1-1     By:  Harris                                            S.B. No. 506

 1-2           (In the Senate - Filed February 10, 1997; February 12, 1997,

 1-3     read first time and referred to Committee on Jurisprudence;

 1-4     March 19, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 7, Nays 0; March 19, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 506                   By:  Harris

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the administration of decedents' estates.


1-12           SECTION 1.  Section 36, Texas Probate Code, is amended to

1-13     read as follows:

1-14           Sec. 36.  Duty and Responsibility of Judge.  (a)  It shall be

1-15     the duty of each county and probate court to use reasonable

1-16     diligence to see that personal representatives of estates being

1-17     administered under orders of the court and other officers of the

1-18     court perform the duty enjoined upon them by law pertaining to such

1-19     estates.  The judge shall annually, if in his opinion the same be

1-20     necessary, examine the condition of each of said estates and the

1-21     solvency of the bonds of personal representatives of estates.  He

1-22     shall, at any time he finds that the personal representative's bond

1-23     is not sufficient to protect such estate, require such personal

1-24     representatives to execute a new bond in accordance with law.  In

1-25     each case, he shall notify the personal representative, and the

1-26     sureties on the bond, as provided by law; and should damage or loss

1-27     result to estates through the gross neglect of the judge to use

1-28     reasonable diligence in the performance of his duty, he shall be

1-29     liable on his bond to those damaged by such neglect.

1-30           (b)  The court may request an applicant or court-appointed

1-31     fiduciary to produce other information identifying an applicant,

1-32     decedent, or personal representative, including social security

1-33     numbers, in addition to identifying information the applicant or

1-34     fiduciary is required to produce under this code.  The court shall

1-35     maintain the information required under this subsection, and the

1-36     information may not be filed with the clerk.

1-37           SECTION 2.  Subdivision (1), Subsection (b), Section 42,

1-38     Texas Probate Code, is amended to read as follows:

1-39                 (1)  For the purpose of inheritance, a child is the

1-40     child of his biological father if the child is born under

1-41     circumstances described by Section 151.002 [12.02], Family Code, is

1-42     adjudicated to be the child of the father by court decree as

1-43     provided by Chapter 160 [13], Family Code, was adopted by his

1-44     father, or if the father executed a statement of paternity as

1-45     provided by Section 160.202 [13.22], Family Code, or a like

1-46     statement properly executed in another jurisdiction, so that he and

1-47     his issue shall inherit from his father and from his paternal

1-48     kindred, both descendants, ascendants, and collaterals in all

1-49     degrees, and they may inherit from him and his issue.  A person

1-50     claiming to be a biological child of the decedent, who is not

1-51     otherwise presumed to be a child of the decedent, or claiming

1-52     inheritance through a biological child of the decedent, who is not

1-53     otherwise presumed to be a child of the decedent, may petition the

1-54     probate court for a determination of right of inheritance.  If the

1-55     court finds by clear and convincing evidence that the purported

1-56     father was the biological father of the child, the child is treated

1-57     as any other child of the decedent for the purpose of inheritance

1-58     and he and his issue may inherit from his paternal kindred, both

1-59     descendants, ascendants, and collaterals in all degrees, and they

1-60     may inherit from him and his issue.  This section does not permit

1-61     inheritance by a purported father of a child, whether recognized or

1-62     not, if the purported father's parental rights have been

1-63     terminated.

1-64           SECTION 3.  Subsection (a), Section 69, Texas Probate Code,

 2-1     is amended to read as follows:

 2-2           (a)  If, after making a will, the testator is divorced or the

 2-3     testator's marriage is annulled, all provisions in the will in

 2-4     favor of the testator's former spouse, or appointing such spouse to

 2-5     any fiduciary capacity under the will or with respect to the estate

 2-6     or person of the testator's children, must be read as if the former

 2-7     spouse failed to survive the testator, and shall be null and void

 2-8     and of no effect unless the will expressly provides otherwise.

