Texas Legislative Update — 1999

A Report on Probate- and Trust-Related Legislation

In the 76th Texas Legislature

GLENN M. KARISCH

Barnes & Karisch, P. C.

2901-D Bee Caves Road

Austin, Texas 78746

(512) 328-8355/FAX (512) 328-8413

karisch@texasprobate.com

http://www.texasprobate.com

Copyright © 1999 By Glenn M. Karisch, All Rights Reserved

Final End-of-Session Report

Table of Contents

1.	Legislation Affecting Decedents' Estates.	1

a.	Judicial Discharge of Independent Executors.	1

b.	New Citation Requirements for Probate Stale Wills.	2

c.	Affidavit of Heirship Form.	2

d.	Child Support Claims Given Priority in Decedents' Estates.	3

e.	Other Decedents' Estates Legislation.	3

2.	Legislation Affecting Guardianships, 867 Trusts and 142 Trusts.	3

a.	Restoration of the Ward.	3

b.	Attorney Ad Litem Certification.	4

c.	Probable Cause for Court-Initiated Guardianship Proceedings.	4

d.	Other Guardianship Legislation.	4

3.	Legislation Affecting Probate Court Jurisdiction and Transfer Powers.	5

a.	Consolidating the Transfer Power of Statutory Probate Courts.	5

b.	Giving Statutory Probate Courts a Priority in Section 5(b) Transfers.	6

c.	Outbound Transfers from Statutory Probate Courts.	7

d.	Multi-County Statutory Probate Courts.	7

e.	Probate Masters.	7

f.	Harris County Probate Court Assignments.	7

g.	No More Pseudo-Statutory Probate Court Jurisdiction for Nueces County.	7

4.	Legislation Affecting Trusts.	8

a.	Trust Venue Changes.	8

b.	Nonjudicial Virtual Representation.	8

c.	Delegation of Investment Authority by Trustee.	9

d.	The Failed Charitable Beneficiary Bill.	9

e.	The NIMCRUT Bill.	9

f.	Protecting Charities Serving as Trustee From Suit.	9

5.	Legislation Affecting Marital Property Rights – Family Harmony.	10

6.	Other Legislation.	11

a.	No More $3-and-$2 Filing Fees!	11

b.	Statutory Probate Courts May Charge Extra $40 Filing Fee.	11

c.	The Roth IRA Exempt Property Bill.	11

d.	Relief for Write-Your-Own-Will Software Publishers from the Definition

of the "Practice of Law."	11

e.	Consolidation of Law Regarding Advanced Directives; New Statutory Forms

for Medical Powers of Attorney and Directives to Physicians.	12

f.	Declarations for Mental Health Treatment.	12

g.	Four-Year Statute of Limitations for Fraud and Breach of Fiduciary Duty.	13

h.	Texas Tomorrow Fund Investments.	13

i.	Rights of Survivorship for Automobile and Mobile Home Titles.	13

j.	Driver License Restrictions for Incapacitated Persons.	13

k.	Assignment of Lottery Winnings.	13

l.	Clean-Up of Exemption From Creditors' Claims For Insurance.	13

APPENDIX A – 1999 Amendments to the Texas Probate Code

APPENDIX B – 1999 Changes to the Texas Trust Code

APPENDIX C – Medical Power of Attorney Form (With Disclosure Statement)

APPENDIX D – Directive to Physicians and Family or Surrogates Form

APPENDIX E – Declaration of Guardian for Minor Children Form

APPENDIX F – Affidavit of Heirship Form

APPENDIX G – New Subchapter C to Chapter 4 of Texas Family Code

Texas Legislative Update — 1999

The Texas Legislature met again in 1999 (don't they ever take a break?) and performed their magic on the statutes affecting probate, estate planning and trust law. Among the things lawyers practicing in these areas will have to digest in 1999 are:

•	New statutory forms for medical powers of attorney, directives to physicians and declarations of guardian for minor children, with the new forms to be used beginning September 1, 1999.

•	Transmutation of separate property into community property by agreement — if the voters of Texas approve a constitutional amendment in November 1999.

•	The end of those dreaded $3 for the first page, $2 for additional pages for probate court filings.

•	A new procedure for obtaining a judicial discharge of independent executors.

This paper discusses some of the key changes. Attached to this paper as appendices are:

Appendix A	Those sections of the Texas Probate Code which were amended, full-
text, showing 1999 changes
Appendix B	Those sections of the Texas Trust Code which were amended, full-text, showing 1999 changes
Appendix C	New statutory form for medical power of attorney
Appendix D	New statutory form for directive to physicians and family or surrogates
Appendix E	New statutory form for declaration of guardian for minor children
Appendix F	New statutory affidavit of heirship form
Appendix G	New Subchapter C to Chapter 4, Family Code

Much more information about the 1999 legislative session and its effects on the trust and probate area of practice can be found at the author's web site, http://www.texasprobate.com .

1.	Legislation Affecting Decedents' Estates.

a.	Judicial Discharge of Independent Executors. HB 1852 establishes a new procedure for obtaining a judicial discharge of independent executors. This was one of the Real Estate, Probate and Trust Law Section's ("REPTL's) top priorities for this session, and a compromise solution worked out with some of the statutory probate judges appears to give the section virtually everything it wanted.

HB 1852 enacts new sections 149D -- 149G. Section 149D requires the independent executor to distribute all of the estate property, except for "a reasonable reserve of assets that the independent executor may retain in a fiduciary capacity pending court approval of the final account." Section 149E authorizes the independent executor to file a declaratory judgment action seeking to discharge the independent executor "from any liability involving matters relating to the past administration of the estate that have been fully and fairly disclosed." Section 149E requires notice to each beneficiary (unless citation is waived) and authorizes the court to require the filing of a final account. (Note that the legislation would not require the filing of a final account in every case, just if the court asks for it. If no beneficiary objects, presumably the court would have no reason to ask for the accounting. Of course, the executor may decide the accounting is necessary to satisfy the "fully and fairly disclosed" requirement.) Section 149F provides for the payment of costs associated with the proceeding from the estate in most cases.

HB 1852 makes a corresponding change to the declaratory judgments act in the Civil Practices and Remedies Code.

The new judicial discharge provisions apply to the estates of decedents dying on or after September 1, 1999. It will be interesting to see if the courts allow the procedure to be used for estates of decedents dying prior to that time.

b.	New Citation Requirements for Probate Stale Wills. HB 1852 enacts new Section 128B of the Probate Code. New Section 128B was added as part of a compromise between REPTL and some of the statutory probate judges. In 1997, legislation backed by the statutory probate judges enacted Sections 89A and 89B and renumbered Section 89C regarding probating a will as a muniment of title. While the legislative history of the 1997 legislation made it clear that no substantive change was intended, on its face the 1997 legislation called into question the ability to probate a will as a muniment of title more than four years after the testator's death. (Section 89B required proof that four years had not elapsed since the testator's death, even though Section 73 permits probate of a will as a muniment of title more than four years after death in some cases.)

In HB 1852 as originally introduced, REPTL tried to clear up the confusion caused by the 1997 legislation, but some probate judges opposed the clean-up effort, jeopardizing HB 1852. As a compromise, the probate lawyers group agreed to the addition of Section 128B to HB 1852 while dropping the Section 89A and 89B clean-up effort.

New Section 128B sets forth new citation rules when a will is to be probated more than four years after the testator's death. It requires notice to the testator's heirs (or, if a prior will was probated, to the beneficiaries under the prior will) of an attempt to probate a will more than four years after the testator's death. Section 128B makes no sense unless it is still possible to probate a will as a muniment of title more than four years after the testator's death, so the probate lawyers indirectly have accomplished one of their purposes — assuring that the 1997 legislation did not take away that possibility. In so doing, however, REPTL had to accept this new citation requirement when probating stale wills.

Section 128B applies to the estates of persons dying on or after September 1, 1999. That means it will not apply to attempts to probate a stale will until at least September 1, 2003. The law in effect prior to the enactment of Section 128B (which did not include the new citation rules) applies to persons dying prior to September 1, 1999.

c.	Affidavit of Heirship Form. SB 1106 enacted new Section 52A, setting forth a permissive (not mandatory) form for affidavit of facts concerning identity of heirs which can be filed for record and used as prima facie evidence of heirship under Section 52. The form is attached as Appendix F. The new form is for use on or after September 1, 1999.

d.	Child Support Claims Given Priority in Decedents' Estates. HB 1348 gives "Class 4" priority to "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." This puts them below funeral expenses, last illness expenses, administrative expenses and secured claims for money.

e.	Other Decedents' Estates Legislation. Among the other provisions enacted in 1999 affecting decedents' estates are the following:

i.	HB 1852 adops new Sections 221A and 221B to permit the designation of a new resident agent and the resignation of a resident agent, respectively, for a nonresident personal representatives.

ii.	HB 1852 makes Probate Code Section 270 consistent with recent changes permitting home equity loans.

iii.	HB 1136 cleans up the 1997 change extending the "free" probate filing period from 90 days after the application is filed to 120 days.

iv.	HB 1142 authorizes county clerks to dispense with keeping "probate minutes" and to keep virtually everything electronically.

v.	HB 1660 cleans up provisions regarding closing estates.

vi.	HB 1661 cleans up provisions regarding neglecting to file a final account.

vii.	HB 1176 requires the original signatures of the clerk and judge on exemplified probate records filed under Section 95 of the Probate Code (foreign probate).

2.	Legislation Affecting Guardianships, 867 Trusts and 142 Trusts.

a.	Restoration of the Ward. HB 1663 establishes procedures for hearings to determine if a guardianship should be terminated and a ward's rights restored. Prior to the 1999 change, Section 694A provided that a ward or any person interested in the ward's welfare may petition the court for a finding that the ward no longer needs the guardianship or that the ward has regained the capacity to do some, but not all, of the tasks required for full capacity. However, the prior statute did not provide answers for such important issues as the burden of proof and the standard of proof required.

HB 1663 fills in most of the gaps in the restoration of the ward proceeding. It provides for the appointment of an attorney ad litem and/or guardian ad litem, places the burden of proof on the party seeking restoration, and sets the standard of proof at a preponderance of the evidence (not the clear and convincing evidence standard needed to set up a guardianship in the first place). The bill bars the filing of restoration suits more frequently than once per year.

All in all, HB 1663 is a welcome addition to Texas's guardianship provisions. However, there is one potentially serious problem with HB 1663: The bill also amends Section 642 of the Probate Code to provide that a person who has an interest that is adverse to a "proposed ward or incapacitated person" may not "contest an application for complete restoration of a ward's capacity or modification of a ward's guardianship." At first glance, this seems to make sense — Section 642 bars persons with adverse interests from participating in proceedings to appoint guardians, so why shouldn't such persons be barred from participating in proceedings to restore a ward? The problem is that the guardian almost always will have some interest which is adverse (or potentially adverse) to the ward, so the guardian may be barred from contesting the restoration. This could be horrible, since in many cases the guardian may be the only person with knowledge of the ward's continuing need for a guardianship and the only person in a position to advocate for the continued guardianship. I testified on this bill at the Senate Jurisprudence Committee, and the senators indicated that the legislature did not intend to bar guardians from participating in restoration proceedings simply because they serve as guardian and have inherent conflicts. This legislative history may be helpful if, as I expect, proponents in a restoration proceeding always try to knock out the guardian as a participant in the hearing.

