By Thompson H.B. No. 1851
76R1877 CLG-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to guardianships and management trusts for incapacitated
1-3 persons.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 745(c), Texas Probate Code, is amended to
1-6 read as follows:
1-7 (c) When the estate of a minor ward consists only of cash or
1-8 cash equivalents in an amount of $50,000 [$25,000] or less, the
1-9 guardianship of the estate may be terminated and the assets paid to
1-10 the county clerk of the county in which the guardianship
1-11 proceeding is pending, and the clerk shall manage the funds as
1-12 provided by Section 887 of this code.
1-13 SECTION 2. Subpart D, Part 4, Chapter XIII, Texas Probate
1-14 Code, is amended by adding Sections 760A and 760B to read as
1-15 follows:
1-16 Sec. 760A. CHANGE OF RESIDENT AGENT. (a) A guardian may
1-17 change its resident agent to accept service of process in a
1-18 guardianship proceeding or other matter relating to the
1-19 guardianship by filing a statement of the change entitled
1-20 "Designation of Successor Resident Agent" with the court in which
1-21 the guardianship proceeding is pending. The statement must contain
1-22 the names and addresses of the:
1-23 (1) guardian;
1-24 (2) resident agent; and
2-1 (3) successor resident agent.
2-2 (b) The designation of a successor resident agent made in a
2-3 statement filed under this section takes effect on the date on
2-4 which the statement is filed with the court.
2-5 Sec. 760B. RESIGNATION OF RESIDENT AGENT. (a) A resident
2-6 agent of a guardian may resign as the resident agent by giving
2-7 notice to the guardian and filing with the court in which the
2-8 guardianship proceeding is pending a statement entitled
2-9 "Resignation of Resident Agent" that:
2-10 (1) contains the name of the guardian;
2-11 (2) contains the address of the guardian most recently
2-12 known by the resident agent;
2-13 (3) states that notice of the resignation has been
2-14 given to the guardian and that the guardian does not have a
2-15 resident agent; and
2-16 (4) contains the date on which the notice of the
2-17 resignation was given to the guardian.
2-18 (b) The resident agent shall send, by certified mail, return
2-19 receipt requested, a copy of a resignation statement filed under
2-20 Subsection (a) of this section to:
2-21 (1) the guardian at the address most recently known by
2-22 the agent; and
2-23 (2) each party in the case or the party's attorney or
2-24 other designated representative of record.
2-25 (c) The resignation of a resident agent takes effect on the
2-26 date on which the court enters an order accepting the agent's
2-27 resignation. A court may not enter an order accepting the agent's
3-1 resignation unless the agent complies with the requirements of this
3-2 section.
3-3 SECTION 3. Section 761(a), Texas Probate Code, is amended to
3-4 read as follows:
3-5 (a) The court, on its own motion or on motion of any
3-6 interested person, including the ward, and without notice, may
3-7 remove any guardian, appointed under this chapter, who:
3-8 (1) neglects to qualify in the manner and time
3-9 required by law;
3-10 (2) fails to return within 90 days after
3-11 qualification, unless the time is extended by order of the court,
3-12 an inventory of the property of the guardianship estate and list of
3-13 claims that have come to the guardian's knowledge;
3-14 (3) having been required to give a new bond, fails to
3-15 do so within the time prescribed;
3-16 (4) absents himself from the state for a period of
3-17 three months at one time without permission of the court, or
3-18 removes from the state;
3-19 (5) cannot be served with notices or other processes
3-20 because of the fact that:
3-21 (A) the guardian's whereabouts are unknown;
3-22 (B) [, or because] the guardian is eluding
3-23 service; or
3-24 (C) the guardian is a nonresident of this state
3-25 who does not have a resident agent to accept service of process in
3-26 any guardianship proceeding or other matter relating to the
3-27 guardianship;
4-1 (6) has misapplied, embezzled, or removed from the
4-2 state, or is about to misapply, embezzle, or remove from the state,
4-3 all or any part of the property committed to the guardian's care;
4-4 or
4-5 (7) has cruelly treated a ward, or has neglected to
4-6 educate or maintain the ward as liberally as the means of the ward
4-7 and the condition of the ward's estate permit.
4-8 SECTION 4. Subpart M, Part 4, Chapter XIII, Texas Probate
4-9 Code, is amended by adding Section 865A to read as follows:
4-10 Sec. 865A. INSPECTION OF CERTAIN INSTRUMENT FOR ESTATE
4-11 PLANNING PURPOSES. (a) On the filing of an application under
4-12 Section 865 of this code, the guardian of the ward's estate may
4-13 apply to the court for an order to seek an in camera inspection of
4-14 a true copy of a will, codicil, trust, or other estate planning
4-15 instrument of the ward as a means of obtaining access to the
4-16 instrument for purposes of establishing an estate plan under
4-17 Section 865 of this code.