 2-9           SECTION 4.  Subsection (a), Section 81, Texas Probate Code,

2-10     is amended to read as follows:

2-11           (a)  For Probate of a Written Will.  A written will shall, if

2-12     within the control of the applicant, be filed with the application

2-13     for its probate, and shall remain in the custody of the county

2-14     clerk unless removed therefrom by order of a proper court.  An

2-15     application for probate of a written will shall state:

2-16                 (1)  The name and domicile of each applicant.

2-17                 (2)  The name, age if known, and domicile of the

2-18     decedent, and the fact, time, and place of death.

2-19                 (3)  Facts showing that the court has venue.

2-20                 (4)  That the decedent owned real or personal property,

2-21     or both, describing the same generally, and stating its probable

2-22     value.

2-23                 (5)  The date of the will, the name and residence of

2-24     the executor named therein, if any, and if none be named, then the

2-25     name and residence of the person to whom it is desired that letters

2-26     be issued, and also the names and residences of the subscribing

2-27     witnesses, if any.

2-28                 (6)  Whether a child or children born or adopted after

2-29     the making of such will survived the decedent, and the name of each

2-30     such survivor, if any.

2-31                 (7)  That such executor or applicant, or other person

2-32     to whom it is desired that letters be issued, is not disqualified

2-33     by law from accepting letters.

2-34                 (8)  Whether the decedent was ever divorced, and if so,

2-35     when and from whom.

2-36                 (9)  [The social security number of the applicant and

2-37     of the decedent.]

2-38                 [(10)]  Whether the state, a governmental agency of the

2-39     state, or a charitable organization is named by the will as a

2-40     devisee.

2-41           The foregoing matters shall be stated and averred in the

2-42     application to the extent that they are known to the applicant, or

2-43     can with reasonable diligence be ascertained by him, and if any of

2-44     such matters is not stated or averred in the application, the

2-45     application shall set forth the reason why such matter is not so

2-46     stated and averred.

2-47           SECTION 5.  Section 82, Texas Probate Code, is amended to

2-48     read as follows:


2-50     ADMINISTRATION.  An application for letters of administration when

2-51     no will, written or oral, is alleged to exist shall state:

2-52                 (a)  The name and domicile of the applicant,

2-53     relationship to the decedent, if any, and that the applicant is not

2-54     disqualified by law to act as administrator;

2-55                 (b)  The name and intestacy of the decedent, and the

2-56     fact, time and place of death;

2-57                 (c)  Facts necessary to show venue in the court to

2-58     which the application is made;

2-59                 (d)  Whether the decedent owned real or personal

2-60     property, with a statement of its probable value;

2-61                 (e)  The name, age, marital status and address, if

2-62     known, and the relationship, if any, of each heir to the decedent;

2-63                 (f)  If known by the applicant at the time of the

2-64     filing of the application, whether children were born to or adopted

2-65     by the decedent, with the name and the date and place of birth of

2-66     each;

2-67                 (g)  If known by the applicant at the time of the

2-68     filing of the application, whether the decedent was ever divorced,

2-69     and if so, when and from whom; and

 3-1                 (h)  That a necessity exists for administration of the

 3-2     estate, alleging the facts which show such necessity[; and]

 3-3                 [(i)  The social security number of the applicant and

 3-4     of the decedent if known].

 3-5           SECTION 6.  Section 146, Texas Probate Code, is amended by

 3-6     amending Subsection (b) and adding Subsections (d) and (e) to read

 3-7     as follows:

 3-8           (b)  Secured Claims for Money.  Within six months after the

 3-9     date letters are granted or within four months after the date

3-10     notice is received under Section 295, whichever is later, a

3-11     creditor with a claim for money secured by real or personal

3-12     property of the estate must give notice to [notify] the independent

3-13     executor [by certified or registered mail] of the creditor's

3-14     election to have the creditor's claim approved as a matured secured

3-15     claim to be paid in due course of administration.  If the election

3-16     is not made, the claim is a preferred debt and lien against the

3-17     specific property securing the indebtedness and shall be paid

3-18     according to the terms of the contract that secured the lien, and

3-19     the claim may not be asserted against other assets of the estate.