HB 1663 takes effect September 1, 1999, and applies to restoration proceedings begun after that date, but the bill contains a mechanism for ongoing restoration proceedings to opt into the new rules.

b.	Attorney Ad Litem Certification. HB 919 changes the certification rules for court-
appointed attorneys in guardianship proceedings. The bill enacts new Section 647A, which requires all court-appointed attorneys in a guardianship proceeding (not just attorney ad litems) to be certified, requires a three-hour certification course (not four as used to be the case), and makes renewal certificates be good for four years, not two, if the attorney has been certified for four years in a row. The new rules take effect September 1, 1999.

c.	Probable Cause for Court-Initiated Guardianship Proceedings. HB 2165 permits the court to require an information letter or physician's certificate to establish probable cause before appointing a guardian ad litem or court investigator to see if a guardianship is necessary. This will enable the court to avoid the expense and hassle of an investigation just because the neighbor calls and says so-and-so is crazy. In such a case, the judge can decide to do nothing unless the neighbor gives a detailed information letter about the alleged incapacitated person. HB 2165 also makes it clear that a guardian of the person can file his or her report under Section 743 without the assistance of a lawyer.

d.	Other Guardianship Legislation. Among the other guardianship provisions enacted in 1999 are the following:

i.	HB 1662 cleans up provisions regarding investment of guardianship assets.

ii.	In order to prevent a gap in protection, HB 2164 permits filing for a guardianship for a minor who, because of incapacity, will need a guardianship after attaining age 18, prior to his or her eighteenth birthday.

iii.	HB 2166 provides for the appointment of a family member or friend to replace a governmental entity or guardianship program serving as guardian. This will make it easier to get a family member or friend in as guardian and a governmental entity or guardianship program out as guardian in appropriate cases.

iv.	HB 2795 requires the name of the proposed guardian or temporary guardian to be included in citation of a guardianship action if the proposed guardian or temporary guardian is not also the applicant. The bill also requires the temporary guardian to appear in court if the applicant is not the temporary guardian.

v.	HB 3337 deletes unnecessary references to missing persons.

vi.	HB 3338 changes the statutory form for declaration of appointment of guardian for minor children (Probate Code Section 677A) so that the declarant may specify whether or not they wish for the designated person(s) to serve with or without bond. The new form is attached as Appendix E.

3.	Legislation Affecting Probate Court Jurisdiction and Transfer Powers.

a.	Consolidating the Transfer Power of Statutory Probate Courts. After several years of confusion in the courts, and after attempts both to expand and constrict the power of statutory probate courts to transfer cases in the 1997 legislative session, the advocates of strong transfer power had a field day in the 76th Legislature.

Most of the large urban counties in Texas — Harris, Dallas, Bexar, Tarrant, El Paso, Travis, Galveston and Denton — have specialty probate courts. These "statutory probate courts" have greater authority than other courts hearing probate cases in the state. For example, these courts can hear trust cases, while "constitutional county courts" and "county courts at law" may not. One of the most significant special powers these courts have is found in Sections 5B and 608 of the Probate Code — the power to transfer a case pending in another court to the probate court without the transferring court's permission. This "reach out and touch" jurisdiction was intended to promote the efficient administration of estates — why should a whole probate proceeding be held up while a case involving the estate drags on in some district court somewhere when the probate court could hear it quickly and efficiently?

The 5B/608 transfer power has been the source of much litigation in the past 8 years or so. In In 1997, a floor amendment late in the session added the following to the definition of "appertaining to estates" in Section 5A of the Texas Probate Code: "; all such suits, actions, and applications are appertaining to and incident to an estate for the purposes of this section." The purpose of the 1997 change was to bring suits by or against a personal representative within the "appertaining to estates" definition so the Section 5B transfer power would apply. While the decision in Greathouse v. McConnell, 982 S. W. 2d 165 (Text App. — Houston [1st Dist.] 1998, writ denied), went a long way to resolving the construction of the 1997 amendment in favor of an expansion of the transfer power, three problems remained from 1997:

•	The 1997 change to Section 5A only affected decedents' estates — what about guardianships?

•	What in the heck does "for the purposes of this section" mean in the 1997 amendment?

•	What about third party claims — can they be transferred along with a case "by or against" the personal representative?

The 1999 legislation resolves all three of these questions, and it does so precisely how the proponents of broad probate court jurisdiction could wish:

•	HB 778 deletes the confusing "for purposes of this section" language from Section 5B, as well as making other clarifying amendments to Section 5A.

•	HB 777 makes corresponding changes to Section 607, in effect making the same transfer rules apply in both decedents' estates and guardianships.

•	HB 2580 amends Section 5B and Section 608, providing that statutory probate courts may transfer any case in which the personal representative or guardian is a party, making it clear that third party actions can be transferred along with the case "by or against" the estate or guardianship.

b.	Giving Statutory Probate Courts a Priority in Section 5(b) Transfers. Prior to the 1999 legislation, Section 5(b) (that's five little b, not five BIG B) required a constitutional county court judge to either transfer a contested probate proceeding to the district court or ask the presiding statutory probate judge to assign a statutory probate judge to hear the contested matter. The law was silent on which method is preferred and on how the decision is made. HB 1607 added the following to Section 5(b):

If the judge of the county court has not transferred a contested probate matter to the district court at the time a party files a motion for assignment of a statutory probate court judge, the county judge shall grant the motion and may not transfer the matter to district court unless the party withdraws the motion. A statutory probate court judge assigned to a contested probate matter as provided by this subsection has for that matter the jurisdiction and authority granted to a statutory probate court by Sections 5A and 5B of this code.

This would appear to give the contestant/defendant an advantage when it comes to forum selection. Consider this example: When the applicant files a will for probate, it is not a "contested matter" unless and until a contest is filed. If the contestant wants a statutory probate judge assigned, he or she can ask for this at the time the answer is filed, thus tying the local judge's hands. In this example, there's no way to head off such a motion. Perhaps the applicant could file a protective motion to transfer, in effect saying, "if there's a contest, I want a statutory probate judge to hear the case." At any rate, there's certainly now a premium on speed.

If there's a race between the parties on the transfer/assignment issue, note that the bill is tied to the actual transfer of the case to the district court, not the filing of a motion to transfer it there. Thus, if a party wants it transferred to the district court, it almost has to ex parte the judge and ask him or her to transfer it immediately -- if a hearing on the motion to transfer to district court is set, the other side will have a chance to file a motion for assignment to a statutory probate court, rendering the motion to transfer moot.

Obviously, this will mean that more contested probate matters get heard by statutory probate judges -- not a bad result, considering that the whole point of having statutory probate judges is to have judges experienced in probate matters hearing probate cases. This bill is likely to adversely affect the budgets of small counties, however, since the county apparently bears most or all of the cost of having a statutory probate judge hear a case.

The second sentence to be added to Section 5(b) is significant. The statutory probate judge hearing the case now brings his or her bag of jurisdictional tricks to the county when he or she hears the case. This will enable the court to hear ancillary matters which the constitutional county court lacked jurisdiction to hear. It also will allow the court to make Section 5B transfers to the court.

c.	Outbound Transfers from Statutory Probate Courts. HB 1605 permits statutory probate courts to transfer cases to other courts when they lose jurisdiction. HB 1605 is effective September 1, 1999.

d.	Multi-County Statutory Probate Courts. SB 1001 amends Chapter 25 of the Government Code to permit counties to band together to form multicounty statutory probate courts. This legislation is a good idea conceptually, but it requires the counties to agree on splitting the cost of the court. District courts are funded by the state, so multicounty district courts are easier to stomach for rural counties. It remains to be seen if a county will be willing to pay a portion of the cost for a statutory probate court while facing the possibility that the judge will not be a resident of the county.

e.	Probate Masters. For the last few sessions, legislation permitting statutory probate courts to employ masters to hear probate cases has failed. This session the probate masters' bill (SB 294) made it into law.

The masters bill is modeled on family court masters. It places the burden on a county's commissioners' court to decide whether or not to fund masters. The Dallas County lobbyists apparently are paid to keep the burden to make such decisions off of the Dallas County Commissioners' Court — they insisted that the bill have a provision in it saying it is inapplicable to Dallas County statutory probate courts.

f.	Harris County Probate Court Assignments. HB 3854 changes the way in which probate cases are allocated among the various statutory probate courts of Harris County, presumably to make forum-shopping a little harder to do.

g.	No More Pseudo-Statutory Probate Court Jurisdiction for Nueces County. SB 1150 gets rid of the special probate jurisdiction of the Nueces County courts at law. Nueces County has no statutory probate court, but it had a special jurisdictional statute giving each of its county courts at law the jurisdiction of a statutory probate court. That no longer is the case, effective September 1, 1999.

4.	Legislation Affecting Trusts.

a.	Trust Venue Changes. We have new venue rules for litigation involving trusts. The new venue rules were in the huge Interstate Banking Bill (HB 2066 by Rep. Marchant) and in a standalone bill -- HB 2317 by Rep. Hartnett. The venue provisions of both bills are identical, and both passed.

The new venue rules introduce the concept of "the situs of administration of the trust," rather than relying solely on the residence of the trustee or the principal office of a corporate trustee. "Situs of administration" is defined as "the location in this state where the trustee maintains an office that is primarily responsible for dealing with the settlor and beneficiaries of the trust." The definition also states that the "situs of administration may also be but is not necessarily the same as the principal office of a corporate trustee."

These bills make additional changes to Tex. Trust Code Sec. 115.002, but the gist of the changes is that a disgruntled trust beneficiary who has all of his or her dealings with the trustee in a remote office (for example, McAllen) is not required to bring the suit in the county where the trustee's principal office is located (for example, Dallas).

The new trust venue rules take effect September 1, 1999.

b.	Nonjudicial Virtual Representation. HB 1475 permits the trustee to obtain approval of various actions via nonjudicial virtual representation. Texas law has long permitted trust beneficiaries with identical interests to contingent remaindermen to bind such remaindermen in judicial proceedings through the doctrine of virtual representation. HB 1475 takes this a step further, permitting the trustee to obtain binding agreements with beneficiaries which will bind remaindermen without the need for a court proceeding. New Section 114.032 provides that a written agreement between a trustee and a beneficiary, including a release, consent, or other agreement relating the a trustee's duty, power, responsibility, restriction, or liability, is "final and binding" on a beneficiary and "any person represented by a beneficiary" if the conditions stated in the statute are met. The statute requires the beneficiary to have "full knowledge of the circumstances surrounding the agreement" for the agreement to be binding.

The new virtual representation provision seems very broad, and the potential for trustee abuse seems great, but it does contain the following limitation:

This section does not apply to a written instrument that modifies or terminates a trust in whole or in part unless the instrument is otherwise permitted by law.

Since it cannot be used for modifications and terminations, I believe the most popular use will be to close the book on relatively minor trustee malfeasance. Consider this hypo:

Big Bank is trustee of a trust. The trust instrument prohibits investment in foreign securities. Through an oversight, Big Bank had invested in offshore stocks. When it discovers its error, it sells the stock, calculates any damages which resulted from the improper investments, and pays back the trust for the damages it calculated. Without the new statute, Big Bank could disclose to the current adult beneficiaries and obtain a release from them, but nothing short of a court action (such as a suit to settle its interim accounts) could bind unborns. Now, with the new statute, Big Bank can make an adequate disclosure, obtain releases from the adult beneficiaries and, assuming their interests are virtually represented, bind unborns.

c.	Delegation of Investment Authority by Trustee. HB 1475 authorizes trustees to employ investment agents (Tex. Trust Code § 113.018) delegate investment decisions (new Section 113.060). The banking/trust company lobby has been after this authority for two sessions now, and HB 1475 represents a compromise struck between the probate lawyers and the bankers.

