By Corte H.B. No. 19
77R524 KLA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to personal representatives of decedents' estates and the
1-3 regulation of attorneys representing those personal
1-4 representatives.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subtitle G, Title 1, Government Code, is amended
1-7 by adding Chapter 85 to read as follows:
1-8 CHAPTER 85. REGULATION OF ATTORNEYS
1-9 REPRESENTING PERSONAL REPRESENTATIVES OF DECEDENTS' ESTATES
1-10 SUBCHAPTER A. GENERAL PROVISIONS
1-11 Sec. 85.001. DEFINITIONS. In this chapter:
1-12 (1) "Attorney" means a person who is licensed to
1-13 practice law in this state.
1-14 (2) "Estate" has the meaning assigned by Section 3,
1-15 Texas Probate Code.
1-16 (3) "Personal representative" has the meaning assigned
1-17 by Section 3, Texas Probate Code.
1-18 (4) "Representing attorney" means an attorney to whom
1-19 this chapter applies.
1-20 Sec. 85.002. APPLICABILITY. (a) Except as provided by
1-21 Subsection (b), this chapter applies only to an attorney who is
1-22 retained to provide legal services to a person in the person's
1-23 capacity as a personal representative of a decedent's estate.
1-24 (b) Sections 85.052 and 85.053 do not apply to an attorney
2-1 who is retained to defend the personal representative of a
2-2 decedent's estate in an action for a breach of the representative's
2-3 fiduciary duty after the breach is alleged to have occurred.
2-4 Sec. 85.003. CONSTRUCTION. Nothing in this chapter may be
2-5 construed as creating an attorney-client relationship between an
2-6 attorney who represents a personal representative of the estate of
2-7 a decedent and an heir or beneficiary of the decedent.
2-8 Sec. 85.004. EFFECT ON OTHER LAW. (a) This chapter controls
2-9 to the extent of any conflict between this chapter and the Texas
2-10 Rules of Evidence, the Texas Disciplinary Rules of Professional
2-11 Conduct, or any other law governing an attorney-client
2-12 relationship.
2-13 (b) Notwithstanding Section 81.024, the supreme court may
2-14 not amend or adopt rules in conflict with this chapter.
2-15 (Sections 85.005-85.050 reserved for expansion
2-16 SUBCHAPTER B. DUTIES OF AND PROHIBITIONS ON ATTORNEYS
2-17 Sec. 85.051. DISCLOSURE OF DUTIES AND PROHIBITIONS REQUIRED.
2-18 A representing attorney shall disclose to the personal
2-19 representative in writing the duties and prohibitions prescribed by
2-20 this subchapter.
2-21 Sec. 85.052. DISCLOSURE OF CERTAIN ACTIONS OR OMISSIONS OF
2-22 PERSONAL REPRESENTATIVE REQUIRED. (a) A representing attorney
2-23 shall disclose to each of the known or reasonably ascertainable
2-24 heirs or beneficiaries of the decedent and to the court in which
2-25 the estate is pending:
2-26 (1) any action taken or omission made by the personal
2-27 representative with respect to estate property that constitutes a
3-1 breach of the personal representative's fiduciary duty, including
3-2 the misuse, misappropriation, or unlawful conversion of estate
3-3 property; and
3-4 (2) any material misrepresentation made by the
3-5 personal representative to the court with respect to estate
3-6 property that adversely affects or has the potential to adversely
3-7 affect the value of the estate.
3-8 (b) The attorney shall make the disclosure required by this
3-9 section not later than the 10th day after the date the attorney
3-10 becomes aware of the action taken or omission or misrepresentation
3-11 made by the personal representative.
3-12 Sec. 85.053. ASSISTANCE OF CERTAIN CONDUCT PROHIBITED. (a)
3-13 In this section, "knowingly assist" includes a failure to disclose.
3-14 (b) A representing attorney may not knowingly assist the
3-15 personal representative in engaging in conduct described by Section
3-16 85.052.
3-17 Sec. 85.054. ACCEPTANCE OF PAYMENT FOR SERVICES FROM ESTATE
3-18 PROHIBITED UNDER CERTAIN CIRCUMSTANCES. (a) Except as provided by
3-19 Subsection (b), an attorney may not accept payment from a
3-20 decedent's estate for legal services provided by the attorney in
3-21 defending the decedent's personal representative in an action
3-22 brought by an heir or beneficiary of the decedent for breach of a
3-23 fiduciary duty.
3-24 (b) An attorney may accept payment from the estate for legal
3-25 services described by Subsection (a) if:
3-26 (1) the court in which the estate is pending
3-27 determines, after a preliminary hearing, that the personal
4-1 representative is likely to prevail in the action; and
4-2 (2) the personal representative posts a bond in an
4-3 amount determined by the court to be sufficient to pay the
4-4 attorney's fees in the action.