4-18 (b) An application filed under this section must:
4-19 (1) be sworn to by the guardian;
4-20 (2) list all of the instruments requested for
4-21 inspection; and
4-22 (3) state one or more reasons supporting the necessity
4-23 to inspect each requested instrument for the purpose described by
4-24 Subsection (a) of this section.
4-25 (c) A person who files an application under this section
4-26 shall send a copy of the application to:
4-27 (1) each person who has custody of an instrument
5-1 listed in the application;
5-2 (2) the ward's spouse;
5-3 (3) the ward's dependents;
5-4 (4) all devisees under a will, trust, or other
5-5 beneficial instrument relating to the ward's estate; and
5-6 (5) any other person as directed by the court.
5-7 (d) Notice required by Subsection (c) of this section must
5-8 be delivered by certified mail to a person described by Subsection
5-9 (c)(2), (3), (4), or (5) of this section and by registered or
5-10 certified mail to a person described by Subsection (c)(1) of this
5-11 section. After the 10th day after the date on which the applicant
5-12 complies with the notice requirement, the applicant may request
5-13 that a hearing be held on the application. Notice of the date,
5-14 time, and place of the hearing must be given by the applicant to
5-15 each person described by Subsection (c)(1) of this section when the
5-16 court sets a date for a hearing on the application.
5-17 (e) After the conclusion of a hearing on the application and
5-18 on a finding that there is good cause for an in camera inspection
5-19 of a requested instrument, the court shall direct the person that
5-20 has custody of the requested will, codicil, trust, or other estate
5-21 planning instrument to deliver a true copy of the instrument to the
5-22 court for in camera inspection only. After conducting an in camera
5-23 review of the instrument, the court, if good cause exists, shall
5-24 release all or part of the instrument to the applicant only for the
5-25 purpose described by Subsection (a) of this section.
5-26 (f) The court may appoint a guardian ad litem for the ward
5-27 or an interested party at any stage of the proceedings if it is
6-1 considered advisable for the protection of the ward or the
6-2 interested party.
6-3 (g) An attorney does not violate the attorney-client
6-4 privilege solely by complying with a court order to release an
6-5 instrument subject to this section. Notwithstanding Section
6-6 22.004, Government Code, the supreme court may not amend or adopt
6-7 rules in conflict with this subsection.
6-8 SECTION 5. Section 867, Texas Probate Code, is amended to
6-9 read as follows:
6-10 Sec. 867. CREATION OF MANAGEMENT TRUST. (a) An application
6-11 to create a trust for the management of all or part of the estate
6-12 of a ward or proposed ward may be filed in the court in which the
6-13 guardianship proceeding is pending by:
6-14 (1) the guardian of the person or estate of the ward;
6-15 (2) the attorney ad litem of a ward or proposed ward
6-16 at any time after the date of the ad litem's appointment under
6-17 Section 646 of this code;
6-18 (3) the guardian ad litem of a ward or proposed ward
6-19 at any time after the date of the ad litem's appointment under
6-20 Section 645 of this code; or
6-21 (4) any other person who has standing to commence a
6-22 guardianship proceeding under Section 642 of this code.
6-23 (b) Before entering an order that creates a trust under this
6-24 section, the applicant has the burden to prove and the court must
6-25 find by clear and convincing evidence that:
6-26 (1) the proposed ward is an incapacitated person or
6-27 the ward remains incapacitated, as appropriate;
7-1 (2) creation of a trust under this section is in the
7-2 best interest of the ward or proposed ward; and
7-3 (3) both the rights and property of the ward or
7-4 proposed ward will be protected by the creation of a trust under
7-5 this section.
7-6 (c) A determination of incapacity of an adult proposed ward
7-7 at a hearing held under this section must be made in the same
7-8 manner and to the same extent as a determination of incapacity is
7-9 made for an adult proposed ward at a proceeding to appoint a
7-10 guardian of the estate for the ward.
