By:  Harris                                            S.B. No. 506

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the administration of decedents' estates.


 1-3           SECTION 1.  Section 36, Texas Probate Code, is amended to

 1-4     read as follows:

 1-5           Sec. 36.  Duty and Responsibility of Judge.  (a)  It shall be

 1-6     the duty of each county and probate court to use reasonable

 1-7     diligence to see that personal representatives of estates being

 1-8     administered under orders of the court and other officers of the

 1-9     court perform the duty enjoined upon them by law pertaining to such

1-10     estates.  The judge shall annually, if in his opinion the same be

1-11     necessary, examine the condition of each of said estates and the

1-12     solvency of the bonds of personal representatives of estates.  He

1-13     shall, at any time he finds that the personal representative's bond

1-14     is not sufficient to protect such estate, require such personal

1-15     representatives to execute a new bond in accordance with law.  In

1-16     each case, he shall notify the personal representative, and the

1-17     sureties on the bond, as provided by law; and should damage or loss

1-18     result to estates through the gross neglect of the judge to use

1-19     reasonable diligence in the performance of his duty, he shall be

1-20     liable on his bond to those damaged by such neglect.

1-21           (b)  The court may request an applicant or court-appointed

1-22     fiduciary to produce other information identifying an applicant,

1-23     decedent, or personal representative, including social security

 2-1     numbers, in addition to identifying information the applicant or

 2-2     fiduciary is required to produce under this code.  The court shall

 2-3     maintain the information required under this subsection, and the

 2-4     information may not be filed with the clerk.

 2-5           SECTION 2.  Subdivision (1), Subsection (b), Section 42,

 2-6     Texas Probate Code, is amended to read as follows:

 2-7                 (1)  For the purpose of inheritance, a child is the

 2-8     child of his biological father if the child is born under

 2-9     circumstances described by Section 151.002 [12.02], Family Code, is

2-10     adjudicated to be the child of the father by court decree as

2-11     provided by Chapter 160 [13], Family Code, was adopted by his

2-12     father, or if the father executed a statement of paternity as

2-13     provided by Section 160.202 [13.22], Family Code, or a like

2-14     statement properly executed in another jurisdiction, so that he and

2-15     his issue shall inherit from his father and from his paternal

2-16     kindred, both descendants, ascendants, and collaterals in all

2-17     degrees, and they may inherit from him and his issue.  A person

2-18     claiming to be a biological child of the decedent, who is not

2-19     otherwise presumed to be a child of the decedent, or claiming

2-20     inheritance through a biological child of the decedent, who is not

2-21     otherwise presumed to be a child of the decedent, may petition the

2-22     probate court for a determination of right of inheritance.  If the

2-23     court finds by clear and convincing evidence that the purported

2-24     father was the biological father of the child, the child is treated

2-25     as any other child of the decedent for the purpose of inheritance

 3-1     and he and his issue may inherit from his paternal kindred, both

 3-2     descendants, ascendants, and collaterals in all degrees, and they

 3-3     may inherit from him and his issue.  This section does not permit

 3-4     inheritance by a purported father of a child, whether recognized or

 3-5     not, if the purported father's parental rights have been

 3-6     terminated.

 3-7           SECTION 3.  Subsection (a), Section 69, Texas Probate Code,

 3-8     is amended to read as follows:

 3-9           (a)  If, after making a will, the testator is divorced or the

3-10     testator's marriage is annulled, all provisions in the will in

3-11     favor of the testator's former spouse, or appointing such spouse to

3-12     any fiduciary capacity under the will or with respect to the estate

3-13     or person of the testator's children, must be read as if the former

3-14     spouse failed to survive the testator, and shall be null and void

3-15     and of no effect unless the will expressly provides otherwise.

3-16           SECTION 4.  Subsection (a), Section 81, Texas Probate Code,

3-17     is amended to read as follows:

3-18           (a)  For Probate of a Written Will.  A written will shall, if

3-19     within the control of the applicant, be filed with the application

3-20     for its probate, and shall remain in the custody of the county

3-21     clerk unless removed therefrom by order of a proper court.  An

3-22     application for probate of a written will shall state:

3-23                 (1)  The name and domicile of each applicant.