As with many compromises, the delegation of authority provision has ended up being somewhat unattractive both from the trustee's perspective and the probate lawyers' perspective. The bill provides that the trustee remains responsible for the investment decisions of the agent unless he meets strenuous criteria, such as exercising appropriate judgment and care in selecting the agent and assuring that the agent is subject to the jurisdiction of Texas courts, is subject to the trust management and investment standards under Texas law and assumes responsibility for failing to follow that standard.

d.	The Failed Charitable Beneficiary Bill. HB 115 permits the nonjudicial change of a charitable beneficiary in some cases. As originally proposed, HB 115 would have permitted nonjudicial designation of successor charitable beneficiaries (in cases where the named charity ceases to exist, for example) with the settlor's consent which did not have the same or similar purpose as the named charity. The attorney general negotiated that out of the bill, so that the new charity must have a same or similar purpose even if the settlor agrees. However, and almost inexplicably, the language agreed to by the AG permits the trustee/trust to recover attorneys fees and costs from the AG if the AG unreasonably objects to the charity selected by the trustee. If this doesn't seem to make sense, don't worry about it -- you should never encounter the problem addressed by this bill if you give the trustee the power to name new charitable beneficiaries in the event a named beneficiary ceases to exist.

e.	The NIMCRUT Bill. HB 1373 adopts a new default rule for allocating income and principal for charitable trusts. The default rule for charitable trusts will be that an increase in the value of a deferred annuity before annuitization and a life insurance contract before the death of the insured over the value at the time the obligation was acquired by the trust is income. This makes it easier for net income makeup charitable remainder unitrusts (NIMCRUTs) to employ the so-called spigot technique — a substantial portion of the NIMCRUT is invested in deferred annuity contracts, yielding no income in years when the noncharitable beneficiary needs no income and permitting the trustee to generate lots of make-up income in years when the noncharitable beneficiary wants lots of income. As originally introduced, the rule would apply to all trusts, but the bill was amended in the Senate Jurisprudence Committee to apply only to charitable trusts.

f.	Protecting Charities Serving as Trustee From Suit. HB 3276 protects charities serving as trustees of trust from suit. This is a holdover from the 1997 session. A similar bill died in 1997 due to a parliamentary move on other legislation. This bill is part of the backlash caused by the charitable gift annuity antitrust litigation in Wichita Falls a couple of years back.

5.	Legislation Affecting Marital Property Rights – Family Harmony. The Texas Academy of Probate and Trust Lawyers (the "Texas Academy") finally succeeded in passing a transmutation bill in 1999, but not without a lot of effort and a somewhat distasteful compromise.

Texas always has been the most conservative of the community property states when it comes to permitting the spouses to vary the community property scheme by agreement. (Remember Hilley v. Hilley?) Today the law is pretty clear that spouses can agree to partition community property into separate property, but our law does not permit the reverse — conversion of separate property into community. Now spouses must rely on two community property principles — the income from separate property is community rule and commingling (presumption of community property rule) to convert separate property into community. Since under current tax law both halves of community property get a stepped-up basis at death, there are times when creating community property by agreement makes sense.

For two sessions REPTL has tried to pass a bill which would permit spouses to agree to convert separate property into community property. Both times the probate lawyers group was thwarted by certain family lawyers within the state bar, making it impossible for the section to sponsor the legislation. The Texas Academy took up the battle in 1999. It dusted off the failed REPTL legislation, renamed it the "Family Harmony" bill and obtained a powerful House sponsor -- Rep. Toby Goodman of Tarrant County, Chair of the House Juvenile Justice and Family Issues Committee (through which virtually all Family Code legislation must pass).

The bill (which actually was two bills — HJR 36, the necessary constitutional amendment, and HB 734, the enabling legislation amending the Family Code) sailed through the House but ran into trouble in the Senate. The trouble in the Senate resulted from another bill of Rep. Goodman's which the Academy opposed — HB 2142, which would have radically altered the rules in Texas about community enhancements to separate property. The community enhancements bill would have greatly enhanced the ability of the nonmoneyed spouse to claim that increases in value of the separate property of the other spouse was community property, including an express legislative statement that the Legislature prefers the "enhancement in value" rule espoused in Anderson v. Gilliland, 684 S. W. 2d 673 (Tex. 1985), over the "reimbursement theory" expressed in Jensen v. Jensen, 665 S. W. 2d 107 (Tex. 1984). This may have been a boon to family lawyers, but it would have been a disaster for administrators of decedent's estates, who also would struggle with the loosey-goosey separate/community characterization issues presented.

For a while it looked like the Texas Academy may be able to defeat the community enhancements bill only at the risk of Family Harmony (pardon the bad pun, but it is hard to get humor out of probate legislation, and one must take one's opportunities when they present themselves). In the end, a watered down version of the community enhancements bill — without the offensive anti-Jensen provisions — was grafted onto the Family Harmony bill, which passed.

The Family Harmony constitutional amendment was approved by Texas voters on November 2, 1999. The new Subchapter C to Chapter 4 of the Texas Family Code – the Family Harmony enabling legislation which takes effect January 1, 2000 – is attached as Appendix G.

6.	Other Legislation.

a.	No More $3-and-$2 Filing Fees! HB 2822 may have the most significant impact on probate law practices. This bill replaces the old $3 for the first page and $2 for subsequent pages filing fee system in probate cases in favor of fixed filing fees for certain items (such as annual accounts) and FREE filings of everything else.

Forget esoteric legislative issues like community enhancements, 5B transfer power, etc. — no more 3-and-2 filing fees? In Texas? In probate? That, my friends, is earth-shattering stuff. No more sending the runner to the courthouse with the wrong fee due to a miscount of pages. (Let's see, is the order a separate document, getting $3 for the first page, or just a continuation?) It is not clear if the $2 fee for the judge's signature requirement will remain. (That always seemed odd -- yes, the judge will sign the order, but it'll cost you $2 extra to file it.)

HB 2822 takes effect September 1, 1999.

b.	Statutory Probate Courts May Charge Extra $40 Filing Fee. HB 1123 permits counties with statutory probate courts to charge an extra $40 filing fee in each probate, guardianship, mental health or civil case. A similar statute already applied to other courts, but now counties with statutory probate courts will be able to collect the extra fee as well.

c.	The Roth IRA Exempt Property Bill. When Congress adopted Section 408A of the Internal Revenue Code permitting Roth IRAs, they threw the people of Texas a curveball — Texas's exempt property statute for individual retirement accounts (Tex. Prop. Code § 42.0021) defined IRAs by Internal Revenue Code section rather than by descriptive name and specifically provided that nondeductible contributions were not exempt.

Of course, by their very nature contributions to Roth IRAs are not deductible. Therefore, persons establishing new Roth IRAs and worse — persons making rollovers to Roth IRAs — may not have the protection of the exempt property statute.

HB 76 addresses this problem by adding "Section 408A" plans to the list and by stating that nondeductible contributions to a Roth IRA do not foul up the exempt status of the account. Finally, HB 76 provides that "[a]mounts treated as qualified rollover contributions under Section 408A, Internal Revenue Code of 1986, are treated as exempt amounts . . . ."

HB 76 was signed into law by Governor Bush and takes effect September 1, 1999, and by its terms applies to "all contributions made under Section 408A, Internal Revenue Code of 1986, before, on, or after the effective date of this Act." Nonetheless, creditors of a person making a big Roth IRA rollover before the enactment of HB 76 may argue that the rollover assets are not exempt because HB 76 is unconstitutional as it affects vested rights.

d.	Relief for Write-Your-Own-Will Software Publishers from the Definition of the "Practice of Law." In February, Federal Judge Barefoot Sanders of Dallas banned the sale or distribution of "Quicken Family Lawyer" in Texas, saying that the program violates Texas's statute barring the unauthorized practice of law. In the case, brought by the Dallas unauthorized practice of law committee, the judge held that the program, which aids users in filling out wills, leases, and other legal documents, goes well beyond the mere provision of factual information about the legal system. To the author's knowledge, the Quicken Family Lawyer case remains pending.

Judge Sanders's decision directly led to the introduction of HB 1507, which excludes such products from the definition of "practice of law," clearing the way for those products to be sold in Texas.

e.	Consolidation of Law Regarding Advanced Directives; New Statutory Forms for Medical Powers of Attorney and Directives to Physicians. SB 1260 recodifies Texas law regarding durable powers of attorney for health care, directives to physicians and out-of-hospital DNR orders into new Chapter 166 of the Health and Safety Code, entitled "Advanced Directives." The new Chapter 166 contains some common definitions that apply to all such directives, as well as subchapters on each type of directive. About the only health care directive not included in the recodification are declarations for mental health treatment.

While they were at it, the legislators changed two key disability planning forms. First, the old

"Durable Power of Attorney for Health Care" has been renamed "Medical Power of Attorney," and it has just enough form changes to trip folks up. The new "Medical Power of Attorney" form and disclosure statement is attached as Appendix C. Please note that this is a mandatory form which must be used beginning September 1, 1999. The other statutory forms — property power of attorney, directive to physicians, etc., are permissive, not mandatory, but the medical power of attorney must be "substantially" in the statutory form. My guess is that folks who are slow to switch over and use the old form after September 1, 1999, will be considered to "substantially" to have complied with the form, but there's no reason to risk it — start using the new form effective September 1, 1999!

The other form change was to the venerable "Directive to Physicians" form. Apparently, the drafters did not want to make DTP fans jealous of the spiffy new "Medical Power of Attorney" form, so they renamed the directive to physicians, too — it is now called by the noble title of "Directive to Physicians and Family or Surrogates." The new form is attached as Appendix D. We can now call it the "DTPFS" or "DTPAFOS." In addition to a name change, the form now has a disclosure statement (similar to the medical power of attorney disclosure statement), a place for the principal to choose between two treatment options, and a place for the principal to designate an agent. However, the form tells the principal not to designate an agent on the DTPAFOS if a medical power of attorney has been used. All in all, the new form will make document signings more complicated, since there are more options for the principal. It will be interesting to see if attorneys get their clients to pre-choose these options so that the document signing goes fast or if they stumble over this during each signing ceremony.

The new DTPAFOS form is for use beginning September 1, 1999, but it is permissive, not mandatory, so the need to get up to speed on the new form is not as great.

f.	Declarations for Mental Health Treatment. HB 1361 made changes to the statutes regarding declarations for mental health treatment, giving physicians an opportunity to withdraw from treating a patient if they do not agree with the treatments specified in the declaration and permitting deviations from the declaration in case of an emergency when the principal's instructions have not been effective in reducing the severity of the behavior that has caused the emergency.

g.	Four-Year Statute of Limitations for Fraud and Breach of Fiduciary Duty. Prior to the enactment of HB 2456, it was unclear whether or not causes of action for breach of fiduciary duty were subject to the two-year or four-year statute of limitations. HB 2456 makes it clear that the four year statute of limitation applies. HB 2456 says that it just "clarifies existing law," so litigants can spin it however they choose for existing causes of action.

h.	Texas Tomorrow Fund Investments. In 1997 the Probate Code was amended to permit investment of guardianship funds in the Texas Tomorrow college education fund with court approval. SB 112 which has been signed into law and became effective May 17, 1999, permits investments in the Texas Tomorrow Fund under Section 142.004 of the Texas Property Code and Section 868 of the Texas Probate Code. Therefore, lawsuit proceeds now can be placed in the Texas Tomorrow Fund under Section 142.004 without the need for a guardianship or trust under Section 142.005, and the trustee of an 867 trust is able to invest trust assets in the Texas Tomorrow Fund without court approval.

i.	Rights of Survivorship for Automobile and Mobile Home Titles. Under prior law, only spouses could register automobile titles and mobile home titles with a right of survivorship -- so that the survivor automatically owns the car or mobile home without the need for probate. HB 381 now permits unmarried persons to have the same privilege. This may be useful in cases where an unmarried person's car is the only reason a probate or small estate affidavit is needed to clean up title on that person's death.

j.	Driver License Restrictions for Incapacitated Persons. Under prior law, Transportation Code Section 521.201 provided that a person who has been adjudicated "mentally incompetent" cannot be issued a driver license. HB 3342 deleted "mentally incompetent" and substituted "totally incapacitated or incapacitated to act as the operator of a motor vehicle" in its place.

k.	Assignment of Lottery Winnings. HB 1799 permits the assignment of lottery winnings (annuitized, not cash option) with the approval of the district court of Travis County. Assignments are not permitted in the last two years of the payout schedule, and the applicant must satisfy the Court that he/she understands the tax implications, etc.

l.	Clean-Up of Exemption From Creditors' Claims For Insurance. HB 1805 cleans up inconsistencies between the Property Code and the Insurance Code regarding the creditor protection afforded insurance policies and proceeds. The legislative history makes clear that the changes are not intended to weaken the protection in any way.

