By Thompson                                           H.B. No. 1852
         76R14502 CLG-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the administration of and other matters relating to
 1-3     decedents' estates.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 10B, Texas Probate Code, is amended to
 1-6     read as follows:
 1-7           Sec. 10B.  Communications or Records Relating to Decedent's
 1-8     Condition Before Death.  Notwithstanding the Medical Practice Act
 1-9     (Article 4495b, Vernon's Texas Civil Statutes), a person who is a
1-10     party to a will contest or a proceeding in which a party relies on
1-11     the mental or testamentary capacity of a decedent before the
1-12     decedent's death as part of the party's claim or defense is
1-13     entitled to production of all communications or records relevant to
1-14     the decedent's condition before the decedent's death.  On receipt
1-15     of a subpoena of communications or records under this section and
1-16     proof of filing of the will contest or proceeding, by file-stamped
1-17     [certified] copy, the appropriate physician, hospital, medical
1-18     facility, custodian of records, or other person in possession of
1-19     the communications or records shall release the communications or
1-20     records to the party requesting the records without further
1-21     authorization.
1-22           SECTION 2.  Part 4, Chapter V, Texas Probate Code, is amended
1-23     by adding Section 128B to read as follows:
1-24           Sec. 128B.  NOTICE WHEN WILL PROBATED AFTER FOUR YEARS.  (a)
 2-1     Except as provided by Subsection (b) of this section, an applicant
 2-2     for the probate of a will under Section 73(a) of this code must
 2-3     give notice by service of process to each of the testator's heirs
 2-4     whose address can be ascertained by the applicant with reasonable
 2-5     diligence.  The notice must be given before the probate of the
 2-6     testator's will.
 2-7           (b)  Notice under Subsection (a)  of this section is not
 2-8     required to be provided to an heir who has delivered to the court
 2-9     an affidavit signed by the heir stating that the heir does not
2-10     object to the offer of the testator's will for probate.
2-11           (c)  The notice required by this section and an affidavit
2-12     described by Subsection (b) of this section must also contain a
2-13     statement that:
2-14                 (1)  the testator's property will pass to the
2-15     testator's heirs if the will is not admitted to probate; and
2-16                 (2)  the person offering the testator's will for
2-17     probate may not be in default for failing to present the will for
2-18     probate during the four-year period immediately following the
2-19     testator's death.
2-20           (d)  If the address of any of the testator's heirs cannot be
2-21     ascertained by the applicant with reasonable diligence, the court
2-22     shall appoint an attorney ad litem to protect the interests of the
2-23     unknown heirs after an application for the probate of a will is
2-24     made under Section 73(a) of this code.
2-25           (e)  In the case of an application for the probate of a will
2-26     of a testator who has had another will admitted to probate, this
2-27     section applies to a beneficiary of the testator's probated will
 3-1     instead of the testator's heirs.
 3-2           SECTION 3.  Section 149A(b), Texas Probate Code, is amended
 3-3     to read as follows:
 3-4           (b)  Enforcement of Demand.   Should the independent executor
 3-5     not comply with a demand for an accounting authorized by this
 3-6     section within sixty days after receipt of the demand, the person
 3-7     making the demand may compel compliance by an action in the county
 3-8     court, as that term is defined by Section 3 of this code [or by a
 3-9     suit in the district court].  After a hearing, the court shall
3-10     enter an order requiring the accounting to be made at such time as
3-11     it deems proper under the circumstances.
3-12           SECTION 4.  Section 149B(a), Texas Probate Code, is amended
3-13     to read as follows:
3-14           (a)  In addition to or in lieu of the right to an accounting
3-15     provided by Section 149A of this code, at any time after the
3-16     expiration of two years from the date that an independent
3-17     administration was created and the order appointing an independent
3-18     executor was entered, a person interested in the estate may
3-19     petition the county court, as that term is defined by Section 3 of
3-20     this code, for an accounting and distribution.  [The proceeding for
3-21     an accounting and distribution may be brought in the county court
3-22     if the county judge is licensed to practice law in the State of
3-23     Texas or may be brought in a statutory probate court, a county
3-24     court at law with probate jurisdiction, or a district court of the
3-25     county.]  The court may order an accounting to be made with the
3-26     court by the independent executor at such time as the court deems
3-27     proper.  The accounting shall include the information that the
 4-1     court deems necessary to determine whether any part of the estate
 4-2     should be distributed.