4-5 (Sections 85.055-85.100 reserved for expansion
4-6 SUBCHAPTER C. CAUSE OF ACTION
4-7 Sec. 85.101. CIVIL ACTION. (a) An heir or beneficiary of a
4-8 decedent may file on behalf of the estate an action against an
4-9 attorney who violates this chapter, other than Section 85.051.
4-10 (b) An heir or beneficiary must file an action under this
4-11 section in the court in which the estate is pending. If the estate
4-12 is closed, the heir or beneficiary must file the action in a
4-13 county court or district court in the county in which:
4-14 (1) the attorney provided legal services to the
4-15 personal representative; or
4-16 (2) the attorney's office is located.
4-17 (c) If an action authorized by this section is filed in the
4-18 court in which the estate is pending, the judge, on the motion of
4-19 any heir or beneficiary of the decedent, may transfer the action to
4-20 the district court located in the county in which the action was
4-21 filed.
4-22 (d) An heir or beneficiary must bring an action under this
4-23 section not later than the fourth anniversary of the date the cause
4-24 of action accrues.
4-25 Sec. 85.102. CERTAIN ACTIONS NOT AUTHORIZED. A personal
4-26 representative may not bring an action against the personal
4-27 representative's attorney for a breach of the attorney-client
5-1 privilege resulting from a duty required to be performed by the
5-2 attorney under this chapter.
5-3 Sec. 85.103. DAMAGES. (a) An attorney who violates Section
5-4 85.052, 85.053, or 85.054 is liable:
5-5 (1) to the decedent's estate for actual damages; and
5-6 (2) to the heir or beneficiary bringing the action on
5-7 behalf of the estate for exemplary damages and reasonable expenses
5-8 incurred in filing the action, including reasonable attorney's
5-9 fees, reasonable expert witness fees, and deposition expenses.
5-10 (b) Actual damages for a violation of Section 85.052 or
5-11 85.053 include:
5-12 (1) an amount equal to the attorney's fees charged to
5-13 and collected from the estate by the attorney for legal services
5-14 provided on or after the date the act or omission that constituted
5-15 the violation occurred; and
5-16 (2) an amount equal to the amount by which the value
5-17 of the estate property was depleted as a result of the personal
5-18 representative's breach of fiduciary duty or misrepresentation, as
5-19 appropriate, and the attorney's violation of Section 85.052 or
5-20 85.053.
5-21 (c) Actual damages for a violation of Section 85.054 include
5-22 all fees collected by the attorney in violation of that section.
5-23 The court shall order that all fees charged to the estate but not
5-24 yet collected by the attorney be canceled.
5-25 SECTION 2. Section 221(a), Texas Probate Code, is amended to
5-26 read as follows:
5-27 (a) Application to Resign. A personal representative who
6-1 wishes to resign his trust shall file with the clerk his written
6-2 application to the court to that effect, accompanied by a full and
6-3 complete exhibit and final account, duly verified, showing the true
6-4 condition of the estate entrusted to his care. A personal
6-5 representative who filed an application for resignation with the
6-6 court but has not been discharged may not sell, distribute, or
6-7 otherwise dispose of estate property except as provided by an order
6-8 of the court.
6-9 SECTION 3. Section 222(c), Texas Probate Code, is amended to
6-10 read as follows:
6-11 (c) Order of Removal. The order of removal shall state the
6-12 cause thereof. It shall require that any letters issued to the one
6-13 removed shall, if he has been personally served with citation, be
6-14 surrendered, and that all such letters be cancelled of record,
6-15 whether delivered or not. The order of removal shall prohibit the
6-16 personal representative from selling, distributing, or otherwise
6-17 disposing of estate property for any purpose except as provided in
6-18 the order. It shall further require, as to all the estate
6-19 remaining in the hands of a removed person, delivery thereof to the
6-20 person or persons entitled thereto, or to one who has been
6-21 appointed and has qualified as successor representative.
6-22 SECTION 4. (a) This Act takes effect September 1, 2001.
6-23 (b) Chapter 85, Government Code, as added by this Act,
6-24 applies only to an attorney retained by a personal representative
6-25 on or after the effective date of this Act. An attorney who is
6-26 retained by a personal representative before the effective date of
6-27 this Act is governed by the law in effect on the date the attorney
7-1 was retained, and the former law is continued in effect for that
7-2 purpose.
7-3 (c) Section 221(a), Texas Probate Code, as amended by this
7-4 Act, applies only to a personal representative who files an
7-5 application for resignation on or after the effective date of this
7-6 Act. A personal representative who files an application for
7-7 resignation before the effective date of this Act is governed by
7-8 the law in effect on the date the application was filed, and the
7-9 former law is continued in effect for that purpose.