APPENDIX A – 1999 Amendments to the Texas Probate Code

1999 CHANGES TO THE TEXAS PROBATE CODE

Amendments Made By the 76th Texas Legislature (1999)

Explanation of Legislative Changes © 1999 by Glenn M. Karisch

SECTIONS WHICH WERE AMENDED

Sec. 3. Definitions and Use of Terms.

Sec. 5. Jurisdiction of District Court and Other Courts of Record With Respect to Probate Proceedings and Appeals from Probate Orders.

Sec. 5A. Matters Appertaining and Incident to an Estate and Other Probate Court Jurisdiction.

Sec. 5B. Transfer of Proceeding.

Sec. 5C. Actions to Collect Delinquent Property Taxes.

Sec. 10B. Communications or Records Relating to Decedent's Condition Before Death.

Sec. 15. Case Files.

Sec. 17. Maintaining Records in Lieu of Record Books.

Sec. 17A. Index.

Sec. 18. Use of Records as Evidence.

Sec. 52. Recorded Instruments as Prima Facie Evidence.

Sec. 52A. Form of Affidavit of Facts Concerning Identity of Heirs.

Sec. 95. Probate of Foreign Will Accomplished by Filing and Recording.

Sec. 105A. Appointment and Service of Foreign Banks and Trust Companies in Fiduciary Capacity.

Sec. 149A. Accounting.

Sec. 149B. Accounting and Distribution.

Sec. 149C. Removal of Independent Executor.

Sec. 149D. Distribution of Remaining Estate Pending Judicial Discharge.

Sec. 149E. Judicial Discharge of Independent Executor.

Sec. 149F. Court Costs and Other Charges Related to Final Account in Judicial Discharge.

Sec. 149G. Rights and Remedies Cumulative.

Sec. 194. Bonds of Personal Representatives of Estates.

Sec. 221A. Change of Resident Agent.

Sec. 221B. Resignation of Resident Agent.

Sec. 222. Removal.

Sec. 270. Liability of Homestead for Debts.

Sec. 322. Classification of Claims Against Estates of Decedent.

Sec. 404. Closing Administration of Estates of Decedents.

Sec. 406. Procedure in Case of Neglect or Failure to File Final Account; Payments Due Meantime.

Sec. 601. Definitions.

Sec. 606. District Court and Other Court of Record Jurisdiction.

Sec. 607. Matters Appertaining and Incident to an Estate.

Sec. 608. Transfer of Guardianship Proceeding.

Sec. 625. Case Files.

Sec. 627. Maintaining Records in Lieu of Record Books.

Sec. 627A. Index.

Sec. 628. Use of Records as Evidence.

Sec. 633. Notice and Citation.

Sec. 642. Standing to Commence or Contest Proceeding.

Sec. 646. Appointment of Attorney Ad Litem and Interpreter.

Sec. 647. Duties of Attorney Ad Litem.

Sec. 647A. Certification Requirement for Certain Court-appointed Attorneys.

Sec. 648A. Duties of Court Investigator.

Sec. 665. Compensation of Guardians and Temporary Guardians.

Sec. 665B. Compensation of Certain Attorneys.

Sec. 677A. Written Declarations by Certain Parents to Appoint Guardians for Their Children.

Sec. 682. Application; Contents.

Sec. 682A. Application for Appointment of Guardian for Certain Persons.

Sec. 683. Court's Initiation of Guardianship Proceedings.

Sec. 683A. Information Letter.

Sec. 694A. Complete Restoration of Ward's Capacity or Modification of Guardianship [].

Sec. 694B. Contents of Application.

Sec. 694C. Appointment of Attorney Ad Litem.

Sec. 694D. Hearing.

Sec. 694E. Findings Required.

Sec. 694F. Examinations and Reports Relating to Complete Restoration of Ward's Capacity or Modification of Guardianship.

Sec. 694G. Order of Complete Restoration of Ward's Capacity.

Sec. 694H. Modification of Guardianship.

Sec. 694I. Dismissal of Application.

Sec. 694J. Contents of Order.

Sec. 694K. Attorney Retained on Ward's Behalf.

Sec. 697. Registration of Private Professional Guardians.

Sec. 698. Access to Criminal History Records.

Sec. 702. Bond Required of Guardian of the Person or Estate.

Sec. 743. Reports of Guardians of the Person.

Sec. 855. Investments Without Court Order.

Sec. 868. Terms of Management Trust.

Sec. 875. Temporary Guardian--Procedure.

Sec. 3. Definitions and Use of Terms.

Except as otherwise provided by Chapter XIII of this Code, when used in this Code, unless otherwise apparent from the context:

(a) "Authorized corporate surety" means a domestic or foreign corporation authorized to do business in the State of Texas for the purpose of issuing surety, guaranty or indemnity bonds guaranteeing the fidelity of executors and administrators.

(b) "Child" includes an adopted child, whether adopted by any existing or former statutory procedure or by acts of estoppel, but, unless expressly so stated herein, does not include a child who has no presumed father.

(c) "Claims" include liabilities of a decedent which survive, including taxes, whether arising in contract or in tort or otherwise, funeral expenses, the expense of a tombstone, expenses of administration, estate and inheritance taxes, and debts due such estates.

(d) "Corporate fiduciary" means a financial institution as defined by Section 201.101, Finance Code, [ ] having trust powers, existing or doing business under the laws of this state, another state, or [] the United States, which is authorized by law to act under the order or appointment of any court of record, without giving bond, as receiver, trustee, executor, administrator, or, although without general depository powers, depository for any moneys paid into court, or to become sole guarantor or surety in or upon any bond required to be given under the laws of this state.

(e) "County Court" and "Probate Court" are synonymous terms and denote county courts in the exercise of their probate jurisdiction, courts created by statute and authorized to exercise original probate jurisdiction, and district courts exercising probate jurisdiction in contested matters.

(f) "County Judge," "Probate Judge," and "Judge" denote the presiding judge of any court having original jurisdiction over probate proceedings, whether it be a county court in the exercise of its probate jurisdiction, a court created by statute and authorized to exercise probate jurisdiction, or a district court exercising probate jurisdiction in contested matters.

(g) "Court" denotes and includes both a county court in the exercise of its probate jurisdiction, a court created by statute and authorized to exercise original probate jurisdiction, or a district court exercising original probate jurisdiction in contested matters.

(h) "Devise," when used as a noun, includes a testamentary disposition of real or personal property, or of both. When used as a verb, "devise" means to dispose of real or personal property, or of both, by will.

(i) "Devisee" includes legatee.

(j) "Distributee" denotes a person entitled to the estate of a decedent under a lawful will, or under the statutes of descent and distribution.

(k) "Docket" means the probate docket.

(l) "Estate" denotes the real and personal property of a decedent , both as such property originally existed and as from time to time changed in form by sale, reinvestment, or otherwise, and as augmented by any accretions and additions thereto (including any property to be distributed to the representative of the decedent by the trustee of a trust which terminates upon the decedent's death) and substitutions therefor, and as diminished by any decreases therein and distributions therefrom.

(m) "Exempt property" refers to that property of a decedent's estate which is exempt from execution or forced sale by the Constitution or laws of this State, and to the allowance in lieu thereof.

(n) Repealed by Acts 1995, 74th Leg., ch. 1039, Sec. 73(1), eff. Sept. 1, 1995.

(o) "Heirs" denote those persons, including the surviving spouse, who are entitled under the statutes of descent and distribution to the estate of a decedent who dies intestate.

(p) "Incapacitated" or "Incapacitated person" means:

(1) a minor;

(2) an adult individual who, because of a physical or mental condition, is substantially unable to provide food, clothing, or shelter for himself or herself, to care for the individual's own physical health, or to manage the individual's own financial affairs;

(3) a missing person; or

(4) a person who must have a guardian appointed to receive funds due the person from any governmental source.

(q) "Independent executor" means the personal representative of an estate under independent administration as provided in Section 145 of this Code. The term "independent executor" includes the term "independent administrator."

(r) "Interested persons" or "persons interested" means heirs, devisees, spouses, creditors, or any others having a property right in, or claim against, the estate being administered; and anyone interested in the welfare of a minor or incompetent ward.

(s) "Legacy" includes any gift or devise by will, whether of personalty or realty. "Legatee" includes any person entitled to a legacy under a will.

(t) "Minors" are all persons under eighteen years of age who have never been married or who have not had disabilities of minority removed for general purposes.

(u) "Minutes" means the probate minutes.

(v) "Mortgage" or "Lien" includes deed of trust, vendor's lien, chattel mortgage, mechanic's, materialman's or laborer's lien, judgment, attachment or garnishment lien, pledge by hypothecation, and Federal or State tax liens.

(w) "Net estate" means the real and personal property of a decedent, exclusive of homestead rights, exempt property, the family allowance and enforceable claims against the estate.

(x) "Person" includes natural persons and corporations.

(y) Repealed by Acts 1995, 74th Leg., ch. 1039, Sec. 73(1), eff. Sept. 1, 1995.

(z) "Personal property" includes interests in goods, money, choses in action, evidence of debts, and chattels real.

(aa) "Personal representative" or "Representative" includes executor, independent executor, administrator, independent administrator, temporary administrator, together with their successors. The inclusion of independent executors herein shall not be held to subject such representatives to control of the courts in probate matters with respect to settlement of estates except as expressly provided by law.

(bb) "Probate matter," "Probate proceedings," "Proceeding in probate," and "Proceedings for probate" are synonymous and include a matter or proceeding relating to the estate of a decedent.

(cc) "Property" includes both real and personal property.

(dd) "Real property" includes estates and interests in lands, corporeal or incorporeal, legal or equitable, other than chattels real.

(ee) "Surety" includes both personal and corporate sureties.

(ff) "Will" includes codicil; it also includes a testamentary instrument which merely:

(1) appoints an executor or guardian;

(2) directs how property may not be disposed of; or

(3) revokes another will.

(gg) The singular number includes the plural; the plural number includes the singular.

(hh) The masculine gender includes the feminine and neuter.

(ii) "Statutory probate court" means a statutory court designated as a statutory probate court under Chapter 25, Government Code. A county court at law exercising probate jurisdiction is not a statutory probate court under this Code unless the court is designated a statutory probate court under Chapter 25, Government Code.

(jj) "Next of kin" includes an adopted child or his or her descendents and the adoptive parent of the adopted child.

(kk) "Charitable organization" means:

(1) a nonprofit corporation, trust, community chest, fund, foundation, or other entity that is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code of 1986 because the entity is organized and operated exclusively for religious, charitable, scientific, educational, or literary purposes, testing for public safety, prevention of cruelty to children or animals, or promotion of amateur sports competition; or

(2) any other entity or organization that is organized and operated exclusively for the purposes listed in Section 501(c)(3) of the Internal Revenue Code of 1986.

(ll) "Governmental agency of the state" means:

(1) an incorporated city or town, a county, a public school district, a special-purpose district or authority, or a district, county, or justice of the peace court;

(2) a board, commission, department, office, or other agency in the executive branch of state government, including an institution of higher education as defined by Section 61.003, Education Code;

(3) the legislature or a legislative agency; and

(4) the supreme court, the court of criminal appeals, a court of appeals, or the State Bar of Texas or another judicial agency having statewide jurisdiction.

