79R662 KLA-F
By: Hartnett H.B. No. 1186
A BILL TO BE ENTITLED
AN ACT
relating to testamentary and nontestamentary transfers of property
and other benefits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 58b(a), Texas Probate Code, is amended
to read as follows:
(a) A devise or bequest of property in a will is void if the
devise or bequest is made to:
(1) an attorney who prepares or supervises the
preparation of the will;
(2) a parent, descendant of a parent, or employee of
the attorney described by Subdivision (1) of this subsection; or
(3) a spouse of an individual described by Subdivision
(1) or (2) of this subsection [a devise or bequest of property in a
will to an heir or employee of the attorney who prepares or
supervises the preparation of the will is void].
SECTION 2. Chapter IV, Texas Probate Code, is amended by
adding Section 71A to read as follows:
Sec. 71A. NO RIGHT TO EXONERATION OF DEBTS; EXCEPTION. (a)
Except as provided by Subsection (b) of this section, a specific
devise passes to the devisee charged with each debt secured by the
property that exists on the date of the testator's death. The
devisee has no right to exoneration from the testator's estate for
payment of the debt.
(b) A specific devise does not pass to the devisee charged
with a debt described by Subsection (a) of this section if the will
in which the devise is made specifically states that the devise
passes without being subject to the debt. A general provision in
the will stating that debts are to be paid is not a specific
statement for purposes of this subsection.
(c) Subsection (a) of this section does not affect the
rights of creditors provided under this code or the rights of other
persons or entities provided under Part 3, Chapter VIII, of this
code, except that if a creditor elects to have a debt described by
Subsection (a) of this section allowed and approved as a matured
secured claim, the claim may only be paid in accordance with Section
306(c-1) of this code. To the extent of a conflict between this
section and another provision of this code specified by this
subsection, the other provision of this code prevails.
SECTION 3. Section 156, Texas Probate Code, is amended to
read as follows:
Sec. 156. LIABILITY OF COMMUNITY PROPERTY FOR DEBTS. The
community property subject to the sole or joint management,
control, and disposition of a spouse during marriage continues to
be subject to the liabilities of that spouse upon death. In
addition, the interest that the deceased spouse owned in any other
nonexempt community property passes to his or her heirs or devisees
charged with the debts which were enforceable against such deceased
spouse prior to his or her death, except as provided by Section
71A(b) of this code. In the administration of community estates,
the survivor or personal representative shall keep a separate,
distinct account of all community debts allowed or paid in the
administration and settlement of such estate.
SECTION 4. Section 271, Texas Probate Code, is amended to
read as follows:
Sec. 271. EXEMPT PROPERTY TO BE SET APART. (a) Unless an
affidavit is filed under Subsection (b) of this section,
immediately after the inventory, appraisement, and list of claims
have been approved, the court shall, by order, set apart:
(1) the homestead for the use and benefit of the
surviving spouse and minor children; and
(2) all other property of the estate that is exempt
from execution or forced sale by the constitution and laws of this
state for the use and benefit of the surviving spouse and minor
children and unmarried children remaining with the family of the
deceased[, all such property of the estate as is exempt from
execution or forced sale by the constitution and laws of the state].
(b) Before the approval of the inventory, appraisement, and
list of claims:
(1) [,] a surviving spouse or[,] any person who is
authorized to act on behalf of minor children of the deceased[, or
any unmarried children remaining with the family of the deceased]
may apply to the court to have exempt property, including the
homestead, set aside by filing an application and a verified
affidavit listing all of the property that the applicant claims is
exempt; and
(2) any unmarried children remaining with the family
of the deceased may apply to the court to have all exempt property
other than the homestead set aside by filing an application and a
verified affidavit listing all of the other property that the
applicant claims is exempt.
(c) An [The] applicant under Subsection (b) of this section
bears the burden of proof by a preponderance of the evidence at any
hearing on the application. The court shall set aside property of
the decedent's estate that the court finds is exempt.
SECTION 5. Section 272, Texas Probate Code, is amended to
read as follows:
Sec. 272. TO WHOM DELIVERED. The exempt property set apart
to the surviving spouse and children shall be delivered by the
executor or administrator without delay as follows: (a) If there be
a surviving spouse and no children, or if the children be the
children of the surviving spouse, the whole of such property shall
be delivered to the surviving spouse. (b) If there be children and
no surviving spouse, such property, except the homestead, shall be
delivered to such children if they be of lawful age, or to their
guardian if they be minors. (c) If there be children of the
deceased of whom the surviving spouse is not the parent, the share
of such children in such exempted property, except the homestead,
shall be delivered to such children if they be of lawful age, or to
their guardian, if they be minors. (d) In all cases, the homestead
shall be delivered to the surviving spouse, if there be one, and if
there be no surviving spouse, to the guardian of the minor children
[and unmarried children, if any, living with the family].
