PMWJ H.B. 3432 75(R)BILL ANALYSIS


JUDICIAL AFFAIRS
H.B. 3432
By: Naishtat
4-28-97
Committee Report (Unamended)



BACKGROUND 

 Section 805 of the Probate Code outlines the order for payment of claims
against the guardianship estate of a ward.  A guardian's administrative
expenses are a third priority, following 1) expenses for the ward's care,
maintenance and education and 2) funeral expenses of the ward and expenses
of the ward's last illness, if the guardianship is kept open after the
ward's death.    When an estate is solvent, the existing law's claim
provisions allow for an efficient ordering of payment of claims.  However,
when an estate is insolvent, Section 805 becomes ineffective because
administrative expenses remain a third priority.  If the estate has
insufficient funds to pay all outstanding claims, it then becomes
difficult to find a guardian willing to be responsible for court costs and
attorney fees that would be incurred in attempts to pay debts of the
estate.  The result is that guardians resign to avoid being personally
liable for the court and attorney costs that are normally incurred in an
estate's administration.  


PURPOSE

 The purpose of this bill is to change the priority in the order of
payment for claims for insolvent estates to provide that administrative
expenses will be paid first, thus allowing the guardian to receive
administrative expenses as the guardian winds down the affairs of a ward's
insolvent guardianship estate. 


RULEMAKING AUTHORITY

 It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 


SECTION BY SECTION ANALYSIS

 SECTION 1 amends Section 805 of the Probate Code, concerning the order of
payment of claims against the estate of a ward, to allow the guardian to
give first priority to the payment of guardianship administration
expenses, when the estate is insolvent. 

 SECTION 2 allows the court, on its own or on any interested person's
motion,  to modify any guardianship in effect on September 1, 1997, to
conform with Section 1. 

 SECTION 3.  Application of act.
 
 SECTION 4.  Effective date.

 SECTION 5.  Emergency clause.