(mm) "Ward" is a person for whom a guardian has been appointed.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1957, 55th Leg., p. 53, ch. 31, Sec. 2(a), eff. Aug. 22, 1957; Acts 1961, 57th Leg., p. 44, ch. 30, Sec. 2, eff. Aug. 28, 1961; Acts 1969, 61st Leg., p. 1703, ch. 556, Sec. 1, eff. June 10, 1969; Acts 1969, 61st Leg., p. 1922, ch. 641, Sec. 1, eff. June 12, 1969; Acts 1975, 64th Leg., p. 104, ch. 45, Sec. 1, eff. Sept. 1, 1975; Acts 1975, 64th Leg., p. 2195, ch. 701, Sec. 1, eff. June 21, 1975; Acts 1977, 65th Leg., p. 1061, ch. 390, Secs. 1, 2, eff. Sept. 1, 1977; Acts 1979, 66th Leg., p. 1740, ch. 713, Sec. 1, eff. Aug. 27, 1979. Subsec. (n) amended by Acts 1985, 69th Leg., ch. 591, Sec. 1, eff. Sept. 1, 1985; Subsec. (p) amended by Acts 1985, 69th Leg., ch. 159, Sec. 1, eff. Sept. 1, 1985; Subsec. (y) amended by Acts 1985, 69th Leg., ch. 159, Sec. 2, eff. Sept. 1, 1985; Subsec. (b) amended by Acts 1989, 71st Leg., ch. 375, Sec. 33, eff. Sept. 1, 1989; Subsecs. (kk), (ll) added by Acts 1989, 71st Leg., ch. 1035, Sec. 1, eff. Sept. 1, 1989; subsec. (n) amended by Acts 1991, 72nd Leg., ch. 14, Sec. 284(96), eff. Sept. 1, 1991; Subsec. (ff) amended by Acts 1991, 72nd Leg., ch. 895, Sec. 1, eff. Sept. 1, 1991. Amended by Acts 1993, 73rd Leg., ch. 957, Sec. 3, eff. Sept. 1, 1993; Subsec. (n) repealed by Acts 1995, 74th Leg., ch. 1039, Sec. 73(1), eff. Sept. 1, 1995; Subsec. (p) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 4, eff. Sept. 1, 1995; Subsec. (y) repealed by Acts 1995, 74th Leg., ch. 1039, Sec. 73(1), eff. Sept. 1, 1995; Subsec. (mm) added by Acts 1995, 74th Leg., ch. 1039, Sec. 4, eff. Sept. 1, 1995; Subsec. (ii) amended by Acts 1997, 75th Leg., ch. 52, Sec. 1, eff. Sept. 1, 1997. Subsec. (d) amended by Acts 1999, 76th Leg., ch. _____ [HB 2066], eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The Interstate Banking Act, HB 2066, amended subsection (d) — the definition of "corporate fiduciary" — to be consistent with the state's restructured banking laws.

Sec. 5. Jurisdiction of District Court and Other Courts of Record With Respect to Probate Proceedings and Appeals from Probate Orders.

(a) The district court shall have original control and jurisdiction over executors and administrators under such regulations as may be prescribed by law.

(b) In those counties where there is no statutory probate court, county court at law or other statutory court exercising the jurisdiction of a probate court, all applications, petitions and motions regarding probate and administrations shall be filed and heard in the county court, except that in contested probate matters, the judge of the county court may on his own motion (or shall on the motion of any party to the proceeding, according to the motion) request as provided by Section 25.0022, Government Code, the assignment of a statutory probate court judge to hear the contested portion of the proceeding, or transfer the contested portion of the proceeding to the district court, which may then hear contested matter as if originally filed in district court. If the judge of the county court has not transferred a contested probate matter to the district court at the time a party files a motion for assignment of a statutory probate court judge, the county judge shall grant the motion and may not transfer the matter to district court unless the party withdraws the motion. A statutory probate court judge assigned to a contested probate matter as provided by this subsection has for that matter the jurisdiction and authority granted to a statutory probate court by Sections 5A and 5B of this code. The county court shall continue to exercise jurisdiction over the management of the estate with the exception of the contested matter until final disposition of the contested matter is made by the assigned judge or the district court. In contested matters transferred to the district court in those counties, the district court, concurrently with the county court, shall have the general jurisdiction of a probate court. Upon resolution of all pending contested matters, the contested portion of the probate proceeding shall be transferred by the district court to the county court for further proceedings not inconsistent with the orders of the district court. If a contested portion of the proceeding is transferred to a district court under this subsection, the clerk of the district court may perform in relation to the transferred portion of the proceeding any function a county clerk may perform in that type of contested proceeding.

(c) In those counties where there is a statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court, all applications, petitions and motions regarding probate and administrations shall be filed and heard in such courts and the constitutional county court, rather than in the district courts, unless otherwise provided by the legislature, and the judges of such courts may hear any of such matters sitting for the judge of any of such courts. In contested probate matters, the judge of the constitutional county court may on his own motion, and shall on the motion of any party to the proceeding, transfer the proceeding to the statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court, which may then hear the proceeding as if originally filed in such court.

(d) A statutory probate court has concurrent jurisdiction with the district court in all actions by or against a person in the person's capacity as a personal representative, in all actions involving an inter vivos trust, in all actions involving a charitable trust, and in all actions involving a testamentary trust.

(e) All courts exercising original probate jurisdiction shall have the power to hear all matters incident to an estate. When a surety is called on to perform in place of an administrator, all courts exercising original probate jurisdiction may award judgment against the personal representative in favor of his surety in the same suit.

(f) All final orders of any court exercising original probate jurisdiction shall be appealable to the courts of appeals.

(g) Notwithstanding any other law, a statutory county court created under Chapter 25, Government Code, that has the jurisdiction of a statutory probate court on August 31, 1997, retains that jurisdiction after that date. This subsection expires August 31, 1999.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1973, 63rd Leg., p. 1684, ch. 610, Sec. 1; Acts 1975, 64th Leg., p. 2195, ch. 701, Sec. 2, eff. June 21, 1975; Acts 1977, 65th Leg., p. 1170, ch. 448, Sec. 1, eff. Aug. 29, 1977; Acts 1979, 66th Leg., p. 1740, ch. 713, Sec. 2, eff. Aug. 27, 1979. Subsec. (b) amended by Acts 1983, 68th Leg., p. 5434, ch. 1015, Sec. 1, eff. Aug. 29, 1983; Subsecs. (b), (c) amended by Acts 1983, 68th Leg., p. 4122, ch. 647, Sec. 2, eff. Sept. 1, 1983; Subsec. (b) amended by Acts 1985, 69th Leg., ch. 159, Sec. 3, eff. Sept. 1, 1985; amended by Acts 1987, 70th Leg., ch. 459, Sec. 4, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 1035, Sec. 2, eff. Sept. 1, 1989; Subsecs. (a), (b), (c), (e) amended by Acts 1993, 73rd Leg., ch. 957, Sec. 5, eff. Sept. 1, 1993; Subsec. (g) added by Acts 1997, 75th Leg., ch. 1435, Sec. 3, eff. Sept. 1, 1997. Subsec. (b) amended by Acts 1999, 76th Leg., ch. ____ (HB 1607), eff. Aug. 30, 1999.

Explanation of 1999 Amendment

So-called "constitutional" county courts cannot hear contested probate proceedings if any party objects or if the court decides not to hear the matter on its own motion. Prior to the 1999 change, the county court had two options for getting rid of the contested proceeding: it could either transfer it to the district court or ask the presiding statutory probate court judge to assign a statutory probate judge to hear the proceeding. Under prior law, there was no priority given to either option — the county court was free either to transfer it to district court or ask for a statutory probate court judge. If a statutory probate court judge was assigned to hear the proceeding, under prior law he or she did not bring along the "jurisdictional toolbox" — the broad "appertaining to" definition of statutory probate courts and the Section 5B transfer power.

The 1999 amendment to subsection (b) does two things: First, it gives a priority to the statutory probate court assignment option. If the county court has not transferred the case to district court prior to receiving a motion for assignment from either party, it must ask for the assignment of a statutory probate court judge to hear the case. Second, if a statutory probate court judge is assigned to hear the case, he or she brings the toolbox along — including the Section 5B transfer power.

The 1999 amendment has no effective date provision, so it becomes effective 90 days after the legislative session ended, or on August 30, 1999. Because it has no effective date provision, it is unclear whether it applies to the estates of persons dying after August 30, 1999, proceedings filed after August 30, 1999, or motions for assignment filed after August 30, 1999, although the latter seems the most obvious construction.

Sec. 5A. Matters Appertaining and Incident to an Estate and Other Probate Court Jurisdiction.

(a) In proceedings in the constitutional county courts and statutory county courts at law, 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, 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 incident to an estate and for the enforcement of liens thereon incident to an estate, all actions for trial of the right of property incident to an estate, and actions to construe wills, and generally all matters relating to the settlement, partition, and distribution of estates of deceased persons.

(b) In proceedings in the statutory probate courts and district [] 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 [ ]. 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.

(c) A statutory probate court has concurrent jurisdiction with the district court in all actions:

(1) by or against a person in the person's capacity as a personal representative;

(2) involving an inter vivos trust;

(3) involving a charitable trust; and

(4) involving a testamentary trust.

(d) A statutory probate court may exercise the pendent and ancillary jurisdiction necessary to promote judicial efficiency and economy.

(e) Subsections (c)(2), (3), and (4) [] and Subsection (d) apply whether or not the matter is appertaining to or incident to an estate.

Added by Acts 1979, 66th Leg., p. 1741, ch. 713, Sec. 3, eff. Aug. 27, 1979. Subsec. (b) amended by Acts 1985, 69th Leg., ch. 875, Sec. 1, eff. Aug. 26, 1985; Acts 1987, 70th Leg., ch. 459, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 1035, Sec. 3, eff. Sept. 1, 1989; Subsecs. (a), (b) amended by Acts 1993, 73rd Leg., ch. 957, Sec. 6, eff. Sept. 1, 1993; Subsec. (b) amended by Acts 1997, 75th Leg., ch. 1302, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ____ (HB 778), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The 1999 amendment to Section 5B is a clean-up of the 1997 change. The 1997 change was a last-minute, on-
the-floor-of-the-House amendment intended to make it clear that statutory probate courts can transfer any cause of action "against or on behalf of" a decedent's estate — not just cases meet the Seay v. Hall "appertaining to" estates criteria. See Seay v. Hall, 677 S. W. 2d 19 (Tex. 1984). Thus, a wrongful death and survival action, which does not meet the Seay v. Hall test, is transferable under Section 5B if it is brought by the personal representative on behalf of the decedent's estate. The 1997 change accomplished this result by changing the definition of "appertaining to estates" — now a proceeding in which the personal representative defends the estate or or which is brought by the personal representative on behalf of an estate is considered "appertaining to" estates.

The wording of the 1997 amendment left something to be desired. For example, while the primary reason for expanding the "appertaining to estates" definition was to broaden the Section 5B transfer power of statutory probate courts, the 1997 amendment stated that actions against or on behalf of an estate were "appertaining to and incident to an estate for the purposes of this section," arguably meaning Section 5A and not 5B.

The 1999 amendment cleans this up by deleting "for the purposes of this section" phrase. It also changes Subsection (e) so that it makes more sense, given the new, broader definition of "appertaining to estates."

The 1999 amendment takes effect September 1, 1999. HB 778 does not make clear whether or not it applies to persons dying after September 1, 1999, estates opened after September 1, 1999, or to any action pending on or after September 1, 1999, but the latter seems to be the most likely construction.

Sec. 5B. Transfer of Proceeding.

A judge of a statutory probate court on the motion of a party to the action or on the motion of a person interested in an estate, may transfer to his court from a district, county, or statutory court a cause of action appertaining to or incident to an estate pending in the statutory probate court or a cause of action in which a personal representative of an estate pending in the statutory probate court is a party and may consolidate the transferred cause of action with the other proceedings in the statutory probate court relating to that estate.