 4-3           SECTION 5.  Section 149C(a), Texas Probate Code, is amended
 4-4     to read as follows:
 4-5           (a)  The county court, as that term is defined by Section 3
 4-6     of this code[, a statutory probate court, a county court at law
 4-7     with probate jurisdiction, or a district court of the county], on
 4-8     its own motion or on motion of any interested person, after the
 4-9     independent executor has been cited by personal service to answer
4-10     at a time and place fixed in the notice, may remove an independent
4-11     executor when:
4-12                 (1)  the independent executor fails to return within
4-13     ninety days after qualification, unless such time is extended by
4-14     order of the court, an inventory of the property of the estate and
4-15     list of claims that have come to his knowledge;
4-16                 (2)  sufficient grounds appear to support belief that
4-17     he has misapplied or embezzled, or that he is about to misapply or
4-18     embezzle, all or any part of the property committed to his care;
4-19                 (3)  he fails to make an accounting which is required
4-20     by law to be made;
4-21                 (4)  he fails to timely file the notice required by
4-22     Section 128A of this code;
4-23                 (5)  he is proved to have been guilty of gross
4-24     misconduct or gross mismanagement in the performance of his duties;
4-25     or
4-26                 (6)  he becomes an incapacitated person, or is
4-27     sentenced to the penitentiary, or from any other cause becomes
 5-1     legally incapacitated from properly performing his fiduciary
 5-2     duties.
 5-3           SECTION 6.  Part 4, Chapter VI, Texas Probate Code, is
 5-4     amended  by adding Sections 149D, 149E, 149F, and 149G to read as
 5-5     follows:
 5-6           Sec. 149D.  DISTRIBUTION OF REMAINING ESTATE PENDING JUDICIAL
 5-7     DISCHARGE.  (a)  On or before filing an action under Section 149E
 5-8     of this code, the independent executor must distribute to the
 5-9     beneficiaries of the estate any of the remaining assets or property
5-10     of the estate that remains in the hands of the independent executor
5-11     after all of the estate's debts have been paid, except for a
5-12     reasonable reserve of assets that the independent executor may
5-13     retain in a fiduciary capacity pending court approval of the final
5-14     account.
5-15           (b)  The court may review the amount of assets on reserve and
5-16     may order the independent executor to make further distributions
5-17     under this section.
5-18           Sec. 149E.  JUDICIAL DISCHARGE OF INDEPENDENT EXECUTOR.  (a)
5-19     After an estate has been administered and if there is no further
5-20     need for an independent administration of the estate, the
5-21     independent executor of the estate may file an action for
5-22     declaratory judgment under Chapter 37, Civil Practice and Remedies
5-23     Code, seeking to discharge the independent executor from any
5-24     liability involving matters relating to the past administration of
5-25     the estate that have been fully and fairly disclosed.
5-26           (b)  On the filing of an action under this section, each
5-27     beneficiary of the estate shall be personally served with citation,
 6-1     except for a beneficiary who has waived the issuance and service of
 6-2     citation.
 6-3           (c)  In a proceeding under this section, the court may
 6-4     require the independent executor to file a final account that
 6-5     includes any information the court considers necessary to
 6-6     adjudicate the independent executor's request for a discharge of
 6-7     liability.  The court may audit, settle, or approve a final account
 6-8     filed under this subsection.
 6-9           Sec. 149F.  COURT COSTS AND OTHER CHARGES RELATED TO FINAL
6-10     ACCOUNT IN JUDICIAL DISCHARGE.  (a)    Except as ordered by the
6-11     court, the independent executor is entitled to pay from the estate
6-12     legal fees, expenses, or other costs of a proceeding incurred in
6-13     relation to a final account required under Section 149E of this
6-14     code.
6-15           (b)  The independent executor shall be personally liable to
6-16     refund any amount not approved by the court as a proper charge
6-17     against the estate.
6-18           Sec. 149G.  RIGHTS AND REMEDIES CUMULATIVE.  The rights and
6-19     remedies conferred by Sections 149D, 149E, and 149F of this code
6-20     are cumulative of other rights and remedies to which a person
6-21     interested in the estate may be entitled under law.
6-22           SECTION 7.  Part 3, Chapter VII, Texas Probate Code, is
6-23     amended by adding Sections 221A and 221B to read as follows:
6-24           Sec. 221A.  CHANGE OF RESIDENT AGENT.  (a)  A personal
6-25     representative may change its resident agent to accept service of
6-26     process in a probate proceeding or other action relating to the
6-27     estate by filing a statement of the change titled "Designation of
 7-1     Successor Resident Agent" with the court in which the probate
 7-2     proceeding is pending.  The statement must contain the names and
 7-3     addresses of the:
 7-4                 (1)  personal representative;
 7-5                 (2)  resident agent; and
 7-6                 (3)  successor resident agent.
