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.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
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:
2-49 Sec. 82. CONTENTS OF APPLICATION FOR LETTERS OF
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:
3-67 Sec. 281. EXEMPT PROPERTY LIABLE FOR CERTAIN DEBTS. The
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:
4-14 Sec. 299. TOLLING OF GENERAL STATUTES OF LIMITATION. The
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 * * * * *