Added by Acts 1983, 68th Leg., p. 5228, ch. 958, Sec. 1, eff. Sept. 1, 1983. Amended by Acts 1999, 76th Leg., ch. ____ (HB 2580), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The 1999 change to Section 5B further clarifies that a statutory probate court may transfer to itself a proceeding in which the personal representative of an estate pending in such court is a party under the famous (or infamous, depending on one's point of view) Section 5B "reach out and touch" power. A 1997 amendment to Section 5A, clarified in 1999 (see the explanation following Section 5A above) indirectly made this the law by expanding the definition of "appertaining to estates." This amendment accomplishes the same thing in a more direct and easy to understand way.

In addition, the 1999 change to Section 5B enhances the power of the probate court to transfer related third-party actions. Take the example of an executor who sues a defendant in district court. If the defendant brings a third-
party action against another person for contribution and indemnity, the third-party action is not "appertaining to an estate" under the Section 5A definition because it is not "against or on behalf of" the estate. The change to Section 5B makes it clear that the probate court nevertheless can transfer the whole case — including the non-
appertaining third-party action — because the executor is a "party" to the cause of action.

HB 2580 provides that it takes effect September 1, 1999, "and applies only to a motion to transfer a cause of action filed on or after that date. A motion to transfer a cause of action filed before the effective date of this Act is governed by the law in effect on the date the motion was filed, and the former law is continued in effect for that purpose."

Sec. 5C. Actions to Collect Delinquent Property Taxes.

(a) This section applies only to a decedent's estate that:

(1) is being administered in a pending probate proceeding;

(2) owns or claims an interest in property against which a taxing unit has imposed ad valorem taxes that are delinquent; and

(3) is not being administered as an independent administration under Section 145 of this code.

(b) Notwithstanding any provision of this code to the contrary, if the probate proceedings are pending in a foreign jurisdiction or in a county other than the county in which the taxes were imposed, a suit to foreclose the lien securing payment of the taxes or to enforce personal liability for the taxes must be brought under Section 33.41, Tax Code, in a court of competent jurisdiction in the county in which the taxes were imposed.

(c) If the probate proceedings have been pending for four years or less in the county in which the taxes were imposed, the taxing unit may present a claim for the delinquent taxes against the estate to the personal representative of the estate in the probate proceedings.

(d) If the taxing unit presents a claim against the estate under Subsection (c) of this section:

(1) the claim of the taxing unit is subject to each applicable provision in Parts 4 and 5, Chapter VIII, of this code that relates to a claim or the enforcement of a claim in a probate proceeding; and

(2) the taxing unit may not bring a suit in any other court to foreclose the lien securing payment of the taxes or to enforce personal liability for the delinquent taxes before the first day after the fourth anniversary of the date the application for the probate proceeding was filed.

(e) To foreclose the lien securing payment of the delinquent taxes, the taxing unit must bring a suit under Section 33.41, Tax Code, in a court of competent jurisdiction for the county in which the taxes were imposed if:

(1) the probate proceedings have been pending in that county for more than four years; and

(2) the taxing unit did not present a delinquent tax claim under Subsection (c) of this section against the estate in the probate proceeding.

(f) In a suit brought under Subsection (e) of this section, the taxing unit:

(1) shall make the personal representative of the decedent's estate a party to the suit; and

(2) may not seek to enforce personal liability for the taxes against the estate of the decedent.

Added by Acts 1999, 76th Leg., ch. _____ (HB 3549), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 3549 was a comprehensive bill dealing with many procedural issues regarding ad valorem taxation. This new section of the Probate Code is an outgrowth of recent cases addressing the potential jurisdictional and/or venue conflicts arising when a taxing authority seeks to collect ad valorem taxes from the personal representative or beneficiaries of an estate. See Bailey v. Cherokee County Appraisal District, 862 S. W. 2d 581 (Tex. 1993) and Crawford v. Town of Flower Mound, 933 S. W. 2d 727 (Tex. App. — Fort Worth 1996, writ denied).

HB 3549 resolves this conflict by requiring a tax foreclosure suit to be brought in the county where the property is located, even if a probate proceeding is pending in another county.

This is one of those bills in which non-probate interests draft probate legislation. As is often the case, the drafters left us with a little confusion, especially over claims procedures. Also, while the drafters may have intended to trump Section 5B transfers, nothing in Section 5C appears to do that — if a tax foreclosure suit is "brought" in the county where real property is located, nothing in Section 5C would appear to preclude a statutory probate court from transferring the case to itself under Section 5B.

The new Section 5C applies to the estates of all decedents, regardless of the date of death, and to all causes of action pending on September 1, 1999, or brought after that date.

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 file-stamped [] 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.

Added by Acts 1997, 75th Leg., ch. 1302, Sec. 2, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The 1999 change means that only a file-stamped copy (not a certified copy) of a document establishing a will contest must be presented in order to get medical records.

This change applies only to the estate of a person who dies on or after September 1, 1999.

Sec. 15. Case Files [ ].

The county clerk shall maintain a case file for each decedent's estate in which a probate proceeding has been filed. The case file must contain [ ] all orders, judgments, [] and proceedings of the court and any other probate filing with the court, including all [ ]:

(1) [ ] applications for the probate of wills and for the granting of administration; []

(2) [ ] citations and notices, whether published or posted, with the returns thereon; []

(3) [ ] wills and the testimony upon which the same are admitted to probate, provided that the substance only of depositions shall be recorded; []

(4) [ ] bonds and official oaths; []

(5) [ ] inventories, appraisements, and lists of claims; []

(6) [ ] exhibits and accounts; []

(7) [ ] reports of hiring, renting, or sale; []

(8) [ ] applications for sale or partition of real estate and reports of sale and of commissioners of partition;[]

(9) [ ] applications for authority to execute leases for mineral development, or for pooling or unitization of lands, royalty, or other interest in minerals, or to lend or invest money; and []

(10) [ ] reports of lending or investing money.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1993, 73rd Leg., ch. 957, Sec. 10, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1142), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 1142 makes changes to how the clerk keeps probate records and is a recognition of the changing world in which we live. Rather than keeping a "probate minutes" book and a "claims docket,' HB 1142 permits the clerk to keep probate information electronically. Also, every probate filing is to be kept in a case file, rather than selective information being recorded in the "probate minutes" (see Section 15 as amended). Does "probate filing" include claims? If so, HB 1142 appears to permit clerks to abandon the bifurcated claims docket/probate docket system and keep everything in the case file with one electronic index.

HB 1142 amends Section 15, 17 and 18 and adds new Section 17A. It makes corresponding changes to Sections 625, 627 and 628 and adds new Section 627A regarding guardianships. It takes effect September 1, 1999.

Sec. 17. Maintaining Records in Lieu of Record Books.

In lieu of keeping the record books described by Sections 13, 14, and 16 of this code, the county clerk may maintain the information relating to a person's or estate's probate proceedings maintained in those record books on a computer file, on microfilm, in the form of a digitized optical image, or in another similar form of data compilation.

Sec. 17A. Index.

The county clerk shall properly index the records [ ] and [] keep the index [] open for public inspection, but may [] not release the index from the clerk's [ ] custody.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1142), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See explanation following Section 15.

Sec. 18. Use of Records as Evidence.

The record books or individual case files, including records on a computer file, on microfilm, in the form of a digitized optical image, or in another similar form of data compilation described in preceding sections [] of this code [], or certified copies or reproductions of the records [], shall be evidence in any court of this state [].

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. .Amended by Acts 1999, 76th Leg., ch. ___ (HB 1142), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See explanation following Section 15.

Sec. 52. Recorded Instruments as Prima Facie Evidence.

(a) A [] statement of facts concerning the family history, genealogy, marital status, or the identity of the heirs of a decedent shall be received in a proceeding to declare heirship, or in a [] suit involving title to real or personal property, as prima facie evidence of the facts therein stated, if the [ ] statement is contained in either an affidavit or any other instrument legally executed and acknowledged or sworn to before, and certified by, an officer authorized to take acknowledgments or oaths as applicable, or any judgment of a court of record, and if the [] affidavit or instrument has been of record for five years or more in the deed records of any county in this state in which such real or personal property is located at the time the suit is instituted, or in the deed records of any county of this state in which the decedent had his domicile or fixed place of residence at the time of his death. If there is any error in the statement of facts in such recorded affidavit or instrument, the true facts may be proved by anyone interested in the proceeding in which said affidavit or instrument is offered in evidence.

(b) An affidavit of facts concerning the identity of heirs of a decedent as to an interest in real property that is filed in a proceeding or suit described by Subsection (a) of this section may be in the form described by Section 52A of this code.

(c) An affidavit of facts concerning the identity of heirs of a decedent does not affect the rights of an omitted heir or a creditor of the decedent as otherwise provided by law. This statute shall be cumulative of all other statutes on the same subject, and shall not be construed as abrogating any right to present evidence or to rely on an affidavit of facts conferred by any other statute or rule of law.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1969, 61st Leg., p. 1922, ch. 641, Sec. 4, eff. June 12, 1969. Amended by Acts 1991, 72nd Leg., ch. 895, Sec. 5, eff. Sept. 1, 1991. Amended by Acts 1999, 76th Leg., ch. ____ (SB 1106), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

SB 1106 adopted a legislatively-approved form for heirship affidavit (or, in the statute's vernacular, an "affidavit of facts concerning the identify of heirs"). This primarily will be a help to members of the general public who choose to prepare and record these affidavits without the assistance of a lawyer, but it also probably will become the form of choice for lawyers as well. Hopefully its use will assure that certain minimal heirship facts are included in the affidavit so that title examiners are faced with fewer hard choices due to marginal affidavits.

The amendments to Section 52 authorize the form and new Section 52A sets forth the terms of the form itself. The changes made by SB 1106 apply to affidavits made on or after September 1, 1999, regardless of the date of death of the decedent.

Sec. 52A. Form of Affidavit of Facts Concerning Identity of Heirs.

An affidavit of facts concerning the identity of heirs of a decedent may be in substantially the following form:

AFFIDAVIT OF FACTS CONCERNING THE IDENTITY OF HEIRS

Before me, the undersigned authority, on this day personally appeared _____________ ("Affiant") (insert name of affiant) who, being first duly sworn, upon his/her oath states:

1. My name is ____________ (insert name of affiant), and I live at ______________ (insert address of affiant's residence). I am personally familiar with the family and marital history of _____________ ("Decedent") (insert name of decedent), and I have personal knowledge of the facts stated in this affidavit.

2. I knew decedent from ___________ (insert date) until ___________ (insert date). Decedent died on __________ (insert date of death). Decedent's place of death was __________ (insert place of death). At the time of decedent's death, decedent's residence was __________ (insert address of decedent's residence).

3. Decedent's marital history was as follows: _________ (insert marital history and, if decedent's spouse is deceased, insert date and place of spouse's death).

4. Decedent had the following children: __________ (insert name, birth date, name of other parent, and current address of child or date of death of child and descendants of deceased child, as applicable, for each child).

5. Decedent did not have or adopt any other children and did not take any other children into decedent's home or raise any other children, except: ___________ (insert name of child or names of children, or state "none").

6. (Include if decedent was not survived by descendants.) Decedent's mother was: __________ (insert name, birth date, and current address or date of death of mother, as applicable).

7. (Include if decedent was not survived by descendants.) Decedent's father was: __________ (insert name, birth date, and current address or date of death of father, as applicable).

8. (Include if decedent was not survived by descendants or by both mother and father.) Decedent had the following siblings: ___________ (insert name, birth date, and current address or date of death of each sibling and parents of each sibling and descendants of each deceased sibling, as applicable, or state "none").

