By Hartnett H.B. No. 3004
74R6803 CLG-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the compensation of certain personal representatives.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 241, Texas Probate Code, is amended to
1-5 read as follows:
1-6 Sec. 241. Compensation of Personal Representatives. (a)
1-7 Except as provided by Subsections (b) and (c) of this section,
1-8 executors <Executors>, administrators, and temporary administrators
1-9 shall be entitled to receive a commission of five per cent (5%) on
1-10 all sums they may actually receive in cash, and the same per cent
1-11 on all sums they may actually pay out in cash, in the
1-12 administration of the estate on a finding by the court that the
1-13 executor or administrator has taken care of and managed the estate
1-14 in compliance with the standards of this code; provided, no
1-15 commission shall be allowed for receiving funds belonging to the
1-16 testator or intestate which were on hand or were held for the
1-17 testator or intestate at the time of his death in a financial
1-18 institution or a brokerage firm, including cash or a cash
1-19 equivalent held in a checking account, savings account, certificate
1-20 of deposit, or money market account; nor for collecting the
1-21 proceeds of any life insurance policy; nor for paying out cash to
1-22 the heirs or legatees as such; provided, further, however, that in
1-23 no event shall the executor or administrator be entitled in the
1-24 aggregate to more than five per cent (5%) of the gross fair market
2-1 value of the estate subject to administration. If the executor or
2-2 administrator, including a corporate fiduciary serving as an
2-3 executor or administrator, manages a farm, ranch, factory, or
2-4 other business of the estate, or if the compensation as calculated
2-5 above is unreasonably low, the court may allow him reasonable
2-6 compensation for his services, including unusual effort to collect
2-7 funds or life insurance. For this purpose, the county court shall
2-8 have jurisdiction to receive, consider, and act on applications
2-9 from independent executors. The court may, on application of an
2-10 interested person or on its own motion, deny a commission allowed
2-11 by this subsection in whole or in part if:
2-12 (1) the court finds that the executor or administrator
2-13 has not taken care of and managed estate property prudently; or
2-14 (2) the executor or administrator has been removed
2-15 under Section 149C or 222 of this code.
2-16 (b) Unless the will or another document signed by the
2-17 decedent specifically provides otherwise, a corporate fiduciary
2-18 serving as executor or administrator of a decedent's estate is
2-19 entitled to receive a fee in an amount that is customarily charged
2-20 in the locality by another corporate fiduciary performing the same
2-21 or similar services for an estate that is similar in size to the
2-22 estate being executed or administered by the corporate fiduciary.
2-23 (c) A corporate fiduciary is entitled to receive a
2-24 commission based on a provision in a will that authorizes the
2-25 corporate fiduciary to be compensated based on a fee schedule
2-26 maintained by the corporate fiduciary for duties performed as
2-27 executor of the decedent's estate only if the fee schedule is
3-1 reasonable. A fee schedule is reasonable if it entitles the
3-2 corporate fiduciary to receive an amount as compensation that:
3-3 (1) in the aggregate is not more than five per cent
3-4 (5%) of the gross fair market value of the decedent's estate
3-5 subject to probate administration; or
3-6 (2) in the aggregate is not more than the amount that
3-7 is customarily charged in the locality by another corporate
3-8 fiduciary performing the same or similar services for an estate
3-9 that is similar in size to the estate being executed or
3-10 administered by the corporate fiduciary.
3-11 (d) A corporate fiduciary may amend a fee schedule described
3-12 by Subsection (c) of this section without affecting the validity of
3-13 the testator's authorization under the will.
3-14 (e) <Definition.> In this section, "financial institution"
3-15 means an organization authorized to do business under state or
3-16 federal laws relating to financial institutions, including banks
3-17 and trust companies, savings banks, building and loan associations,
3-18 savings and loan companies or associations, and credit unions.
3-19 SECTION 2. This Act takes effect September 1, 1995, and
3-20 applies only to the estate of a person who dies on or after that
3-21 date. The estate of a person who dies before the effective date of
3-22 this Act is governed by the law as it existed immediately before
3-23 the person's death, and that law is continued in effect for that
3-24 purpose.
3-25 SECTION 3. The importance of this legislation and the
3-26 crowded condition of the calendars in both houses create an
3-27 emergency and an imperative public necessity that the
4-1 constitutional rule requiring bills to be read on three several
4-2 days in each house be suspended, and this rule is hereby suspended.