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Modifying Existing Guardianships So That 1997 Legislation Applies

The 75th Texas Legislature passed three bills affecting guardianships which will apply only to new guardianships (those created after September 1, 1997) unless old guardianships are modified:

  A court may modify a guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.  
  A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.  
  A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of Section 805, Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, guardian, or any other interested person or entity.  

Should existing guardianships be modified to make the new law applicable? Some of the provisions of these three bills are irrelevant to existing guardianships. For example, SB 997 eliminates the requirement that social security numbers be placed on the application for a guardianship. This change does not affect existing guardianships.

The following table summarizes the substantive changes made by SB 997, HB 1316 and HB 2189 affecting guardianships (listed in order of the probate code section amended) and the author's opinion about their probable effect on existing guardianships:

Section Bill Description of Change Effect on Existing Guardianships Modify?
609(c) SB 997 Fixes statutory reference to recodified provision in Family Code Existing guardianships would benefit from correct statutory reference, but this is not very important. Modification is beneficial but not important.
633(c) SB 997 Requires notice of guardianship application to persons named in declarations of guardian The only possible effect would be if an application to appoint a successor guardian is filed. Modification is not important.
671 SB 997 Judges may keep identifying information regarding applicants and guardians. (Quid pro quo for eliminating requirement for social security numbers on applications.) It may interfere with the smooth administration of this new system if existing guardianships are not included, but presumably judges can get and maintain this information regarding existing guardianships even if the statute doesn't apply. Modification is not important.
676A SB 997 Changes reference for designation of guardian by parents for child Irrelevant. Modification is irrelevant.
682 SB 997 Eliminates social security requirement on guardianship applications. Irrelevant except possibly for applications to appoint successor guardian. Modification is not important.
743 HB 2189 Annual reports of guardians of the person must state that the bond premium has been paid. Although this is part of HB 2189, HB 2189 states that this change applies to all reports filed on or after September 1, 1997. Modification is irrelevant.
749 HB 2189 Guardian's final account must include statements regarding payment of bond premiums, taxes, etc. Although this is part of HB 2189, HB 2189 states that this change applies to all accounts filed on or after September 1, 1997. Modification is irrelevant.
774 SB 997 Guardian may abandon worthless or burdensome property with court order. Modification is potentially important, although modification can be postponed until application to abandon property is filed since a court order is required anyway. Modification is important.
776A SB 997 Establishes procedure and criteria for ordering payments to support ward's spouse or dependents. Modification is needed to make this procedure and these criteria apply. Modification is important.
783 SB 997 Changes erroneous reference from "decedent" to "ward" in connection with notices to creditors, etc. Irrelevant if more than one month has passed since the guardian's letters were granted, unless a successor guardian is later appointed. Modification is beneficial but not important.
805 HB 2189 Establishes superpriority for payment of administrative claims in an insolvent guardianship estate. Modification is very important. Without modification, claims for the ward's care and maintenance, expenses of last illness and funeral expenses come before administrative claims. With modification, administrative claims leapfrog over those competing claims. Modification is very important, although asking the Court to modify for this reason alone raises fiduciary issues (putting guardian and attorney before ward, etc.). Better to ask for modification now (right after statute passes), rather than waiting for competing creditors claims to arise.
856 HB 1316 Guardian can invest in the Texas Tomorrow Fund with court approval. It is probably a good idea to modify existing guardianships so that this option is available, but it is not essential since a court order approving this investment is required. Modification is beneficial but not essential. If assets are actually invested in Texas Tomorrow Fund, existing guardianships should be modified.
865 SB 997 Procedure for tax-motivated gifts improved and list of permissible recipients is expanded. Modification is very important of there is a potential taxable estate. Modification is important, and it is better to modify now (right after statute passes), rather than waiting for the time when gifts are to be made, when there may be conflicts over who is entitled to the gifts.

It is the author's opinion that, while many of the changes are irrelevant or unimportant with respect to existing guardianships, there are enough important changes that attorneys representing guardians promptly should seek modification of prior guardianships for purposes of all three statutes. This is particularly true of the changes to Section 805 (affecting the priority of claims in insolvent guardianships) and Section 865 (regarding tax-motivated gifts). By going forward with a modification request now, when the statutes have just passed, potential conflicts and breach of fiduciary duty issues may be avoided later.

Ideally the courts supervising guardianships will enter blanket, administrative orders modifying guardianships to conform with the new legislation. Judge Guy Herman of Travis County Probate Court No. 1 has indicated that he intends to do so. Attached hereto is a proposed form of a blanket administrative order. By entering such an order, judges can assure that all guardianships under their supervision are governed by the same laws, and judges can take the monkey off the guardians' (and the guardians' attorneys') back to seek and obtain modification in multiple guardianships.

If the court supervising a particular guardianship does not enter a blanket order, the forms attached hereto for applications for and orders modifying existing guardianships may be used.