9. (Optional.) The following persons have knowledge regarding the decedent, the identity of decedent's children, if any, parents, or siblings, if any: _____________ (insert names of persons with knowledge, or state "none").

10. Decedent died without leaving a written will. (Modify statement if decedent left a written will.)

11. There has been no administration of decedent's estate. (Modify statement if there has been administration of decedent's estate.)

12. Decedent left no debts that are unpaid, except: ____________ (insert list of debts, or state "none").

13. There are no unpaid estate or inheritance taxes, except: ______________ (insert list of unpaid taxes, or state "none").

14. To the best of my knowledge, decedent owned an interest in the following real property: ________________ (insert list of real property in which decedent owned an interest, or state "none").

15. (Optional.) The following were the heirs of decedent: __________ (insert names of heirs).

16. (Insert additional information as appropriate, such as size of the decedent's estate.)

Signed this ____ day of ____________, ______.

______________________

(signature of affiant)

State of ________________

County of _______________

Sworn to and subscribed to before me on ________________ (date) by _____________________ (insert name of affiant).

_______________________________

(signature of notarial officer)

(Seal, if any, of notary)	_______________________________

(printed name)

My commission expires: ________

Added by Acts 1999, 76th Leg., ch. ____ (SB 1106), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 52.

Sec. 95. Probate of Foreign Will Accomplished by Filing and Recording.

(a) Foreign Will May Be Probated. The written will of a testator who was not domiciled in Texas at the time of his death which would affect any real or personal property in this State, may be admitted to probate upon proof that it stands probated or established in any of the United States, its territories, the District of Columbia, or any foreign nation.

(b) Application and Citation.

(1) Will probated in domiciliary jurisdiction. If a foreign will has been admitted to probate or established in the jurisdiction in which the testator was domiciled at the time of his death, the application need state only that probate is requested on the basis of the authenticated copy of the foreign proceedings in which the will was probated or established. No citation or notice is required.

(2) Will probated in non-domiciliary jurisdiction. If a foreign will has been admitted to probate or established in any jurisdiction other than the domicile of the testator at the time of his death, the application for its probate shall contain all of the information required in an application for the probate of a domestic will, and shall also set out the name and address of each devisee and each person who will be entitled to a portion of the estate as an heir in the absence of a will. Citations shall be issued and served on each such devisee and heir by registered or certified mail.

(c) Copy of Will and Proceedings To Be Filed. A copy of the will and of the judgment, order, or decree by which it was admitted to probate or otherwise established, attested by and with the original signature of the clerk of the court or of [] such other official as has custody of such will or is in charge of probate records, with the seal of the court affixed, if there is a seal, together with a certificate containing the original signature of the judge or presiding magistrate of such court that the said attestation is in due form, shall be filed with the application. Original signatures shall not be required for recordation in the deed records pursuant to Sections 96 through 99 or Section 107 of this code.

(d) Probate Accomplished by Recording.

(1) Will admitted in domiciliary jurisdiction. If the will has been probated or established in the jurisdiction in which the testator was domiciled at the time of his death, it shall be the ministerial duty of the clerk to record such will and the evidence of its probate or establishment in the minutes of the court. No order of the court is necessary. When so filed and recorded, the will shall be deemed to be admitted to probate, and shall have the same force and effect for all purposes as if the original will had been probated by order of the court, subject to contest in the manner and to the extent hereinafter provided.

(2) Will admitted in non-domiciliary jurisdiction. If the will has been probated or established in another jurisdiction not the domicile of the testator, its probate in this State may be contested in the same manner as if the testator had been domiciled in this State at the time of his death. If no contest is filed, the clerk shall record such will and the evidence of its probate or establishment in the minutes of the court, and no order of the court shall be necessary. When so filed and recorded, it shall be deemed to be admitted to probate, and shall have the same force and effect for all purposes as if the original will had been probated by order of the court, subject to contest in the manner and to the extent hereafter provided.

(e) Effect of Foreign Will on Local Property. If a foreign will has been admitted to probate or established in the jurisdiction in which the testator was domiciled at the time of his death, such will, when probated as herein provided, shall be effectual to dispose of both real and personal property in this State irrespective of whether such will was executed with the formalities required by this Code.

(f) Protection of Purchasers. When a foreign will has been probated in this State in accordance with the procedure prescribed in this section for a will that has been admitted to probate in the domicile of the testator, and it is later proved in a proceeding brought for that purpose that the foreign jurisdiction in which the will was admitted to probate was not in fact the domicile of the testator, the probate in this State shall be set aside. If any person has purchased property from the personal representative or any legatee or devisee, in good faith and for value, or otherwise dealt with any of them in good faith, prior to the commencement of the proceeding, his title or rights shall not be affected by the fact that the probate in this State is subsequently set aside.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1971, 62nd Leg., p. 976, ch. 173, Sec. 9, eff. Jan. 1, 1972. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1176), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The impetus for HB 1176 was a problem that the Taylor County Clerk had with a foreign probate filing. The exemplified copies offered for filing included mechanical or computer-generated signatures for the clerk, or judge, or both. The clerk thought the exemplified copies should have original signatures, so HB 1176 was born.

Note that, as finally passed, HB 1176 requires original signatures when a foreign will is offered for probate, but apparently not when the exemplified copies merely are being recorded in the real property records. This is a little confusing, since Section 96 says that the certification, etc., required by Section 95 must be included, while Section 95 says original signatures are not required for Section 96 purposes. Nonetheless, the distinction between filings for probate (requiring original signatures) and real property filings (apparently not requiring original signatures) is fairly clear.

This change applies only to the application for the probate of a foreign will filed on or after September 1, 1999.

Sec. 105A. Appointment and Service of Foreign Banks and Trust Companies in Fiduciary Capacity.

(a) A corporate fiduciary that does not have its main office or a branch office in this state, hereinafter called "foreign corporate fiduciaries" [ ], having the corporate power to so act, may be appointed and may serve in the State of Texas as trustee (whether of a personal or corporate trust), executor, administrator, guardian of the estate, or in any other fiduciary capacity, whether the appointment be by will, deed, agreement, declaration, indenture, court order or decree, or otherwise, when and to the extent that the home state of the corporate fiduciary [ ] grants authority to serve in like fiduciary capacity to a corporate fiduciary whose home state is this state [ ].

(b) Before qualifying or serving in the State of Texas in any fiduciary capacity, as aforesaid, such a foreign corporate fiduciary [ ] shall file in the office of the Secretary of the State of the State of Texas (1) a copy of its charter, articles of incorporation or of association, and all amendments thereto, certified by its secretary under its corporate seal; (2) a duly executed instrument in writing, by its terms of indefinite duration and irrevocable, appointing the Secretary of State and his successors its agent for service of process upon whom all notices and processes issued by any court of this state may be served in any action or proceeding relating to any trust, estate, fund or other matter within this state with respect to which such foreign corporate fiduciary [ ] is acting in any fiduciary capacity, including the acts or defaults of such foreign corporate fiduciary [ ] with respect to any such trust, estate or fund; and (3) a written certificate of designation, which may be changed from time to time thereafter by the filing of a new certificate of designation, specifying the name and address of the officer, agent or other person to whom such notice or process shall be forwarded by the Secretary of State. Upon receipt of such notice or process, it shall be the duty of the Secretary of State forthwith to forward same by registered or certified mail to the officer, agent or other person so designated. Service of notice or process upon the Secretary of State as agent for such a foreign corporate fiduciary [ ] shall in all ways and for all purposes have the same effect as if personal service had been had within this state upon such foreign corporate fiduciary [ ].

(c) [

[] Any foreign corporate fiduciary [ ] acting in a fiduciary capacity in this state in strict accordance with the provisions of this Section shall not be deemed to be doing business in the State of Texas within the meaning of Article 8.01 of the Texas Business Corporation Act; and shall be deemed qualified to serve in such capacity under the provisions of Section 105 of this Code. [ ]

(d) [] The provisions hereof are in addition to, and not a limitation on, the provisions of Subtitle G, Finance Code, and the Texas Trust Company Act (Article 342a-1.001 et seq., Vernon's Texas Civil Statutes) [ ].

(e) [] Any foreign corporate fiduciary [ ] which shall violate any provision of this Section 105a shall be guilty of a misdemeanor and, upon conviction thereof, shall be subject to a fine of not exceeding Five Thousand Dollars ($5,000.00), and may, in the discretion of the court, be prohibited from thereafter serving in this state in any fiduciary capacity.

Added by Acts 1961, 57th Leg., p. 46, ch. 31, Sec. 1, eff. Aug. 28, 1961. Subsecs. (c), (d) amended by Acts 1995, 74th Leg., ch. 914, Sec. 10, eff. Sept. 1, 1995; Subsec. (c) amended by Acts 1997, 75th Leg., ch. 769, Sec. 5, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ____ (HB 2066), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The Interstate Banking Act, HB 2066, amended Section 105A, regarding foreign corporate fiduciaries, to be consistent with the state's restructured banking laws.

Sec. 128B. Notice When Will Probated after Four Years.

(a) Except as provided by Subsection (b) of this section, an applicant for the probate of a will under Section 73(a) of this code must give notice by service of process to each of the testator's heirs whose address can be ascertained by the applicant with reasonable diligence. The notice must be given before the probate of the testator's will.

(b) Notice under Subsection (a) of this section is not required to be provided to an heir who has delivered to the court an affidavit signed by the heir stating that the heir does not object to the offer of the testator's will for probate.

(c) The notice required by this section and an affidavit described by Subsection (b) of this section must also contain a statement that:

(1) the testator's property will pass to the testator's heirs if the will is not admitted to probate; and

(2) the person offering the testator's will for probate may not be in default for failing to present the will for probate during the four-year period immediately following the testator's death.

(d) If the address of any of the testator's heirs cannot be ascertained by the applicant with reasonable diligence, the court shall appoint an attorney ad litem to protect the interests of the unknown heirs after an application for the probate of a will is made under Section 73(a) of this code.

(e) In the case of an application for the probate of a will of a testator who has had another will admitted to probate, this section applies to a beneficiary of the testator's probated will instead of the testator's heirs.

Added by Acts 1999, 76th Leg., ch. _____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

New Section 128B was added to HB 1852 — the probate bill of the Real Estate, Probate and Trust Law Section of the State Bar of Texas — as part of a compromise between the probate lawyers' group and some of the statutory probate judges. In 1997, legislation backed by the statutory probate judges enacted Sections 89A and 89B and renumbered Section 89C regarding probating a will as a muniment of title. While the legislative history of the 1997 legislation made it clear that no substantive change was intended, on its face the 1997 legislation called into question the ability to probate a will as a muniment of title more than four years after the testator's death. (Section 89B required proof that four years had not elapsed since the testator's death, even though Section 73 permits probate of a will as a muniment of title more than four years after death in some cases.)

In HB 1852 as originally introduced, the Real Estate, Probate and Trust Law Section tried to clear up the confusion caused by the 1997 legislation, but some probate judges opposed the clean-up effort, jeopardizing HB 1852. As a compromise, the probate lawyers group agreed to the addition of Section 128B to HB 1852 while dropping the Section 89A and 89B clean-up effort.

New Section 128B sets forth new citation rules when a will is to be probated more than four years after the testator's death. It requires notice to the testator's heirs (or, if a prior will was probated, to the beneficiaries under the prior will) of an attempt to probate a will more than four years after the testator's death. Section 128B makes no sense unless it is still possible to probate a will as a muniment of title more than four years after the testator's death, so the probate lawyers indirectly have accomplished one of their purposes — assuring that the 1997 legislation did not take away that possibility. In so doing, however, the lawyers group had to accept this new citation requirement when probating stale wills.

Section 128B applies to the estates of persons dying on or after September 1, 1999. That means it will not apply to attempts to probate a stale will until at least September 1, 2003. The law in effect prior to the enactment of Section 128B (which did not include the new citation rules) applies to persons dying prior to September 1, 1999.