7-11 (d) An [On application by the guardian of a ward or by a
7-12 ward's attorney ad litem at any time after the date of the
7-13 attorney's appointment under Section 646 of this code, the court in
7-14 which the guardianship proceeding is pending may enter an order
7-15 that creates for the ward's benefit a trust for the management of
7-16 guardianship funds if the court finds that the creation of the
7-17 trust is in the ward's best interests. The] order creating a trust
7-18 under this section shall:
7-19 (1) direct the guardian or another person to deliver
7-20 all or part of the assets of the estate of the ward or proposed
7-21 ward [guardianship] to a trust company or a state or national bank
7-22 that has trust powers in this state; and
7-23 (2) [. The order shall] include the terms, conditions,
7-24 and limitations placed on the trust.
7-25 (e) An order creating a trust under this section is
7-26 sufficient legal authority for the delivery, transfer, or payment
7-27 of funds or property to the trustee by a person who:
8-1 (1) owes money to the ward or proposed ward;
8-2 (2) has custody of any of the property of the ward or
8-3 proposed ward; or
8-4 (3) acts as a registrar or transfer agent of any
8-5 evidence of interest, indebtedness, property, or right belonging to
8-6 the ward or proposed ward.
8-7 (f) The court shall maintain the trust under the same cause
8-8 number as the guardianship proceeding.
8-9 SECTION 6. Section 868A, Texas Probate Code, is amended to
8-10 read as follows:
8-11 Sec. 868A. DISCHARGE OF GUARDIAN OF ESTATE AND CONTINUATION
8-12 OF TRUST. On or at any time after the creation of a trust under
8-13 this subpart, the court may discharge the guardian of the [ward's]
8-14 estate or person, or both, of the ward [only] if [a guardian of the
8-15 ward's person remains and] the court determines that the discharge
8-16 is in the ward's best interests.
8-17 SECTION 7. Section 869C, Texas Probate Code, is amended to
8-18 read as follows:
8-19 Sec. 869C. JURISDICTION OVER TRUST MATTERS. A court that
8-20 creates a trust under Section 867 of this code has the same
8-21 jurisdiction over the trustee and to hear matters relating to the
8-22 trust as the court has with respect to a guardian, the
8-23 guardianship, and other matters covered by this chapter.
8-24 SECTION 8. The change in law made by this Act to Section
8-25 745(c), Texas Probate Code, applies only to an application to close
8-26 a guardianship filed on or after the effective date of this Act.
8-27 An application to close a guardianship filed before the effective
9-1 date of this Act is governed by the law in effect on the date on
9-2 which the application was filed, and the former law is continued in
9-3 effect for that purpose.
9-4 SECTION 9. Sections 760A and 760B, Texas Probate Code, as
9-5 added by this Act, apply only to a change in designation of or a
9-6 resignation of a resident agent made on or after the effective date
9-7 of this Act. A change in designation of or the resignation of a
9-8 resident agent made before the effective date of this Act is
9-9 governed by the law in effect when the change in designation of or
9-10 the resignation of the resident agent occurred, and the former law
9-11 is continued in effect for that purpose.
9-12 SECTION 10. The changes in law made by this Act to Section
9-13 761, Texas Probate Code, apply only to a motion for the removal of
9-14 a guardian made or filed on or after the effective date of this
9-15 Act. A motion for the removal of a guardian made or filed before
9-16 the effective date of this Act is governed by the law in effect on
9-17 the date the motion was made or filed, and the former law is
9-18 continued in effect for that purpose.
9-19 SECTION 11. The changes in law made by this Act to Section
9-20 867, Texas Probate Code, apply only to an application for the
9-21 creation of a trust filed on or after the effective date of this
9-22 Act. An application for the creation of a trust filed before the
9-23 effective date of this Act is governed by the law in effect when
9-24 the application was filed, and the former law is continued in
9-25 effect for that purpose.
9-26 SECTION 12. The changes in law made by this Act to Section
9-27 868A, Texas Probate Code, apply only to the motion for the
10-1 discharge of a guardian made or filed on or after the effective
10-2 date of this Act. A motion for the discharge of a guardian made or
10-3 filed before the effective date of this Act is governed by the law
10-4 in effect on the date the motion was made or filed, and the former
10-5 law is continued in effect for that purpose.
10-6 SECTION 13. This Act takes effect September 1, 1999.
10-7 SECTION 14. The importance of this legislation and the
10-8 crowded condition of the calendars in both houses create an
10-9 emergency and an imperative public necessity that the
10-10 constitutional rule requiring bills to be read on three several
10-11 days in each house be suspended, and this rule is hereby suspended.
10-12 COMMITTEE AMENDMENT NO. 1
10-13 Amend H.B. No. 1851 by striking Sections 5, 6, 7, 11, and 12
10-14 of the bill and by renumbering the remaining sections of the bill
10-15 accordingly.
10-16 76R12201 CLG-F Hartnett