) the heirs and devisees cannot be contacted;
4-9 or
4-10 (B) the heirs and devisees have refused to
4-11 assist in the decedent's burial <or protection of the decedent's
4-12 personal property>;
4-13 (5) a description of funeral and burial procedures
4-14 necessary and a statement from the funeral home that contains a
4-15 detailed and itemized description of the cost of the funeral and
4-16 burial procedures; and
4-17 (6) the name and address of an individual, entity, or
4-18 financial institution, including an employer, that is in possession
4-19 of any funds of or due to the decedent, and related account numbers
4-20 and balances, if known by the applicant <the name, location, and
4-21 identification of property or persons in possession of the
4-22 decedent's property; and>
4-23 <(7) the name and address of the owner or manager of
4-24 the decedent's rented premises and whether access to the premises
4-25 is necessary>.
4-26 (b) The <If emergency intervention is necessary for funeral
4-27 and burial, the> application shall also state whether there are any
4-28 written instructions from the decedent relating to the type and
4-29 manner of <a> funeral or burial the decedent would like to have
4-30 <exist>. The applicant shall attach the instructions, if
4-31 available, to the application and shall <or file the instructions
4-32 before the funeral or burial and> fully comply with the
4-33 instructions. If written instructions do not exist, the applicant
4-34 may not permit the decedent's remains to be cremated <shall provide
4-35 for the funeral and burial of the decedent> unless the applicant
4-36 obtains the court's permission to cremate the decedent's remains.
4-37 SECTION 9. Part 2, Chapter XII, Texas Probate Code, is
4-38 amended by adding Section 522A to read as follows:
4-39 Sec. 522A. CONTENTS FOR EMERGENCY INTERVENTION APPLICATION
4-40 FOR ACCESS TO PERSONAL PROPERTY. An application for emergency
4-41 intervention to gain access to rental accommodations of a decedent
4-42 at the time of the decedent's death that contain the decedent's
4-43 personal property must be sworn and must contain:
4-44 (1) the name, address, social security number, and
4-45 interest of the applicant;
4-46 (2) the facts showing an immediate necessity for the
4-47 issuance of an emergency intervention order by the court;
4-48 (3) the date and place of the decedent's death, the
4-49 decedent's residential address, and the name and address of the
4-50 funeral home holding the decedent's remains;
4-51 (4) any known or ascertainable heirs and devisees of
4-52 the decedent and the reason:
4-53 (A) the heirs and devisees cannot be contacted;
4-54 or
4-55 (B) the heirs and devisees have refused to
4-56 assist in the protection of the decedent's personal property;
4-57 (5) the type and location of the decedent's personal
4-58 property and the name of the person in possession of the property;
4-59 and
4-60 (6) the name and address of the owner or manager of
4-61 the decedent's rental accommodations and whether access to the
4-62 accommodations is necessary.
4-63 SECTION 10. Section 523, Texas Probate Code, is amended to
4-64 read as follows:
4-65 Sec. 523. ORDERS OF EMERGENCY INTERVENTION. (a) If the
4-66 court determines on review of an <the> application filed under
4-67 Section 520 of this code that emergency intervention is necessary
4-68 to obtain funds needed for a decedent's funeral and burial
4-69 expenses, the court may order funds of the decedent held by an
4-70 employer, individual, or financial institution to be paid directly
5-1 to a funeral home only for reasonable and necessary attorney's fees
5-2 for the attorney who obtained the order granted under this section
5-3 and for funeral and burial expenses not to exceed $5,000 as ordered
5-4 by the court to provide the decedent with a reasonable, dignified,
5-5 and appropriate funeral and burial.
5-6 (b) If the court determines on review of an application
5-7 filed under Section 520 of this code that emergency intervention is
5-8 necessary to gain access to accommodations rented by the decedent
5-9 at the time of the decedent's death that contain the decedent's
5-10 personal property, the court may order one or more of the
5-11 following:
5-12 (1) the owner or agent of the rental accommodations
5-13 shall grant the applicant access to the accommodations at a
5-14 reasonable time and in the presence of the owner or agent;
5-15 (2) the applicant and owner or agent of the rental
5-16 accommodations shall jointly prepare and file with the court a list
5-17 that generally describes the decedent's property found at the
5-18 premises;
5-19 (3) the applicant or the owner or agent of the rental
5-20 accommodations may remove and store the decedent's property at
5-21 another location until claimed by the decedent's heirs; or
5-22 (4) the applicant has only the powers that are
5-23 specifically stated in the order and that are necessary to protect
5-24 the decedent's property that is the subject of the application.