3-20     The independent executor may pay the claim before the claim matures

3-21     if paying the claim before maturity is in the best interest of the

3-22     estate.

3-23           (d)  Notice Required of Unsecured Creditor.  An unsecured

3-24     creditor who has a claim for money against an estate and receives a

3-25     notice under Section 294(d) shall give notice to the independent

3-26     executor of the nature and amount of the claim not later than the

3-27     120th day after the date on which the notice is received or the

3-28     claim is barred.

3-29           (e)  Placement of Notice.  Notice required by Subsections (b)

3-30     and (d) must be contained in:

3-31                 (1)  a written instrument that is hand-delivered with

3-32     proof of receipt or mailed by certified mail, return receipt

3-33     requested, to the independent executor or the executor's attorney;

3-34                 (2)  a pleading filed in a lawsuit with respect to the

3-35     claim; or

3-36                 (3)  a written instrument or pleading filed in the

3-37     court in which the administration of the estate is pending.

3-38           SECTION 7.  Subsection (a), Section 234, Texas Probate Code,

3-39     is amended to read as follows:

3-40           (a)  Powers To Be Exercised Under Order of the Court.  The

3-41     personal representative of the estate of any person may, upon

3-42     application and order authorizing same, renew or extend any

3-43     obligation owing by or to such estate.  When a personal

3-44     representative deems it for the interest of the estate, he may,

3-45     upon written application to the court, and by order granting

3-46     authority:

3-47                 (1)  Purchase or exchange property;

3-48                 (2)  Take claims or property for the use and benefit of

3-49     the estate in payment of any debt due or owing to the estate;

3-50                 (3)  Compound bad or doubtful debts due or owing to the

3-51     estate;

3-52                 (4)  Make compromises or settlements in relation to

3-53     property or claims in dispute or litigation;

3-54                 (5)  Compromise or pay in full any secured claim which

3-55     has been allowed and approved as required by law against the estate

3-56     by conveying to the holder of such claim the real estate or

3-57     personalty securing the same, in full payment, liquidation, and

3-58     satisfaction thereof, and in consideration of cancellation of

3-59     notes, deeds of trust, mortgages, chattel mortgages, or other

3-60     evidences of liens securing the payment of such claim;

3-61                 (6)  Abandon the administration of property of the

3-62     estate that is burdensome or worthless.  Abandoned real or personal

3-63     property may be foreclosed by a secured party, trustee, or

3-64     mortgagee without further order of the court.

3-65           SECTION 8.  Section 281, Texas Probate Code, is amended to

3-66     read as follows:


3-68     exempt property, other than the homestead or any allowance made in

3-69     lieu thereof, shall be liable for the payment of Class 1 claims

 4-1     [the funeral expenses and the expenses of last sickness of the

 4-2     deceased, when claims are presented within the time prescribed

 4-3     therefor], but such property shall not be liable for any other

 4-4     debts of the estate.

 4-5           SECTION 9.  Section 290, Texas Probate Code, is amended to

 4-6     read as follows:

 4-7           Sec. 290.  FAMILY ALLOWANCE PREFERRED.  The family allowance

 4-8     made for the support of the surviving spouse and minor children of

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

4-10     charges against the estate, except Class 1 claims [expenses of the

4-11     funeral and last sickness of the deceased].

4-12           SECTION 10.  Section 299, Texas Probate Code, is amended to

4-13     read as follows:


4-15     general statutes of limitation are tolled on the date:

4-16                 (1)  a claim for money is filed or deposited with the

4-17     clerk [(a)  By filing a claim which is legally allowed and

4-18     approved]; or

4-19                 (2)  suit is brought against the personal

4-20     representative of an estate with respect to a claim of the estate

4-21     that is not required to be presented to the personal representative

4-22     [(b)  By bringing a suit upon a rejected and disapproved claim

4-23     within ninety days after such rejection or disapproval].

4-24           SECTION 11.  Subsections (e), (f), (i), and (j), Section 306,

4-25     Texas Probate Code, are amended to read  as follows:

4-26           (e)  Payment of Maturities on Preferred Debt and Lien Claims.