SECTION 6. Section 306, Texas Probate Code, is amended by
amending Subsections (a) and (c) and adding Subsection (c-1) to
read as follows:
(a) Specifications of Claim. When a secured claim for money
against an estate is presented, the claimant shall specify therein,
in addition to all other matters required to be specified in claims:
(1) Whether it is desired to have the claim allowed and
approved as a matured secured claim, which shall [to] be paid in due
course of administration if the claim is[, in which event it shall
be so paid if] allowed and approved or, if Subsection (c-1) of this
section applies, as provided by that subsection; or
(2) Whether it is desired to have the claim allowed,
approved, and fixed as a preferred debt and lien against the
specific property securing the indebtedness and paid according to
the terms of the contract which secured the lien, in which event it
shall be so allowed and approved if it is a valid lien; provided,
however, that the personal representative may pay said claim prior
to maturity if it is for the best interest of the estate to do so.
(c) Matured Secured Claims. Unless Subsection (c-1) of this
section applies, if [If] a claim has been allowed and approved as a
matured secured claim under Paragraph (1) of Subsection (a) of this
section, the claim shall be paid in due course of administration.
The [and the] secured creditor is not entitled to exercise any other
remedies in a manner that prevents the preferential payment of
claims and allowances described by Paragraphs (1) through (3) of
Section 320(a) of this code.
(c-1) If a claimant presents a secured claim against an
estate for a debt that would otherwise pass with the property
securing the debt to one or more devisees in accordance with Section
71A(a) of this code and the claim is allowed and approved as a
matured secured claim under Subsection (a)(1) of this section, the
personal representative shall collect from each devisee of the
property securing the debt an amount equal to a fraction
representing the devisee's ownership interest in the property,
multiplied by the amount of the debt. If the personal
representative is unable to collect from the devisees an amount
sufficient to pay the debt, the personal representative shall sell
the property securing the debt, subject to Part 5 of this chapter.
The personal representative shall use the sale proceeds to pay the
debt and any expenses associated with the sale and shall distribute
the remaining sale proceeds to each devisee in an amount equal to a
fraction representing the devisee's ownership interest in the
property, multiplied by the amount of the remaining sale proceeds.
If the sale proceeds are insufficient to pay the debt and any
expenses associated with the sale, the difference between the sum
of the amount of the debt and the expenses associated with the sale
and the sale proceeds is a Class 8 claim under Section 322 of this
code.
SECTION 7. Section 322, Texas Probate Code, is amended to
read as follows:
Sec. 322. CLASSIFICATION OF CLAIMS AGAINST ESTATES OF
DECEDENT. Claims against an estate of a decedent shall be
classified and have priority of payment, as follows:
Class 1. Funeral expenses and expenses of last sickness for a
reasonable amount to be approved by the court, not to exceed a total
of Fifteen Thousand Dollars, with any excess to be classified and
paid as other unsecured claims.
Class 2. Expenses of administration and expenses incurred in
the preservation, safekeeping, and management of the estate,
including fees and expenses awarded under Section 243 of this code,
and unpaid expenses of administration awarded in a guardianship of
the decedent.
Class 3. Secured claims for money under Section 306(a)(1),
including tax liens, other than an allowed and approved matured
secured claim for a debt to which Section 306(c-1) of this code
applies, so far as the same can be paid out of the proceeds of the
property subject to such mortgage or other lien, and when more than
one mortgage, lien, or security interest shall exist upon the same
property, they shall be paid in order of their priority.
Class 4. Claims for the principal amount of and accrued
interest on delinquent child support and child support arrearages
that have been confirmed and reduced to money judgment, as
determined under Subchapter F, Chapter 157, Family Code.
Class 5. Claims for taxes, penalties, and interest due under
Title 2, Tax Code; Chapter 8, Title 132, Revised Statutes; Section
81.111, Natural Resources Code; the Municipal Sales and Use Tax Act
(Chapter 321, Tax Code); Section 451.404, Transportation Code; or
Subchapter I, Chapter 452, Transportation Code.
Class 6. Claims for the cost of confinement established by
the institutional division of the Texas Department of Criminal
Justice under Section 501.017, Government Code.
Class 7. Claims for repayment of medical assistance payments
made by the state under Chapter 32, Human Resources Code, to or for
the benefit of the decedent.
Class 8. All other claims.
SECTION 8. The Texas Probate Code is amended by adding
Chapter XI-A to read as follows:
CHAPTER XI-A. PROVISIONS APPLICABLE TO CERTAIN
TESTAMENTARY AND NONTESTAMENTARY TRANSFERS
Sec. 471. DEFINITIONS. In this chapter:
(1) "Disposition or appointment of property" includes
a transfer of property or provision of any other benefit to a
beneficiary under a governing instrument.
(2) "Divorced individual" means an individual whose
marriage has been dissolved, regardless of whether by divorce or
annulment.
(3) "Governing instrument" means:
(A) a deed, will, trust instrument, insurance
policy, or annuity contract;
(B) an account agreement or a security registered
with a provision for payment or transfer at death;
(C) a pension, profit-sharing agreement,
retirement account, or similar benefit plan;
(D) an instrument creating or exercising a power
of appointment;
(E) a power of attorney; or
(F) any other instrument that makes a disposition
of property or an appointment or that nominates a person to serve in
a fiduciary or representative capacity or any similar type of
instrument.