 7-7           (b)  The designation of a successor resident agent made in a
 7-8     statement filed under this section takes effect on the date on
 7-9     which the statement is filed with the court.
7-10           Sec. 221B.  RESIGNATION OF RESIDENT AGENT.  (a)   A resident
7-11     agent of a personal representative may resign as the resident agent
7-12     by giving notice to the personal representative and filing with the
7-13     court in which the probate proceeding is pending a statement titled
7-14     "Resignation of Resident Agent" that:
7-15                 (1)  contains the name of the personal representative;
7-16                 (2)  contains the address of the personal
7-17     representative most recently known by the resident agent;
7-18                 (3)  states that notice of the resignation has been
7-19     given to the personal representative and that the personal
7-20     representative has not designated a successor resident agent; and
7-21                 (4)  contains the date on which the notice of the
7-22     resignation was given to the personal representative.
7-23           (b)  The resident agent shall send, by certified mail, return
7-24     receipt requested, a copy of a resignation statement filed under
7-25     Subsection (a)  of this section to:
7-26                 (1)  the personal representative at the address most
7-27     recently known by the agent; and
 8-1                 (2)  each party in the case or the party's attorney or
 8-2     other designated representative of record.
 8-3           (c)  The resignation of a resident agent takes effect on the
 8-4     date on which the court enters an order accepting the agent's
 8-5     resignation.  A court may not enter an order accepting the agent's
 8-6     resignation unless the agent complies with the requirements of this
 8-7     section.
 8-8           SECTION 8.  Section 222(a), Texas Probate Code, is amended to
 8-9     read as follows:
8-10           (a)  Without Notice.  (1) The court, on its own motion or on
8-11     motion of any interested person, and without notice, may remove any
8-12     personal representative, appointed under provisions of this Code,
8-13     who:
8-14                       (A)  Neglects to qualify in the manner and time
8-15     required by law;
8-16                       (B)  Fails to return within ninety days after
8-17     qualification, unless such time is extended by order of the court,
8-18     an inventory of the property of the estate and list of claims that
8-19     have come to his knowledge;
8-20                       (C)  Having been required to give a new bond,
8-21     fails to do so within the time prescribed;
8-22                       (D)  Absents himself from the State for a period
8-23     of three months at one time without permission of the court, or
8-24     removes from the State;
8-25                       (E)  Cannot be served with notices or other
8-26     processes because of the fact that the:
8-27                             (i)  personal representative's [by reason
 9-1     of the fact that his] whereabouts are unknown;
 9-2                             (ii)  personal representative [, or by
 9-3     reason of the fact that he] is eluding service; or
 9-4                             (iii)  personal representative is a
 9-5     nonresident of this state who does not have a resident agent to
 9-6     accept service of process in any probate proceeding or other action
 9-7     relating to the estate; or
 9-8                       (F)  Has misapplied, embezzled, or removed from
 9-9     the State, or is about to misapply, embezzle, or remove from the
9-10     State, all or any part of the property committed to the personal
9-11     representative's care.
9-12                 (2)  The court may remove a personal representative
9-13     under Paragraph (F), Subdivision (1), of this subsection only on
9-14     the presentation of clear and convincing evidence given under oath.
9-15           SECTION 9.  Section 270, Texas Probate Code, is amended to
9-16     read as follows:
9-17           Sec. 270.  LIABILITY OF HOMESTEAD FOR DEBTS.  The homestead
9-18     shall not be liable for the payment of any of the debts of the
9-19     estate, except for:
9-20                 (1)  the purchase money thereof; [,]
9-21                 (2)  the taxes due thereon; [, or]
9-22                 (3)  work and material used in constructing
9-23     improvements thereon if the requirements of Section 50(a)(5),
9-24     Article XVI, Texas  Constitution, are met;
9-25                 (4)  an owelty of partition imposed against the
9-26     entirety of the property by court order or by a written agreement
9-27     of the parties to the partition, including a debt of one spouse in
 10-1    favor of the other spouse resulting from a division or an award of
 10-2    a family homestead in a divorce proceeding;
 10-3                (5)  the refinance of a lien against a homestead,
 10-4    including a federal tax lien resulting from the tax debt of both
 10-5    spouses, if the homestead is a family homestead, or from the tax
 10-6    debt of the decedent; or
 10-7                (6)  an extension of credit on the homestead if the
 10-8    requirements of Section 50(a)(6), Article XVI, Texas Constitution,
 10-9    are met [; and in this last case only when the work and material
10-10    are contracted for in writing, with the consent of both spouses
10-11    given in the same manner as required in making a sale and
10-12    conveyance of the homestead].
