S.B. No. 506

OMNIBUS PROBATE BILL OF THE REAL ESTATE, PROBATE AND TRUST LAW SECTION OF THE STATE BAR OF TEXAS

Effective Date: September 1, 1997

AN ACT

relating to the administration of decedents' estates.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Subsection (b), Section 5A, Texas Probate Code, is amended to read as follows:

(b)  In proceedings in the statutory probate courts and districts courts, the phrases "appertaining to estates" and "incident to an estate" in this Code include the probate of wills, the issuance of letters testamentary and of administration, and the determination of heirship, and also include, but are not limited to, all claims by or against an estate, all actions for trial of title to land and for the enforcement of liens thereon, all actions for trial of the right of property, all actions to construe wills, the interpretation and administration of testamentary trusts and the applying of constructive trusts, and generally all matters relating to the settlement, partition, and distribution of estates of deceased persons. All statutory probate courts may, in the exercise of their jurisdiction, notwithstanding any other provisions of this Code, hear all suits, actions, and applications filed against or on behalf of any heirship proceeding or decedent's estate, including estates administered by an independent executor; all such suits, actions, and applications are appertaining to and incident to an estate for the purposes of this section. This subsection shall be construed in conjunction with and in harmony with Section 145 and all other sections of this Code dealing with independent executors, but shall not be construed so as to increase permissible judicial control over independent executors. All statutory probate courts shall have the same powers over independent executors that are exercisable by the district courts. In situations where the jurisdiction of a statutory probate court is concurrent with that of a district court, any cause of action appertaining to estates or incident to an estate shall be brought in a statutory probate court rather than in the district court.

SECTION 2.  Chapter I, Texas Probate Code, is amended by adding Section 10B to read as follows:

Sec. 10B.  COMMUNICATIONS OR RECORDS RELATING TO DECEDENT'S CONDITION BEFORE DEATH. Notwithstanding the Medical Practice Act (Article 4495b, Vernon's Texas Civil Statutes), a person who is a party to a will contest or a proceeding in which a party relies on the mental or testamentary capacity of a decedent before the decedent's death as part of the party's claim or defense is entitled to production of all communications or records relevant to the decedent's condition before the decedent's death. On receipt of a subpoena of communications or records under this section and proof of filing of the will contest or proceeding, by certified copy, the appropriate physician, hospital, medical facility, custodian of records, or other person in possession of the communications or records shall release the communications or records to the party requesting the records without further authorization.

SECTION 3.  Section 36, Texas Probate Code, is amended to read as follows:

Sec. 36.  Duty and Responsibility of Judge. (a)  It shall be the duty of each county and probate court to use reasonable diligence to see that personal representatives of estates being administered under orders of the court and other officers of the court perform the duty enjoined upon them by law pertaining to such estates. The judge shall annually, if in his opinion the same be necessary, examine the condition of each of said estates and the solvency of the bonds of personal representatives of estates. He shall, at any time he finds that the personal representative's bond is not sufficient to protect such estate, require such personal representatives to execute a new bond in accordance with law. In each case, he shall notify the personal representative, and the sureties on the bond, as provided by law; and should damage or loss result to estates through the gross neglect of the judge to use reasonable diligence in the performance of his duty, he shall be liable on his bond to those damaged by such neglect.

(b)  The court may request an applicant or court-appointed fiduciary to produce other information identifying an applicant, decedent, or personal representative, including social security numbers, in addition to identifying information the applicant or fiduciary is required to produce under this code. The court shall maintain the information required under this subsection, and the information may not be filed with the clerk.