(4) "Revocable," with respect to a disposition,
appointment, provision, or nomination, means a disposition to,
appointment of, provision in favor of, or nomination of an
individual's spouse in a governing instrument executed by the
individual before the dissolution of the individual's marriage to
the spouse that the individual was solely empowered by law or by the
governing instrument to revoke, regardless of whether the
individual had the capacity to exercise the power at that time.
Sec. 472. REVOCATION OF CERTAIN TESTAMENTARY AND
NONTESTAMENTARY TRANSFERS ON DISSOLUTION OF MARRIAGE. (a) Except
as otherwise provided by a court order, the express terms of a
governing instrument executed by a divorced individual before the
individual's marriage was dissolved, or an express provision of a
contract relating to the division of the marital estate entered
into between a divorced individual and the individual's former
spouse before, during, or after the marriage, the dissolution of
the marriage:
(1) revokes the following:
(A) a revocable disposition or appointment of
property made by a divorced individual to the individual's former
spouse in a governing instrument executed before the dissolution of
the marriage;
(B) a provision in a governing instrument
executed by a divorced individual before the dissolution of the
marriage that confers a general or special power of appointment on
the individual's former spouse; and
(C) a nomination in a governing instrument
executed by a divorced individual before the dissolution of the
marriage that nominates the individual's former spouse to serve in
a fiduciary or representative capacity, including as a personal
representative, executor, trustee, conservator, agent, or
guardian; and
(2) severs the ownership interests of spouses in
property held by the spouses immediately before the dissolution of
the marriage as joint tenants with a right of survivorship and
converts that ownership interest to a tenancy in common.
(b) After the dissolution of a marriage, an interest granted
in a provision of a governing instrument that is revoked under
Subsection (a)(1)(A) or (B) of this section passes as if the former
spouse of the divorced individual who executed the governing
instrument disclaimed the interest granted in the provision, and an
interest granted in a provision of a governing instrument that is
revoked under Subsection (a)(1)(C) of this section passes as if the
former spouse died immediately before the dissolution of the
marriage.
Sec. 473. EFFECT OF SEVERANCE ON CERTAIN THIRD-PARTY
INTERESTS IN PROPERTY. Section 472(a)(2) of this code does not
affect a third-party interest in property described by that section
if the third party acquired the interest for value and relied in
good faith on evidence that title or ownership interest vested by
survivorship in the survivor of the former spouses whose marriage
was dissolved unless:
(1) a writing declaring that the joint tenancy with
right of survivorship was severed under Section 472(a)(2) of this
code is registered, filed, or recorded, as applicable, in the
appropriate records with respect to the kind of property and the
location of the property to which the writing relates; and
(2) the records described by Subdivision (1) of this
section are relied on as evidence of title or ownership interest in
the ordinary course of business involving that kind of property.
Sec. 474. LIABILITY FOR CERTAIN PAYMENTS, BENEFITS, AND
PROPERTY. (a) A bona fide purchaser of property from a divorced
individual's former spouse or a person who receives from a divorced
individual's former spouse a payment, benefit, or property in
partial or full satisfaction of an enforceable obligation:
(1) is not required by this chapter to return the
payment, benefit, or property; and
(2) is not liable under this chapter for the amount of
the payment or the value of the property or benefit.
(b) A divorced individual's former spouse who, not for
value, receives a payment, benefit, or property to which the former
spouse is not entitled as a result of Section 472(a) of this code:
(1) shall return the payment, benefit, or property to
the person who is otherwise entitled to the payment, benefit, or
property as provided by this chapter; or
(2) is personally liable to the person described by
Subdivision (1) of this subsection for the amount of the payment or
the value of the benefit or property received.
Sec. 475. CONFLICT WITH OTHER LAW. If a provision of this
chapter conflicts with a provision of Section 69 or 485A of this
code or Section 9.301 or 9.302, Family Code, the provision of
Section 69 or 485A of this code or Section 9.301 or 9.302, Family
Code, as applicable, prevails.
SECTION 9. (a) Section 58, Texas Probate Code, as amended
by this Act, applies only to a will executed on or after the
effective date of this Act. A will that is executed before the
effective date of this Act is governed by the law in effect on the
date the will was executed, and the former law is continued in
effect for that purpose.
(b) Sections 156, 271, 272, 306, and 322, Texas Probate
Code, as amended by this Act, and Section 71A, Texas Probate Code,
as added by this Act, apply only to the estate of a decedent who dies
on or after the effective date of this Act. The estate of a decedent
who dies before the effective date of this Act is governed by the
law in effect on the date of the decedent's death, and the former
law is continued in effect for that purpose.
(c) Chapter XI-A, Texas Probate Code, as added by this Act,
applies only to a governing instrument, as defined by Section 471,
Texas Probate Code, as added by this Act, that was executed before,
on, or after the effective date of this Act, by an individual whose
marriage is dissolved on or after the effective date of this Act. A
governing instrument that was executed by an individual whose
marriage is dissolved before the effective date of this Act is
governed by the law in effect on the date the marriage was
dissolved, and the former law is continued in effect for that
purpose.
SECTION 10. This Act takes effect September 1, 2005.