3-24                 (2)  The name, age if known, and domicile of the

3-25     decedent, and the fact, time, and place of death.

 4-1                 (3)  Facts showing that the court has venue.

 4-2                 (4)  That the decedent owned real or personal property,

 4-3     or both, describing the same generally, and stating its probable

 4-4     value.

 4-5                 (5)  The date of the will, the name and residence of

 4-6     the executor named therein, if any, and if none be named, then the

 4-7     name and residence of the person to whom it is desired that letters

 4-8     be issued, and also the names and residences of the subscribing

 4-9     witnesses, if any.

4-10                 (6)  Whether a child or children born or adopted after

4-11     the making of such will survived the decedent, and the name of each

4-12     such survivor, if any.

4-13                 (7)  That such executor or applicant, or other person

4-14     to whom it is desired that letters be issued, is not disqualified

4-15     by law from accepting letters.

4-16                 (8)  Whether the decedent was ever divorced, and if so,

4-17     when and from whom.

4-18                 (9)  [The social security number of the applicant and

4-19     of the decedent.]

4-20                 [(10)]  Whether the state, a governmental agency of the

4-21     state, or a charitable organization is named by the will as a

4-22     devisee.

4-23           The foregoing matters shall be stated and averred in the

4-24     application to the extent that they are known to the applicant, or

4-25     can with reasonable diligence be ascertained by him, and if any of

 5-1     such matters is not stated or averred in the application, the

 5-2     application shall set forth the reason why such matter is not so

 5-3     stated and averred.

 5-4           SECTION 5.  Section 82, Texas Probate Code, is amended to

 5-5     read as follows:


 5-7     ADMINISTRATION.  An application for letters of administration when

 5-8     no will, written or oral, is alleged to exist shall state:

 5-9                 (a)  The name and domicile of the applicant,

5-10     relationship to the decedent, if any, and that the applicant is not

5-11     disqualified by law to act as administrator;

5-12                 (b)  The name and intestacy of the decedent, and the

5-13     fact, time and place of death;

5-14                 (c)  Facts necessary to show venue in the court to

5-15     which the application is made;

5-16                 (d)  Whether the decedent owned real or personal

5-17     property, with a statement of its probable value;

5-18                 (e)  The name, age, marital status and address, if

5-19     known, and the relationship, if any, of each heir to the decedent;

5-20                 (f)  If known by the applicant at the time of the

5-21     filing of the application, whether children were born to or adopted

5-22     by the decedent, with the name and the date and place of birth of

5-23     each;

5-24                 (g)  If known by the applicant at the time of the

5-25     filing of the application, whether the decedent was ever divorced,

 6-1     and if so, when and from whom; and

 6-2                 (h)  That a necessity exists for administration of the

 6-3     estate, alleging the facts which show such necessity[; and]

 6-4                 [(i)  The social security number of the applicant and

 6-5     of the decedent if known].

 6-6           SECTION 6.  Section 146, Texas Probate Code, is amended by

 6-7     amending Subsection (b) and adding Subsections (d) and (e) to read

 6-8     as follows:

 6-9           (b)  Secured Claims for Money.  Within six months after the

6-10     date letters are granted or within four months after the date

6-11     notice is received under Section 295, whichever is later, a

6-12     creditor with a claim for money secured by real or personal

6-13     property of the estate must give notice to [notify] the independent

6-14     executor [by certified or registered mail] of the creditor's

6-15     election to have the creditor's claim approved as a matured secured

6-16     claim to be paid in due course of administration.  If the election

6-17     is not made, the claim is a preferred debt and lien against the

6-18     specific property securing the indebtedness and shall be paid

6-19     according to the terms of the contract that secured the lien, and

6-20     the claim may not be asserted against other assets of the estate.

6-21     The independent executor may pay the claim before the claim matures

6-22     if paying the claim before maturity is in the best interest of the

6-23     estate.