SECTION 4.  Subdivision (1), Subsection (b), Section 42, Texas Probate Code, is amended to read as follows:

(1)  For the purpose of inheritance, a child is the child of his biological father if the child is born under circumstances described by Section 151.002 [12.02], Family Code, is adjudicated to be the child of the father by court decree as provided by Chapter 160 [13], Family Code, was adopted by his father, or if the father executed a statement of paternity as provided by Section 160.202 [13.22], Family Code, or a like statement properly executed in another jurisdiction, so that he and his issue shall inherit from his father and from his paternal kindred, both descendants, ascendants, and collaterals in all degrees, and they may inherit from him and his issue. A person claiming to be a biological child of the decedent, who is not otherwise presumed to be a child of the decedent, or claiming inheritance through a biological child of the decedent, who is not otherwise presumed to be a child of the decedent, may petition the probate court for a determination of right of inheritance. If the court finds by clear and convincing evidence that the purported father was the biological father of the child, the child is treated as any other child of the decedent for the purpose of inheritance and he and his issue may inherit from his paternal kindred, both descendants, ascendants, and collaterals in all degrees, and they may inherit from him and his issue. This section does not permit inheritance by a purported father of a child, whether recognized or not, if the purported father's parental rights have been terminated.

SECTION 5.  Subsection (a), Section 69, Texas Probate Code, is amended to read as follows:

(a)  If, after making a will, the testator is divorced or the testator's marriage is annulled, all provisions in the will in favor of the testator's former spouse, or appointing such spouse to any fiduciary capacity under the will or with respect to the estate or person of the testator's children, must be read as if the former spouse failed to survive the testator, and shall be null and void and of no effect unless the will expressly provides otherwise.

SECTION 6.  Subsection (a), Section 81, Texas Probate Code, is amended to read as follows:

(a)  For Probate of a Written Will. A written will shall, if within the control of the applicant, be filed with the application for its probate, and shall remain in the custody of the county clerk unless removed therefrom by order of a proper court. An application for probate of a written will shall state:

(1)  The name and domicile of each applicant.

(2)  The name, age if known, and domicile of the decedent, and the fact, time, and place of death.

(3)  Facts showing that the court has venue.

(4)  That the decedent owned real or personal property, or both, describing the same generally, and stating its probable value.

(5)  The date of the will, the name and residence of the executor named therein, if any, and if none be named, then the name and residence of the person to whom it is desired that letters be issued, and also the names and residences of the subscribing witnesses, if any.

(6)  Whether a child or children born or adopted after the making of such will survived the decedent, and the name of each such survivor, if any.

(7)  That such executor or applicant, or other person to whom it is desired that letters be issued, is not disqualified by law from accepting letters.

(8)  Whether the decedent was ever divorced, and if so, when and from whom.

(9)  [The social security number of the applicant and of the decedent.

[(10)]  Whether the state, a governmental agency of the state, or a charitable organization is named by the will as a devisee.

The foregoing matters shall be stated and averred in the application to the extent that they are known to the applicant, or can with reasonable diligence be ascertained by him, and if any of such matters is not stated or averred in the application, the application shall set forth the reason why such matter is not so stated and averred.

SECTION 7.  Section 82, Texas Probate Code, is amended to read as follows:

Sec. 82.  CONTENTS OF APPLICATION FOR LETTERS OF ADMINISTRATION. An application for letters of administration when no will, written or oral, is alleged to exist shall state:

(a)  The name and domicile of the applicant, relationship to the decedent, if any, and that the applicant is not disqualified by law to act as administrator;

(b)  The name and intestacy of the decedent, and the fact, time and place of death;

(c)  Facts necessary to show venue in the court to which the application is made;

(d)  Whether the decedent owned real or personal property, with a statement of its probable value;

(e)  The name, age, marital status and address, if known, and the relationship, if any, of each heir to the decedent;

(f)  If known by the applicant at the time of the filing of the application, whether children were born to or adopted by the decedent, with the name and the date and place of birth of each;

(g)  If known by the applicant at the time of the filing of the application, whether the decedent was ever divorced, and if so, when and from whom; and

(h)  That a necessity exists for administration of the estate, alleging the facts which show such necessity[; and

[(i)  The social security number of the applicant and of the decedent if known].

