C.S.H.B. 1470 78(R) BILL ANALYSIS C.S.H.B. 1470 By: Hartnett Judicial Affairs Committee Report (Substituted) BACKGROUND AND PURPOSE The Real Estate, Probate, and Trust Law Section of the State Bar of Texas studies the need for statutory changes in the guardianship area. It receives comments and suggestions from its members and from others active in this area of the law. Judges and academics also participate in these efforts. This bill consists of changes in guardianship law for which there is a broad consensus. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 1470 amends the Probate Code to provide that in those counties in which there is no statutory probate court or statutory county court exercising probate jurisdiction, a statutory probate judge or a district court judge assigned to a contested guardianship matter has for that matter the jurisdiction and authority granted by the Probate Code. On resolution of a contested guardianship matter to which the statutory probate court judge or district court judge has been assigned, including an appeal of that matter, the judge shall transfer the resolved portion of the case to the county court for further proceedings. The bill also provides that the county court shall continue to exercise jurisdiction over the management of the guardianship with the exception of the contested matter until final disposition of the contested matter is made by the assigned judge or the district court. The bill clarifies that in those counties in which there is a statutory probate court, all applications, petitions, and motions regarding guardianships, mental health matters, or other matters addressed by the Guardianship chapter of the Probate Code shall be filed and heard in the statutory probate court. The bill provides that a statutory probate court has concurrent jurisdiction with the district court in all personal injury, survival or wrongful death actions by or against a person in the person's capacity as guardian and in all actions involving a personal representative of a guardianship estate in which each other party aligned with the personal representative is not an interested person in that estate. The bill also provides that a statutory probate court has jurisdiction over any matter appertaining to an estate or incident to an estate and has jurisdiction over any cause of action in which a guardian in a guardianship proceeding pending in the statutory probate court is a party; also, a statutory probate court may exercise the pendent and ancillary jurisdiction necessary to promote judicial efficiency and economy. The bill provides that the phrases appertaining to estates and incident to an estate also apply to the collection of a guardianship estate. The bill clarifies language relating to the transfer to statutory probate court of a cause of action relating to a guardianship in which a guardian, ward, or proposed ward in a guardianship pending in the statutory probate court is a party. The bill allows persons other than court clerks to mail the required notices regarding applications for guardianship and allows any form of mailing that provides proof of delivery. The bill adds persons to whom notice must be sent and mandates certain affidavits from applicants regarding notice. The bill allows courts to award attorney's fees to a person who filed an application for the appointment of another suitable person as guardian of the proposed ward from funding sources provided by existing law. The bill requires that certain additional names of relatives and/or next of kin be stated on an application for the appointment of a guardian but states that this information must be added only if known by the applicant. In cases of mental retardation, current law mandates that a proposed ward be examined by a certain type of physician or psychologist not earlier than 6 months before the date of a hearing to appoint a guardian for the proposed ward. The bill extends this period to 24 months. The bill removes a duplicative provision from Section 745(c) of the Probate Code and clarifies that the amount which may be paid to and managed by the county clerk is $100,000. The bill also deletes certain references to a decedent or decedent's estate from Probate Code provisions relating to guardianships or guardianship estates. The bill tightens the time required for an inventory of the ward's property by the guardian from 90 days to 30 days after the date the guardian qualifies as guardian, and also requires successor guardians to complete the required inventory in 30 days rather than 90 days. The bill expands certain requirements regarding the guardian's management of the ward's property. The bill allows the guardian to establish a trust in accordance with the 42 U.S. Code Section 1396p(d)(4)(B) for the purpose of the ward's eligibility for medical assistance under Chapter 32, Human Resources Code. The bill mandates certain procedures for a guardian to request a monthly allowance to be expended from the ward's estate in certain circumstances involving the education and maintenance of the ward, including situations when expenditures exceed the monthly allowance. The bill raises the amount a guardian may pay to a commission merchant for the sale of livestock to 5% from 3%. The bill mandates that a guardian keep a ward's estate invested under certain circumstances and it clarifies the standards for such investments, and allows a court to modify or eliminate the standard required on a showing by clear and convincing evidence that the modification or elimination is in the best interests