4-27     If property securing a claim allowed, approved, and fixed under

4-28     Paragraph (2) of Subsection (a) hereof is not sold or distributed

4-29     within six months from the date letters are granted, the

4-30     representative of the estate shall promptly pay all maturities

4-31     which have accrued on the debt according to the terms thereof, and

4-32     shall perform all the terms of any contract securing same.  If the

4-33     representative defaults in such payment or performance, on

4-34     application of the claimholder, the court shall:

4-35                 (1)  require the sale of said property subject to the

4-36     unmatured part of such debt and apply the proceeds of the sale to

4-37     the liquidation of the maturities;

4-38                 (2)  require the sale of the property free of the lien

4-39     and apply the proceeds to the payment of the whole debt; or

4-40                 (3)  authorize foreclosure by the claimholder as

4-41     provided by Subsections [under Subsection] (f) through (k) of this

4-42     section.

4-43           (f)  Foreclosure of Preferred Liens.  An application by a

4-44     claimholder under Subsection (e) of this section [If the court

4-45     authorizes a claimholder] to foreclose the claimholder's lien or

4-46     security interest on property securing a claim that has been

4-47     allowed, approved, and fixed under Paragraph (2) of Subsection (a)

4-48     of this section shall be[, the claimholder shall file with the

4-49     court an application] supported by affidavit of the claimholder

4-50     that:

4-51                 (1)  describes the property or part of the property to

4-52     be sold by foreclosure;

4-53                 (2)  describes the amounts of the claimholder's

4-54     outstanding debt;

4-55                 (3)  describes the maturities that have accrued on the

4-56     debt according to the terms of the debt;

4-57                 (4)  describes any other debts secured by a mortgage,

4-58     lien, or security interest against the property that are known by

4-59     the claimholder;

4-60                 (5)  contains a statement that the claimholder has no

4-61     knowledge of the existence of any debts secured by the property

4-62     other than those described by the application; and

4-63                 (6)  requests permission for the claimholder to

4-64     foreclose the claimholder's mortgage, lien, or security interest.

4-65           (i)  Hearing.  (1)  At the hearing, if the court finds that

4-66     there is a default in payment or performance under the contract

4-67     that secures the payment of the claim, the court shall:

4-68                       (A)  require the sale of the property subject to

4-69     the unmatured part of the debt and apply the proceeds of the sale

 5-1     to the liquidation of the maturities;

 5-2                       (B)  require the sale of the property free of the

 5-3     lien and apply the proceeds to the payment of the whole debt; or

 5-4                       (C)  authorize foreclosure by the claimholder as

 5-5     provided by Subsection (f) of this section.

 5-6                 (2)  When the court grants a claimholder the right of

 5-7     foreclosure, the court shall authorize [enter an order granting]

 5-8     the claimholder [permission] to foreclose the claimholder's

 5-9     mortgage, lien, or security interest in accordance with the

5-10     provisions of the document creating the mortgage, lien, or security

5-11     interest or in any other manner allowed by law.  In the discretion

5-12     of the court and based on the evidence presented at the hearing,

5-13     the court may fix a minimum price for the property to be sold by

5-14     foreclosure that does not exceed the fair market value of the

5-15     property.  If the court fixes a minimum price, the property may not

5-16     be sold at the foreclosure sale for a lower price.

5-17           (j)  Appeal.  Any person interested in the estate may appeal

5-18     an order issued under Subsection (i)(1)(C) [(i)] of this section.

5-19           SECTION 12.  This Act takes effect September 1, 1997, and

5-20     applies only to the estate of a person who dies on or after that

5-21     date.  An estate of a person who dies before the effective date of

5-22     this Act is governed by the law in effect on the date of the

5-23     person's death, and the former law is continued in effect for that

5-24     purpose.

5-25           SECTION 13.  The importance of this legislation and the

5-26     crowded condition of the calendars in both houses create an

5-27     emergency and an imperative public necessity that the

5-28     constitutional rule requiring bills to be read on three several

5-29     days in each house be suspended, and this rule is hereby suspended.

5-30                                  * * * * *