5-25 (c) The court clerk may issue certified copies of an
5-26 emergency intervention order on request of the applicant only until
5-27 the 90th day after the date the order was signed <issued> or the
5-28 date a personal representative is qualified, whichever occurs
5-29 first.
5-30 (d) <(c)> A person who is furnished with a certified copy of
5-31 an emergency intervention order within the period described by
5-32 Subsection (c) <(b)> of this section is not personally liable for
5-33 the person's actions that are taken in accordance with and in
5-34 reliance on the order.
5-35 SECTION 11. Section 524, Texas Probate Code, is amended to
5-36 read as follows:
5-37 Sec. 524. TERMINATION. (a) All power and authority of an
5-38 applicant under an emergency intervention order cease to be
5-39 effective or enforceable on the 90th day after the date the order
5-40 was issued or on the date a personal representative is qualified,
5-41 whichever occurs first.
5-42 (b) If a personal representative has not been appointed when
5-43 an emergency intervention order issued under Section 523(b) of this
5-44 code ceases to be effective, a person who is in possession of the
5-45 decedent's personal property that is the subject of the order,
5-46 without incurring civil liability, may:
5-47 (1) release the property to the decedent's heirs; or
5-48 (2) dispose of the property under Subchapter C,
5-49 Chapter 54, Property Code, or Section 7.209 or 7.210, Business &
5-50 Commerce Code.
5-51 SECTION 12. Part 2, Chapter XII, Texas Probate Code, is
5-52 amended by adding Section 525 to read as follows:
5-53 Sec. 525. LIMITATION ON RIGHT OF SURVIVING SPOUSE TO CONTROL
5-54 DECEASED'S BURIAL OR CREMATION. (a) An application under this
5-55 section may be filed by:
5-56 (1) the executor of the deceased's will; or
5-57 (2) the next of kin of the deceased, the nearest in
5-58 order of descent first, and so on, and next of kin includes the
5-59 deceased's descendants who legally adopted the deceased or who have
5-60 been legally adopted by the deceased.
5-61 (b) An application under this section must be under oath and
5-62 must establish:
5-63 (1) whether the deceased died intestate or testate;
5-64 (2) the surviving spouse is alleged to be a principal
5-65 or accomplice in a wilful act which resulted in the death of the
5-66 deceased; and
5-67 (3) good cause exists to limit the right of the
5-68 surviving spouse to control the burial and interment or cremation
5-69 of the deceased spouse.
5-70 (c) After notice and hearing, without regard to whether the
6-1 deceased died intestate or testate, a court may limit the right of
6-2 a surviving spouse, whether or not the spouse has been designated
6-3 by the deceased's will as the executor of a deceased spouse's
6-4 estate, to control the burial and interment or cremation of the
6-5 deceased spouse if the court finds that there is good cause to
6-6 believe that the surviving spouse is the principal or an accomplice
6-7 in a wilful act which resulted in the death of the deceased spouse.
6-8 (d) If the court limits the surviving spouse's right of
6-9 control, as provided by Subsection (c), the court shall designate
6-10 and authorize a person to make burial or cremation arrangements.
6-11 SECTION 13. Section 702(b), Texas Probate Code, is amended
6-12 to read as follows:
6-13 (b) A bond is not required to be given by a guardian that
6-14 is:
6-15 (1) a corporate fiduciary, as defined by Section
6-16 601(5) of this code; or
6-17 (2) a guardianship program operated by a county with a
6-18 population of more than 2.5 million, according to the most recent
6-19 federal decennial census.
6-20 SECTION 14. Section 111.004(7), Property Code, is amended to
6-21 read as follows:
6-22 (7) "Interested person" means a trustee, beneficiary,
6-23 or any other person having an interest in or a claim against the
6-24 trust or any person who is affected by the administration of the
6-25 trust. Whether a person, excluding a trustee or named beneficiary,
6-26 is an interested person <This meaning, as it relates to particular
6-27 persons,> may vary from time to time and must be determined
6-28 according to the particular purposes of and matter involved in any
6-29 proceeding.