6-24           (d)  Notice Required of Unsecured Creditor.  An unsecured

6-25     creditor who has a claim for money against an estate and receives a

 7-1     notice under Section 294(d) shall give notice to the independent

 7-2     executor of the nature and amount of the claim not later than the

 7-3     120th day after the date on which the notice is received or the

 7-4     claim is barred.

 7-5           (e)  Placement of Notice.  Notice required by Subsections (b)

 7-6     and (d) must be contained in:

 7-7                 (1)  a written instrument that is hand-delivered with

 7-8     proof of receipt or mailed by certified mail, return receipt

 7-9     requested, to the independent executor or the executor's attorney;

7-10                 (2)  a pleading filed in a lawsuit with respect to the

7-11     claim; or

7-12                 (3)  a written instrument or pleading filed in the

7-13     court in which the administration of the estate is pending.

7-14           SECTION 7.  Subsection (a), Section 234, Texas Probate Code,

7-15     is amended to read as follows:

7-16           (a)  Powers To Be Exercised Under Order of the Court.  The

7-17     personal representative of the estate of any person may, upon

7-18     application and order authorizing same, renew or extend any

7-19     obligation owing by or to such estate.  When a personal

7-20     representative deems it for the interest of the estate, he may,

7-21     upon written application to the court, and by order granting

7-22     authority:

7-23                 (1)  Purchase or exchange property;

7-24                 (2)  Take claims or property for the use and benefit of

7-25     the estate in payment of any debt due or owing to the estate;

 8-1                 (3)  Compound bad or doubtful debts due or owing to the

 8-2     estate;

 8-3                 (4)  Make compromises or settlements in relation to

 8-4     property or claims in dispute or litigation;

 8-5                 (5)  Compromise or pay in full any secured claim which

 8-6     has been allowed and approved as required by law against the estate

 8-7     by conveying to the holder of such claim the real estate or

 8-8     personalty securing the same, in full payment, liquidation, and

 8-9     satisfaction thereof, and in consideration of cancellation of

8-10     notes, deeds of trust, mortgages, chattel mortgages, or other

8-11     evidences of liens securing the payment of such claim;

8-12                 (6)  Abandon the administration of property of the

8-13     estate that is burdensome or worthless.  Abandoned real or personal

8-14     property may be foreclosed by a secured party, trustee, or

8-15     mortgagee without further order of the court.

8-16           SECTION 8.  Section 281, Texas Probate Code, is amended to

8-17     read as follows:


8-19     exempt property, other than the homestead or any allowance made in

8-20     lieu thereof, shall be liable for the payment of Class 1 claims

8-21     [the funeral expenses and the expenses of last sickness of the

8-22     deceased, when claims are presented within the time prescribed

8-23     therefor], but such property shall not be liable for any other

8-24     debts of the estate.

8-25           SECTION 9.  Section 290, Texas Probate Code, is amended to

 9-1     read as follows:

 9-2           Sec. 290.  FAMILY ALLOWANCE PREFERRED.  The family allowance

 9-3     made for the support of the surviving spouse and minor children of

 9-4     the deceased shall be paid in preference to all other debts or

 9-5     charges against the estate, except Class 1 claims [expenses of the

 9-6     funeral and last sickness of the deceased].

 9-7           SECTION 10.  Section 299, Texas Probate Code, is amended to

 9-8     read as follows:


9-10     general statutes of limitation are tolled on the date:

9-11                 (1)  a claim for money is filed or deposited with the

9-12     clerk [(a)  By filing a claim which is legally allowed and

9-13     approved]; or

9-14                 (2)  suit is brought against the personal

9-15     representative of an estate with respect to a claim of the estate

9-16     that is not required to be presented to the personal representative

9-17     [(b)  By bringing a suit upon a rejected and disapproved claim

9-18     within ninety days after such rejection or disapproval].

9-19           SECTION 11.  Subsections (e), (f), (i), and (j), Section 306,

9-20     Texas Probate Code, are amended to read as follows:

9-21           (e)  Payment of Maturities on Preferred Debt and Lien Claims.