SECTION 8.  Section 146, Texas Probate Code, is amended by amending Subsection (b) and adding Subsections (d) and (e) to read as follows:

(b)  Secured Claims for Money. Within six months after the date letters are granted or within four months after the date notice is received under Section 295, whichever is later, a creditor with a claim for money secured by real or personal property of the estate must give notice to [notify] the independent executor [by certified or registered mail] of the creditor's election to have the creditor's claim approved as a matured secured claim to be paid in due course of administration. If the election is not made, the claim is a preferred debt and lien against the specific property securing the indebtedness and shall be paid according to the terms of the contract that secured the lien, and the claim may not be asserted against other assets of the estate. The independent executor may pay the claim before the claim matures if paying the claim before maturity is in the best interest of the estate.

(d)  Notice Required of Unsecured Creditor. An unsecured creditor who has a claim for money against an estate and receives a notice under Section 294(d) shall give notice to the independent executor of the nature and amount of the claim not later than the 120th day after the date on which the notice is received or the claim is barred.

(e)  Placement of Notice. Notice required by Subsections (b) and (d) must be contained in:

(1)  a written instrument that is hand-delivered with proof of receipt or mailed by certified mail, return receipt requested, to the independent executor or the executor's attorney;

(2)  a pleading filed in a lawsuit with respect to the claim; or

(3)  a written instrument or pleading filed in the court in which the administration of the estate is pending.

SECTION 9.  Subsection (a), Section 234, Texas Probate Code, is amended to read as follows:

(a)  Powers To Be Exercised Under Order of the Court.  The personal representative of the estate of any person may, upon application and order authorizing same, renew or extend any obligation owing by or to such estate. When a personal representative deems it for the interest of the estate, he may, upon written application to the court, and by order granting authority:

(1)  Purchase or exchange property;

(2)  Take claims or property for the use and benefit of the estate in payment of any debt due or owing to the estate;

(3)  Compound bad or doubtful debts due or owing to the estate;

(4)  Make compromises or settlements in relation to property or claims in dispute or litigation;

(5)  Compromise or pay in full any secured claim which has been allowed and approved as required by law against the estate by conveying to the holder of such claim the real estate or personalty securing the same, in full payment, liquidation, and satisfaction thereof, and in consideration of cancellation of notes, deeds of trust, mortgages, chattel mortgages, or other evidences of liens securing the payment of such claim;

(6)  Abandon the administration of property of the estate that is burdensome or worthless. Abandoned real or personal property may be foreclosed by a secured party, trustee, or mortgagee without further order of the court.

SECTION 10.  Section 281, Texas Probate Code, is amended to read as follows:

Sec. 281.  EXEMPT PROPERTY LIABLE FOR CERTAIN DEBTS. The exempt property, other than the homestead or any allowance made in lieu thereof, shall be liable for the payment of Class 1 claims [the funeral expenses and the expenses of last sickness of the deceased, when claims are presented within the time prescribed therefor], but such property shall not be liable for any other debts of the estate.

SECTION 11.  Section 290, Texas Probate Code, is amended to read as follows:

Sec. 290.  FAMILY ALLOWANCE PREFERRED. The family allowance made for the support of the surviving spouse and minor children of the deceased shall be paid in preference to all other debts or charges against the estate, except Class 1 claims [expenses of the funeral and last sickness of the deceased].

SECTION 12.  Section 299, Texas Probate Code, is amended to read as follows:

Sec. 299.  TOLLING OF GENERAL STATUTES OF LIMITATION. The general statutes of limitation are tolled on the date:

(1)  a claim for money is filed or deposited with the clerk [(a)  By filing a claim which is legally allowed and approved]; or

(2)  suit is brought against the personal representative of an estate with respect to a claim of the estate that is not required to be presented to the personal representative [(b)  By bringing a suit upon a rejected and disapproved claim within ninety days after such rejection or disapproval].

SECTION 13.  Subsections (e), (f), (i), and (j), Section 306, Texas Probate Code, are amended to read as follows:

(e)  Payment of Maturities on Preferred Debt and Lien Claims. If property securing a claim allowed, approved, and fixed under Paragraph (2) of Subsection (a) hereof is not sold or distributed within six months from the date letters are granted, the representative of the estate shall promptly pay all maturities which have accrued on the debt according to the terms thereof, and shall perform all the terms of any contract securing same. If the representative defaults in such payment or performance, on application of the claimholder, the court shall:

(1)  require the sale of said property subject to the unmatured part of such debt and apply the proceeds of the sale to the liquidation of the maturities;

(2)  require the sale of the property free of the lien and apply the proceeds to the payment of the whole debt; or

(3)  authorize foreclosure by the claimholder as provided by Subsections [under Subsection] (f) through (k) of this section.