6-30 SECTION 15. Sections 113.111(a) and (b), Property Code, are
6-31 amended to read as follows:
6-32 (a) The following charges shall be made against income:
6-33 (1) ordinary expenses incurred in the administration,
6-34 management, or preservation of the trust property, including
6-35 regularly recurring taxes assessed against any portion of the
6-36 principal, water rates, premiums on insurance on the interests of
6-37 an income beneficiary, remainderman, or trustee, interest paid by
6-38 the trustee, and ordinary repairs;
6-39 (2) a reasonable allowance for depreciation on
6-40 improvements representing an addition of value to property held by
6-41 the trustee as part of the principal if the improvements are
6-42 subject to depreciation under generally accepted accounting
6-43 principles, but no allowance may be made for depreciation of the
6-44 portion of any real property used by a beneficiary as a residence
6-45 or for depreciation of any property held by the trustee on January
6-46 1, 1984, <the effective date of this subtitle> for which the
6-47 trustee was <is> not then making an allowance for depreciation;
6-48 (3) court costs and other fees on periodic judicial
6-49 accountings, unless the court directs otherwise;
6-50 (4) court costs, attorney's fees, and other fees on
6-51 other accounting or judicial proceedings if the matter primarily
6-52 concerns the income interest, unless the court directs otherwise;
6-53 (5) all expenses reasonably incurred by the trustee
6-54 for current management of principal and application of income;
6-55 (6) the portion of attorney's fees and the trustee's
6-56 compensation for services in the management and administration of
6-57 the trust estate, irrespective of the manner of computation, and
6-58 for extraordinary and unusual services, including remuneration of
6-59 the trustee for acceptance of the trust, distribution of the trust
6-60 properties, termination of the trust estate, and all other fees of
6-61 similar nature, as the trustee determines in its discretion to be
6-62 just and equitable; <and>
6-63 (7) a tax levied on proceeds defined as income under
6-64 this subchapter or the trust instrument that is payable by the
6-65 trustee; and
6-66 (8) regularly recurring charges payable from income to
6-67 the same extent and in the same manner that income is apportioned
6-68 under Section 113.103.
6-69 (b) The following charges shall be made against principal:
6-70 (1) the portion of the attorney's fees and the
7-1 trustee's compensation not charged to income under Subdivision (6)
7-2 of Subsection (a) of this section;
7-3 (2) expenses reasonably incurred in connection with
7-4 principal and court costs primarily concerning matters of
7-5 principal;
7-6 (3) charges not provided for in Subsection (a) of this
7-7 section, including the cost of investing and reinvesting principal,
7-8 the payments on principal of an indebtedness, including a mortgage
7-9 amortized by periodic payments of principal, expenses for
7-10 preparation of property for rental or sale, and, unless the court
7-11 directs otherwise, expenses incurred in maintaining or defending
7-12 any action to construe the trust, to protect the trust or the trust
7-13 property, or to assure the title of trust property;
7-14 (4) extraordinary repairs or expenses incurred in
7-15 making a capital improvement to principal, including special
7-16 assessments, but a trustee may establish an allowance for
7-17 depreciation out of income to the extent permitted by Subdivision
7-18 (2) of Subsection (a) of this section and by Section 113.106 of
7-19 this Act;
7-20 (5) a tax levied on profit, gain, or other proceeds
7-21 allocated to principal, notwithstanding characterization of the tax
7-22 as an income tax by the taxing authority; and
7-23 (6) if an estate tax, transfer tax, or inheritance tax
7-24 is levied in respect to a trust in which both an income beneficiary
7-25 and a remainderman have an interest, any amount apportioned to the
7-26 trust, including interest and penalties, even though the income
7-27 beneficiary also has rights in the principal<; and>
7-28 <(7) regularly recurring charges payable from income
7-29 to the same extent and in the same manner that income is
7-30 apportioned under Section 113.103 of this Act>.
7-31 SECTION 16. This Act takes effect September 1, 1995.
7-32 SECTION 17. (a) The changes in law made by Sections 1-11 of
7-33 this Act apply only to the estates of decedents who die on or after
7-34 September 1, 1995. The estates of decedents who die before the
7-35 effective date of this Act are governed by the law as it existed
7-36 immediately before the effective date of this Act, and that law is
7-37 continued in effect for that purpose.
7-38 (b) The change in law made by Section 14 of this Act applies
7-39 only to a trust created on or after the effective date of this Act.
7-40 A trust created before the effective date of this Act is governed
7-41 by the law then in effect, and the former law is continued for that
7-42 purpose.
7-43 SECTION 18. The importance of this legislation and the
7-44 crowded condition of the calendars in both houses create an
7-45 emergency and an imperative public necessity that the
7-46 constitutional rule requiring bills to be read on three several
7-47 days in each house be suspended, and this rule is hereby suspended.
7-48 * * * * *