10-13          SECTION 10.  Section 378B(a), Texas Probate Code, is amended
10-14    to read as follows:
10-15          (a)  Except as provided by Subsection (b) of this section and
10-16    unless the will provides otherwise, all expenses incurred in
10-17    connection with the settlement of a decedent's estate, other than
10-18    interest due on estate taxes, shall be charged against the
10-19    principal of the estate, including debts, funeral expenses, estate
10-20    taxes, [interest and] penalties relating to estate taxes, and
10-21    family allowances[, shall be charged against the principal of the
10-22    estate].    Interest due on estate taxes and fees [Fees] and
10-23    expenses of an attorney, accountant, or other professional advisor,
10-24    commissions and expenses of a personal representative, court costs,
10-25    and all other similar fees or expenses relating to the
10-26    administration of the estate shall be allocated between the income
10-27    and principal of the estate as the executor determines in its
 11-1    discretion to be just and equitable.
 11-2          SECTION 11.  Section 37.005, Civil Practice and Remedies
 11-3    Code, is amended to read as follows:
 11-4          Sec. 37.005.  DECLARATIONS RELATING TO TRUST OR ESTATE.  A
 11-5    person interested as or through an executor or[,] administrator,
 11-6    including an independent executor or administrator, a trustee,
 11-7    guardian, other fiduciary, creditor, devisee, legatee, heir, next
 11-8    of kin, or cestui que trust in the administration of a trust or of
 11-9    the estate of a decedent, an infant, mentally incapacitated
11-10    [disabled] person, or insolvent may have a declaration of rights or
11-11    legal relations in respect to the trust or estate:
11-12                (1)  to ascertain any class of creditors, devisees,
11-13    legatees, heirs, next of kin, or others;
11-14                (2)  to direct the executors, administrators, or
11-15    trustees to do or abstain from doing any particular act in their
11-16    fiduciary capacity;  [or]
11-17                (3)  to determine any question arising in the
11-18    administration of the trust or estate, including questions of
11-19    construction of wills and other writings; or
11-20                (4)  to determine rights or legal relations of an
11-21    independent executor or independent administrator regarding
11-22    fiduciary fees and the settling of accounts.
11-23          SECTION 12.  Sections 221A and 221B, Texas Probate Code, as
11-24    added by this Act, apply only to a change in designation of or a
11-25    resignation of a resident agent made on or after the effective date
11-26    of this Act.  The change in designation of or the resignation of a
11-27    resident agent made before the effective date of this Act is
 12-1    governed by the law in effect when the change in designation of or
 12-2    the resignation of the resident agent occurred, and the former law
 12-3    is continued in effect for that purpose.
 12-4          SECTION 13.  The changes in law made by this Act to Section
 12-5    222(a), Texas Probate Code, apply only to a motion for the removal
 12-6    of a personal representative made or filed on or after the
 12-7    effective date of this Act.  A motion for the removal of a personal
 12-8    representative made or filed before the effective date of this Act
 12-9    is governed by the law in effect on the date the motion was made or
12-10    filed, and the former law is continued in effect for that purpose.
12-11          SECTION 14.  The  changes in law made by this Act to Section
12-12    378B(a), Texas Probate Code, apply only to the accrual on or after
12-13    the effective date of this Act of interest due on estate taxes.
12-14    The accrual before the effective date of this Act of interest due
12-15    on estate taxes is  governed by the law in effect when the interest
12-16    accrued, and the former law is continued in effect for that
12-17    purpose.
12-18          SECTION 15.  Except as provided by Sections 12, 13, and 14 of
12-19    this Act, the changes in law made by this Act apply only to the
12-20    estate of a person who dies on or after the effective date of this
12-21    Act.  An estate of a person who dies before the effective date of
12-22    this Act is governed by the law in effect on the date of the
12-23    person's death, and the former law is continued in effect for that
12-24    purpose.
12-25          SECTION 16.  This Act takes effect September 1, 1999.
12-26          SECTION 17.  The importance of this legislation and the
12-27    crowded condition of the calendars in both houses create an
 13-1    emergency and an imperative public necessity that the
 13-2    constitutional rule requiring bills to be read on three several
 13-3    days in each house be suspended, and this rule is hereby suspended.