(f)  Foreclosure of Preferred Liens. An application by a claimholder under Subsection (e) of this section [If the court authorizes a claimholder] to foreclose the claimholder's lien or security interest on property securing a claim that has been allowed, approved, and fixed under Paragraph (2) of Subsection (a) of this section shall be[, the claimholder shall file with the court an application] supported by affidavit of the claimholder that:

(1)  describes the property or part of the property to be sold by foreclosure;

(2)  describes the amounts of the claimholder's outstanding debt;

(3)  describes the maturities that have accrued on the debt according to the terms of the debt;

(4)  describes any other debts secured by a mortgage, lien, or security interest against the property that are known by the claimholder;

(5)  contains a statement that the claimholder has no knowledge of the existence of any debts secured by the property other than those described by the application; and

(6)  requests permission for the claimholder to foreclose the claimholder's mortgage, lien, or security interest.

(i)  Hearing.  (1)  At the hearing, if the court finds that there is a default in payment or performance under the contract that secures the payment of the claim, the court shall:

(A)  require the sale of the property subject to the unmatured part of the debt and apply the proceeds of the sale to the liquidation of the maturities;

(B)  require the sale of the property free of the lien and apply the proceeds to the payment of the whole debt; or

(C)  authorize foreclosure by the claimholder as provided by Subsection (f) of this section.

(2)  When the court grants a claimholder the right of foreclosure, the court shall authorize [enter an order granting] the claimholder [permission] to foreclose the claimholder's mortgage, lien, or security interest in accordance with the provisions of the document creating the mortgage, lien, or security interest or in any other manner allowed by law. In the discretion of the court and based on the evidence presented at the hearing, the court may fix a minimum price for the property to be sold by foreclosure that does not exceed the fair market value of the property. If the court fixes a minimum price, the property may not be sold at the foreclosure sale for a lower price.

(j)  Appeal. Any person interested in the estate may appeal an order issued under Subsection (i)(1)(C) [(i)] of this section.

SECTION 14.  Subsection (a), Section 450, Texas Probate Code, is amended to read as follows:

(a)  Any of the following provisions in an insurance policy, contract of employment, bond, mortgage, promissory note, deposit agreement, employees' trust, retirement account, deferred compensation arrangement, custodial agreement, pension plan, trust agreement, conveyance of real or personal property, securities, accounts with financial institutions as defined in Part 1 of this chapter, or any other written instrument effective as a contract, gift, conveyance, or trust is deemed to be nontestamentary, and this code does not invalidate the instrument or any provision:

(1)  that money or other benefits theretofore due to, controlled, or owned by a decedent shall be paid after his death to a person designated by the decedent in either the instrument or a separate writing, including a will, executed at the same time as the instrument or subsequently;

(2)  that any money due or to become due under the instrument shall cease to be payable in event of the death of the promisee or the promissor before payment or demand; or

(3)  that any property which is the subject of the instrument shall pass to a person designated by the decedent in either the instrument or a separate writing, including a will, executed at the same time as the instrument or subsequently.

SECTION 15. Part 4, Chapter XI, Texas Probate Code, as added by S.B. No. 504, Acts of the 75th Legislature, Regular Session, 1997, is repealed.

SECTION 16.  This Act takes effect September 1, 1997, and applies only to the estate of a person who dies on or after that date. An estate of a person who dies before the effective date of this Act is governed by the law in effect on the date of the person's death, and the former law is continued in effect for that purpose.

SECTION 17.  The importance of this legislation and the crowded condition of the calendars in both houses create an emergency and an imperative public necessity that the constitutional rule requiring bills to be read on three several days in each house be suspended, and this rule is hereby suspended.


Courtesy of Glenn M. Karisch, Ikard & Golden, P. C., Austin, Texas. This page was last revised on May 26, 1997.