9-22     If property securing a claim allowed, approved, and fixed under

9-23     Paragraph (2) of Subsection (a) hereof is not sold or distributed

9-24     within six months from the date letters are granted, the

9-25     representative of the estate shall promptly pay all maturities

 10-1    which have accrued on the debt according to the terms thereof, and

 10-2    shall perform all the terms of any contract securing same.  If the

 10-3    representative defaults in such payment or performance, on

 10-4    application of the claimholder, the court shall:

 10-5                (1)  require the sale of said property subject to the

 10-6    unmatured part of such debt and apply the proceeds of the sale to

 10-7    the liquidation of the maturities;

 10-8                (2)  require the sale of the property free of the lien

 10-9    and apply the proceeds to the payment of the whole debt; or

10-10                (3)  authorize foreclosure by the claimholder as

10-11    provided by Subsections [under Subsection] (f) through (k) of this

10-12    section.

10-13          (f)  Foreclosure of Preferred Liens.  An application by a

10-14    claimholder under Subsection (e) of this section [If the court

10-15    authorizes a claimholder] to foreclose the claimholder's lien or

10-16    security interest on property securing a claim that has been

10-17    allowed, approved, and fixed under Paragraph (2) of Subsection (a)

10-18    of this section shall be[, the claimholder shall file with the

10-19    court an application] supported by affidavit of the claimholder

10-20    that:

10-21                (1)  describes the property or part of the property to

10-22    be sold by foreclosure;

10-23                (2)  describes the amounts of the claimholder's

10-24    outstanding debt;

10-25                (3)  describes the maturities that have accrued on the

 11-1    debt according to the terms of the debt;

 11-2                (4)  describes any other debts secured by a mortgage,

 11-3    lien, or security interest against the property that are known by

 11-4    the claimholder;

 11-5                (5)  contains a statement that the claimholder has no

 11-6    knowledge of the existence of any debts secured by the property

 11-7    other than those described by the application; and

 11-8                (6)  requests permission for the claimholder to

 11-9    foreclose the claimholder's mortgage, lien, or security interest.

11-10          (i)  Hearing.  (1)  At the hearing, if the court finds that

11-11    there is a default in payment or performance under the contract

11-12    that secures the payment of the claim, the court shall:

11-13                      (A)  require the sale of the property subject to

11-14    the unmatured part of the debt and apply the proceeds of the sale

11-15    to the liquidation of the maturities;

11-16                      (B)  require the sale of the property free of the

11-17    lien and apply the proceeds to the payment of the whole debt; or

11-18                      (C)  authorize foreclosure by the claimholder as

11-19    provided by Subsection (f) of this section.

11-20                (2)  When the court grants a claimholder the right of

11-21    foreclosure, the court shall authorize [enter an order granting]

11-22    the claimholder [permission] to foreclose the claimholder's

11-23    mortgage, lien, or security interest in accordance with the

11-24    provisions of the document creating the mortgage, lien, or security

11-25    interest or in any other manner allowed by law.  In the discretion

 12-1    of the court and based on the evidence presented at the hearing,

 12-2    the court may fix a minimum price for the property to be sold by

 12-3    foreclosure that does not exceed the fair market value of the

 12-4    property.  If the court fixes a minimum price, the property may not

 12-5    be sold at the foreclosure sale for a lower price.

 12-6          (j)  Appeal.  Any person interested in the estate may appeal

 12-7    an order issued under Subsection (i)(1)(C) [(i)] of this section.

 12-8          SECTION 12.  This Act takes effect September 1, 1997, and

 12-9    applies only to the estate of a person who dies on or after that

12-10    date.  An estate of a person who dies before the effective date of

12-11    this Act is governed by the law in effect on the date of the

12-12    person's death, and the former law is continued in effect for that

12-13    purpose.

12-14          SECTION 13.  The importance of this legislation and the

12-15    crowded condition of the calendars in both houses create an

12-16    emergency and an imperative public necessity that the

12-17    constitutional rule requiring bills to be read on three several

12-18    days in each house be suspended, and this rule is hereby suspended.