 

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Copyright 1998 by Glenn M. Karisch     Last Revised June 11, 1998  

CAUSE NO. _________

GUARDIANSHIP OF [WARD'S NAME], IN THE _____________ COURT OF

AN INCAPACITATED PERSON _____________ COUNTY, TEXAS

APPLICATION FOR MODIFICATION OF GUARDIANSHIP TO CONFORM WITH 1997 LEGISLATION

[Guardian's Name] ("Guardian"), guardian of the person and estate of [Ward's Name] ("Ward"), an incapacitated person, files this application for modification of the guardianship of the person and estate of Ward (the "Guardianship") to conform with 1997 legislation as described below. In support of this application, Guardian would show the Court as follows:

1. The Guardianship was in existence on September 1, 1997.

2. The 75th Texas Legislature enacted three bills affecting guardianships which permit the Court to modify guardianships in effect on September 1, 1997, to conform to the requirements of the new legislation:

a. SB 997 (Acts, 75th Legislature, Regular Session, Chapter 77) ("SB 997"), which provides in part as follows:

A court may modify a guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.

b. HB 1316 (Acts, 75th Legislature, Regular Session, Chapter 434) ("HB 1316"), which provides in part as follows:

A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.

c. HB 2189 (Acts, 75th Legislature, Regular Session, Chapter 1403) ("HB 2189"), which provides in part as follows:

A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of Section 805, Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, guardian, or any other interested person or entity.

3. Each of these three bills represents an improvement over the prior law of this state regarding guardianships. It is in the best interests of both Ward and Guardian if the Guardianship is modified to conform with the new legislation.

Prayer

Guardian prays that the Court will grant this application; that the Court will modify the Guardianship to conform with the requirements of the Texas Probate Code, as amended by SB 997, HB 1316 and HB 2189; and that the Court will grant to Guardian such other relief to which Guardian may justly be entitled.

Respectfully submitted,

[Signature Block]

ATTORNEY FOR [GUARDIAN'S NAME], GUARDIAN

CAUSE NO. _________

GUARDIANSHIP OF [WARD'S NAME], IN THE _____________ COURT OF

AN INCAPACITATED PERSON _____________ COUNTY, TEXAS

ORDER MODIFYING GUARDIANSHIP TO CONFORM WITH 1997 LEGISLATION

On this day the Court considered the application filed by [Guardian's Name] ("Guardian"), guardian of the person and estate of [Ward's Name] ("Ward"), an incapacitated person, for modification of the guardianship of the person and estate of Ward (the "Guardianship") to conform with 1997 legislation. The Court finds that:

1. The Guardianship was in existence on September 1, 1997.

2. The 75th Texas Legislature enacted three bills affecting guardianships which permit the Court to modify guardianships in effect on September 1, 1997, to conform to the requirements of the new legislation:

a. SB 997 (Acts, 75th Legislature, Regular Session, Chapter 77) ("SB 997"), which provides in part as follows:

A court may modify a guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.

b. HB 1316 (Acts, 75th Legislature, Regular Session, Chapter 434) ("HB 1316"), which provides in part as follows:

A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.

c. HB 2189 (Acts, 75th Legislature, Regular Session, Chapter 1403) ("HB 2189"), which provides in part as follows:

A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of Section 805, Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, guardian, or any other interested person or entity.

3. Each of these three bills represents an improvement over the prior law of this state regarding guardianships. It is in the best interests of both Ward and Guardian if the Guardianship is modified to conform with the new legislation.

IT IS, THEREFORE, ORDERED that the Guardianship is modified to conform with the requirements of the Texas Probate Code, as amended by SB 997, HB 1316 and HB 2189.

SIGNED this _________ day of ____________________, 1997.

__________________________________________

JUDGE PRESIDING

IN THE _____________ COURT OF _______________ COUNTY, TEXAS

ADMINISTRATIVE ORDER AFFECTING ALL GUARDIANSHIPS IN EFFECT ON SEPTEMBER 1, 1997

The Court, on its own motion, enters this administrative order regarding 1997 legislation affecting guardianships. This order shall apply to each guardianship under the Court's supervision which is in effect on September 1, 1997.

The 75th Texas Legislature enacted three bills affecting guardianships which permit the Court to modify guardianships in effect on September 1, 1997, to conform to the requirements of the new legislation:

SB 997 (Acts, 75th Legislature, Regular Session, Chapter 77) ("SB 997"), which provides in part as follows:

A court may modify a guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.

HB 1316 (Acts, 75th Legislature, Regular Session, Chapter 434) ("HB 1316"), which provides in part as follows:

A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of the Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, the guardian, or any other interested person or entity.

HB 2189 (Acts, 75th Legislature, Regular Session, Chapter 1403) ("HB 2189"), which provides in part as follows:

A court may modify any guardianship in effect on September 1, 1997, to conform with the requirements of Section 805, Texas Probate Code, as amended by this Act, on the court's own motion or on application by the ward, guardian, or any other interested person or entity.

The Court finds that each of these three bills represents an improvement over the prior law of this state and that it is in the best interests of the wards of this Court and their guardians if existing guardianships are modified to conform with the new legislation. The Court also finds that modification of existing guardianships to conform with the new legislation will promote judicial efficiency and economy, since all guardianships supervised by this Court regardless of their dates of creation will be governed by the same law.

IT IS, THEREFORE, ORDERED that, effective September 1, 1997, each guardianship under this Court's supervision which is in effect on September 1, 1997, is hereby modified to conform with the requirements of the Texas Probate Code, as amended by SB 997, HB 1316 and HB 2189.

SIGNED this _________ day of ____________________, 1997.

__________________________________________

JUDGE PRESIDING