of the ward and the ward's estate. The bill provides that the guardian may retain, without court approval, any property received into the guardianship estate at its inception (or added by gift, devise, inheritance, mutation or increase) for one year after the date of such receipt - without regard to diversification of investments and without liability for depreciation or loss resulting from the retention. The guardian must manage the retained assets as a person of ordinary prudence, discretion and intelligence. The bill also sets forth procedures for making investments and retaining estate assets. The bill also details provisions for loans by the guardian from the funds of the estate. The bill defines what constitutes a reasonable rate of interest, limits the guardian's personal liability for losses under certain circumstances, and requires the guardian to file a written report with the court within 30 days of making a loan from estate proceeds. The bill also sets forth provisions for a guardian's investment of estate proceeds in real estate. The bill provides for the liability of a guardian who fails to invest or lend estate assets in the manner provided by this bill and other law, and modifies certain provisions relating to the discharge of a guardian. The bill provides that it does not partition community property between an incapacitated spouse and a spouse who is not incapacitated and sets forth certain procedures relating to the administration of property of an incapacitated spouse. The bill amends the Penal Code to provide that a person commits a state jail felony offense if he or she takes, retains or conceals a ward when the person knows that the person's taking, retention, or concealment interferes with a possessory right with respect to the ward. However, it is an affirmative defense to prosecution that the taking, retention or concealment of the ward was authorized by Subtitle E, Title 5, Family Code, or Chapter 48, Human Resources Code. EFFECTIVE DATE September 1, 2003. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute deletes certain jurisdictional provisions contained in the original. The substitute provides that in those counties in which there is no statutory probate court or statutory county court exercising probate jurisdiction, a statutory probate judge or a district court judge assigned to a contested guardianship matter has for that matter the jurisdiction and authority granted by the Probate Code. On resolution of a contested guardianship matter to which the statutory probate court judge or district court judge has been assigned, including an appeal of that matter, the judge shall transfer the resolved portion of the case to the county court for further proceedings. The substitute also provides that the county court shall continue to exercise jurisdiction over the management of the guardianship with the exception of the contested matter until final disposition of the contested matter is made by the assigned judge or the district court. The substitute clarifies that in those counties in which there is a statutory probate court, all applications, petitions, and motions regarding guardianships, mental health matters, or other matters addressed by the Guardianship chapter of the Probate Code shall be filed and heard in the statutory probate court. The substitute provides that a statutory probate court has concurrent jurisdiction with the district court in all personal injury, survival or wrongful death actions by or against a person in the person's capacity as guardian and in all actions involving a personal representative of a guardianship estate in which each other party aligned with the personal representative is not an interested person in that estate. The substitute also provides that a statutory probate court has jurisdiction over any matter appertaining to an estate or incident to an estate and has jurisdiction over any cause of action in which a guardian in a guardianship proceeding pending in the statutory probate court is a party; also, a statutory probate court may exercise the pendent and ancillary jurisdiction necessary to promote judicial efficiency and economy. The substitute provides that the phrases appertaining to estates and incident to an estate also apply to the collection of a guardianship estate. The original stated that bond would not be required to be given by certain categories of guardians. The substitute deletes this provision. The substitute allows the guardian to establish a trust in accordance with the 42 U.S. Code Section 1396p(d)(4)(B) for the purpose of the ward's eligibility for medical assistance under Chapter 32, Human Resources Code. The original permitted the guardian to delegate investment authority. The substitute deletes this provision. The original required a guardian to file a written application to a court for an order relating to an investment plan for estate assets within one year of qualifying as guardian. The substitute changes this time to six months or another date specified by the court. The substitute deletes certain references to a decedent or a decedent's estate from Probate Code provisions relating to guardianships or guardianship estates. The substitute's provisions amending the Penal Code were to amend the Probate Code in the original. The substitute deletes a provision contained in the original which would have also made it a criminal offense to knowingly entice or persuade a ward to leave the ward's legal domicile if done so with the intent to interfere with the possessory right with respect to a ward.