KDB H.B. 1132 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1132 By: Thompson Judicial Affairs 3/11/2001 Committee Report (Amended) BACKGROUND AND PURPOSE Under current law, the appointment of a temporary or permanent guardian of an estate automatically terminates the authority of an agent for the ward to act under the ward's durable power of attorney. This may be detrimental to the ward if a temporary guardian is appointed but the court determines that no permanent guardian is needed or if there is a limited need for a guardian to act, but the court cannot authorize a guardian to take limited actions without destroying the authority of the agent to act under the power of attorney. While a court may authorize compensation to a guardian from the ward's estate, there is no provision regarding governmental funds as an alternate source of compensation. The surviving parent of a minor or an adult incapacitated child is permitted to appoint someone, by will or written declaration, to be guardian of the person of the parent's minor children or adult incapacitated child after the death of the parent, but not in the event of the surviving parent's subsequent incapacity. There are requirements for written declarations relating to adult incapacitated children, but not for minor children. A court is permitted to terminate the guardianship of the estate of a minor ward, but only if the guardianship assets are less than $25,000, whereas a county clerk is permitted to hold property of a ward worth less than $50,000 without the need for a guardianship. A nonresident seeking guardianship is required to file a designation of resident agent to accept service of process, but there are no procedures for a guardian to appoint a successor resident agent or a resident agent to resign. A married couple may serve as joint guardians of a minor, but a court is not authorized to name a sole guardian upon dissolution of the marriage. If a judicial determination of incapacity is obtained, the spouse of the incapacitated person has the right to manage the entire community property estate without court supervision. However, there are no procedures for times when the management by the non-incapacitated spouse is called into question. House Bill 1132 modifies provisions relating to guardianships and other related matters concerning incapacitated persons. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 1132 amends the Texas Probate Code to authorize the court if, after execution of a durable power of attorney, a court of the principal's domicile appoints a temporary guardian of the estate of the principal to suspend the powers of the attorney in fact or agent on the qualification of the temporary guardian of the estate until the date on which the term of the temporary guardian expires. The above provision may not be construed as prohibiting the application for or issuance of a temporary restraining order under applicable law. The bill also provides that appointment of a permanent guardian of the estate terminates the authority of an agent to act under a power of attorney (Sec. 485). The bill provides that other funds available for compensating guardians, in addition to the available funds of the ward's estate, may be used to compensate a guardian or temporary guardian of a person (Sec. 665). The bill also provides that a guardian may be appointed in the event of the incapacitation of a parent (Secs. 676, 677, and 677A). The bill increases from $25,000 or less to $50,000 or less the amount of cash or cash equivalents for which the guardianship of an estate may be terminated and the assets paid to the county clerk of the county in which the guardianship proceeding is pending (Sec.745). The bill modifies provisions regarding the requirements of the written declaration appointing or designating an eligible person to be guardian of the child and sets forth provisions regarding self-proving declarations and affidavits (Secs. 677A, 677B, 679 and 679A). The bill sets forth provisions regarding the change of resident agent by a guardian to accept service of process in a guardianship proceeding or other matter relating to the guardianship by filing a statement and the content of such a statement (Sec. 760A). The bill sets forth provisions regarding the resignation of a resident agent of a guardian by giving notice to the guardian and filing with the court in which the guardianship proceeding is pending a statement and also sets forth the content of such a statement (Sec. 760B). The bill modifies provisions regarding removal of any appointed guardian under specified circumstances by the court (Sec. 761). The bill sets forth provisions regarding an in camera inspection of certain instruments that are used for estate planning purposes and the requirements for filing and sending an application for such an inspection. The bill also sets forth the hearing requirements for such an application (Sec. 865A). The bill deletes the provision that the written application for the appointment of a temporary guardian must state the social security numbers of the applicant and the proposed ward (Sec. 875). The bill modifies provisions regarding an incapacitated spouse to include the administration of the spouse's separate property. The spouse who is not incapacitated is presumed to be suitable and qualified to serve as community administrator. The bill sets forth provisions regarding the removal of the spouse who is not incapacitated as community administrator and the appointment of a guardian of the estate for the incapacitated spouse by the court under specified circumstances. The bill also sets forth the administration authority of such a guardian. On a person's removal as community administrator or on qualification of a guardian of the estate of the person's incapacitated spouse, the bill requires a spouse who is not incapacitated to continue to administer the person's own separate property and community property that is subject to the person's sole management, control, and disposition. This includes any community property unless the person is required to deliver a portion of that community property to the guardian of the estate of the person's incapacitated spouse, in which event, the person is required to continue to administer only the portion of the community property, and any income earned on property the person is authorized to administer. The bill provides that the duties and obligations between spouses, including the duty to support the other spouse, and the rights of any creditor of either spouse are not affected by the manner in which community property is administered (Sec. 883). The bill sets forth provisions regarding the accounting, inventory, and appraisement of community property by the community administrator to the court and provides for the removal and the order of removal of a community administrator (Secs. 883B and 883C). The bill also sets forth provisions regarding the appointment of an attorney ad litem to represent the interest of an incapacitated spouse by the court (Sec. 883D). The bill requires a person, whose spouse is judicially declared to be incapacitated and who acquires the power to manage, control, and dispose of the entire community estate, to inform the court in writing of any suit filed by or on behalf of this person that is a dissolution of the marriage of the person and the person's incapacitated spouse, or names the incapacitated spouse as a defendant (Sec. 884A). EFFECTIVE DATE September 1, 2001. EXPLANATION OF AMENDMENTS Committee Amendment No. 1 removes the provision that a spouse is authorized to file a sworn petition stating the facts that make it desirable for the petitioning spouse to manage, control, and dispose of community property described or defined in the petition that would otherwise be subject to the sole or joint management, control, and disposition of the other spouse if because of physical or mental incapacity, the other spouse is unable to manage, control, or dispose of the community property subject to that spouse's sole or joint management, control, and disposition (Sec. 3.301, Family Code). The amendment also provides for the sale of a separate or a community homestead of a spouse after the spouse is declared judicially incapacitated by a court exercising original jurisdiction over guardianship (Secs. 5.002 and 5.003, Family Code).