Sec. 149A. Accounting.

(a) Interested Person May Demand Accounting. At any time after the expiration of fifteen months from the date that an independent administration was created and the order appointing an independent executor was entered by the county court, any person interested in the estate may demand an accounting from the independent executor. The independent executor shall thereupon furnish to the person or persons making the demand an exhibit in writing, sworn and subscribed by the independent executor, setting forth in detail:

1. The property belonging to the estate which has come into his hands as executor.

2. The disposition that has been made of such property.

3. The debts that have been paid.

4. The debts and expenses, if any, still owing by the estate.

5. The property of the estate, if any, still remaining in his hands.

6. Such other facts as may be necessary to a full and definite understanding of the exact condition of the estate.

7. Such facts, if any, that show why the administration should not be closed and the estate distributed.

Any other interested person shall, upon demand, be entitled to a copy of any exhibit or accounting that has been made by an independent executor in compliance with this section.

(b) Enforcement of Demand. Should the independent executor not comply with a demand for an accounting authorized by this section within sixty days after receipt of the demand, the person making the demand may compel compliance by an action in the county court, as that term is defined by Section 3 of this code [ ]. After a hearing, the court shall enter an order requiring the accounting to be made at such time as it deems proper under the circumstances.

(c) Subsequent Demands. After an initial accounting has been given by an independent executor, any person interested in an estate may demand subsequent periodic accountings at intervals of not less than twelve months, and such subsequent demands may be enforced in the same manner as an initial demand.

(d) Remedies Cumulative. The right to an accounting accorded by this section is cumulative of any other remedies which persons interested in an estate may have against the independent executor thereof.

Added by Acts 1971, 62nd Leg., p. 980, ch. 173, Sec. 10, eff. Jan. 1, 1972. Amended by Acts 1973, 63rd Leg., p. 412, ch. 184, Sec. 1, eff. May 25, 1973; Acts 1977, 65th Leg., p. 1065, ch. 390, Sec. 6, eff. Sept. 1, 1977. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

In Section 3(e) "County Court" is defined to include all county and district courts exercising probate jurisdiction. HB 1852 amends Section 149A, 149B and 149C to be consistent with this definition.

Sec. 149B. Accounting and Distribution.

(a) In addition to or in lieu of the right to an accounting provided by Section 149A of this code, at any time after the expiration of two years from the date that an independent administration was created and the order appointing an independent executor was entered, a person interested in the estate may petition the county court, as that term is defined by Section 3 of this code, for an accounting and distribution. [ ] The court may order an accounting to be made with the court by the independent executor at such time as the court deems proper. The accounting shall include the information that the court deems necessary to determine whether any part of the estate should be distributed.

(b) On receipt of the accounting and, after notice to the independent executor and a hearing, unless the court finds a continued necessity for administration of the estate, the court shall order its distribution by the independent executor to the persons entitled to the property. If the court finds there is a continued necessity for administration of the estate, the court shall order the distribution of any portion of the estate that the court finds should not be subject to further administration by the independent executor. If any portion of the estate that is ordered to be distributed is incapable of distribution without prior partition or sale, the court shall order partition and distribution, or sale, in the manner provided for the partition and distribution of property incapable of division in estates administered under the direction of the county court.

(c) If all the property in the estate is ordered distributed by the executor and the estate is fully administered, the court also may order the independent executor to file a final account with the court and may enter an order closing the administration and terminating the power of the independent executor to act as executor.

Added by Acts 1979, 66th Leg., p. 1751, ch. 713, Sec. 18, eff. Aug. 27, 1979. Subsecs. (a) and (b) amended by Acts 1985, 69th Leg., ch. 882, Sec. 1, eff. Aug. 26, 1985; Subsec. (a) amended by Acts 1987, 70th Leg., ch. 760, Sec. 1, eff. Aug. 31, 1987; Subsec. (b) amended by Acts 1987, 70th Leg., ch. 565, Sec. 1, eff. June 18, 1987. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

In Section 3(e) "County Court" is defined to include all county and district courts exercising probate jurisdiction. HB 1852 amends Section 149A, 149B and 149C to be consistent with this definition.

Sec. 149C. Removal of Independent Executor.

(a) The county court, as that term is defined by Section 3 of this code[ ], on its own motion or on motion of any interested person, after the independent executor has been cited by personal service to answer at a time and place fixed in the notice, may remove an independent executor when:

(1) the independent executor fails to return within ninety days after qualification, unless such time is extended by order of the court, an inventory of the property of the estate and list of claims that have come to his knowledge;

(2) sufficient grounds appear to support belief that he has misapplied or embezzled, or that he is about to misapply or embezzle, all or any part of the property committed to his care;

(3) he fails to make an accounting which is required by law to be made;

(4) he fails to timely file the notice required by Section 128A of this code;

(5) he is proved to have been guilty of gross misconduct or gross mismanagement in the performance of his duties; or

(6) he becomes an incapacitated person, or is sentenced to the penitentiary, or from any other cause becomes legally incapacitated from properly performing his fiduciary duties.

(b) The order of removal shall state the cause of removal and shall direct by order the disposition of the assets remaining in the name or under the control of the removed executor. The order of removal shall require that letters issued to the removed executor shall be surrendered and that all letters shall be canceled of record. If an independent executor is removed by the court under this section, the court may, on application, appoint a successor independent executor as provided by Section 154A of this code.

(c) An independent executor who defends an action for his removal in good faith, whether successful or not, shall be allowed out of the estate his necessary expenses and disbursements, including reasonable attorney's fees, in the removal proceedings.

(d) Costs and expenses incurred by the party seeking removal incident to removal of an independent executor appointed without bond, including reasonable attorney's fees and expenses, may be paid out of the estate.

Added by Acts 1979, 66th Leg., p. 1751, ch. 713, Sec. 19, eff. Aug. 27, 1979. Subsec. (d) added by Acts 1987, 70th Leg., ch. 719, Sec. 1, eff. Aug. 31, 1987. Subsec. (a) amended by Acts 1989, 71st Leg., ch. 1035, Sec. 10, eff. Sept. 1, 1989; amended by Acts 1995, 74th Leg., ch. 1039, Sec. 10, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

In Section 3(e) "County Court" is defined to include all county and district courts exercising probate jurisdiction. HB 1852 amends Section 149A, 149B and 149C to be consistent with this definition.

Sec. 149D. Distribution of Remaining Estate Pending Judicial Discharge.

(a) On or before filing an action under Section 149E of this code, the independent executor must distribute to the beneficiaries of the estate any of the remaining assets or property of the estate that remains in the hands of the independent executor after all of the estate's debts have been paid, except for a reasonable reserve of assets that the independent executor may retain in a fiduciary capacity pending court approval of the final account.

(b) The court may review the amount of assets on reserve and may order the independent executor to make further distributions under this section.

Added by Acts 1999, 76th Leg., ch. ___ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

A major legislative objective in 1999 of the Real Estate, Probate and Trust Law Section of the State Bar of Texas was a procedure for the judicial discharge of independent executors. New Sections 149D, 149E, 149F and 149G are the realization of this objective.

Section 149D requires the independent executor to distribute all of the remaining estate property prior to filing a discharge action, but the independent executor is permitted to retain a "reasonable reserve" of assets pending court approval of the final account. This "reasonable reserve" is an amount of cash necessary to pay the independent executor's likely attorneys fees and expenses in the discharge action.

Section 149E permits an action under the Declaratory Judgments Act, Chapter 37 of the Civil Practices and Remedies Code, to discharge the independent executor from "any liability involving matters relating to the past administration of the estate that have been fully and fairly disclosed." Each estate beneficiary must be served with citation unless citation is waived. Presumably this includes beneficiaries of specific bequests who received their distributions early in the administration and not just residuary beneficiaries. Such beneficiaries have not real interest in the proceeding, but they probably will be willing to sign waivers.

Section 149E makes the requirement of filing a final account optional on the court — the court may require the filing of such an account and may audit, settle or approve the account, but the court is not required to do so. This is part of the compromise struck with some statutory probate judges, who originally opposed the judicial discharge of independent executors. The compromise nature of Section 149E is obvious, since Section 149D apparently anticipates that a final account will be filed, but Section 149E does not require it. Whether or not required by the court, however, the independent executor will almost always wish to file a final account so that the "fully and fairly disclosed" requirement can be met.

Section 149F provides that the costs of a proceeding "in relation to a final account required under Section 149E" may be paid by the independent executor out of estate funds, but the independent executor must "refund" any amount not approved by the court as a proper charge against the estate. This section makes more sense if Section 149E required a final account in all cases. Of course, the cost of preparing a final account should be a proper cost of the estate even if no judicial discharge is sought, so presumably the independent executor can (and, in fact, should) incur the cost of the final account as an estate expense before filing the judicial discharge action and shouldn't delay the process by waiting for the court to order the final account.

Section 149G provides that the rights and remedies in the new judicial discharge procedure are cumulative.

HB 1852 applies to the estates of persons dying on or after September 1, 1999. It will be interesting to see if courts will permit the judicial discharge of independent executors of estates of persons who died prior to September 1, 1999, or if they will consider the new procedure to be unavailable in those cases.

Sec. 149E. Judicial Discharge of Independent Executor.

(a) After an estate has been administered and if there is no further need for an independent administration of the estate, the independent executor of the estate may file an action for declaratory judgment under Chapter 37, Civil Practice and Remedies Code, seeking to discharge the independent executor from any liability involving matters relating to the past administration of the estate that have been fully and fairly disclosed.

(b) On the filing of an action under this section, each beneficiary of the estate shall be personally served with citation, except for a beneficiary who has waived the issuance and service of citation.

(c) In a proceeding under this section, the court may require the independent executor to file a final account that includes any information the court considers necessary to adjudicate the independent executor's request for a discharge of liability. The court may audit, settle, or approve a final account filed under this subsection.

Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 149D.

Sec. 149F. Court Costs and Other Charges Related to Final Account in Judicial Discharge.

(a) Except as ordered by the court, the independent executor is entitled to pay from the estate legal fees, expenses, or other costs of a proceeding incurred in relation to a final account required under Section 149E of this code.

(b) The independent executor shall be personally liable to refund any amount not approved by the court as a proper charge against the estate.

Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 149D.

Sec. 149G. Rights and Remedies Cumulative.

The rights and remedies conferred by Sections 149D, 149E, and 149F of this code are cumulative of other rights and remedies to which a person interested in the estate may be entitled under law.

Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 149D.

Sec. 194. Bonds of Personal Representatives of Estates.

Except when bond is not required under the provisions of this Code, before the issuance of letters testamentary or of administration, the recipient of letters shall enter into bond conditioned as required by law, payable to the county judge or probate judge of the county in which the probate proceedings are pending and to his successors in office. Such bonds shall bear the written approval of either of such judges in his official capacity, and shall be executed and approved in accordance with the following rules:

1. Court to Fix Penalty. The penalty of the bond shall be fixed by the judge, in an amount deemed sufficient to protect the estate and its creditors, as hereinafter provided.

2. Bond to Protect Creditors Only, When. If the person to whom letters testamentary or of administration is granted is also entitled to all of the decedent's estate, after payment of debts, the bond shall be in an amount sufficient to protect creditors only, notwithstanding the rules applicable generally to bonds of personal representatives of estates.

3. Before Fixing Penalty, Court to Hear Evidence. In any case where a bond is, or shall be, required of a personal representative of an estate, the court shall, before fixing the penalty of the bond, hear evidence and determine:

(a) The amount of cash on hand and where deposited, and the amount of cash estimated to be needed for administrative purposes, including operation of a business, factory, farm or ranch owned by the estate, and expenses of administration for one (1) year; and

(b) The revenue anticipated to be received in the succeeding twelve (12) months from dividends, interest, rentals, or use of real or personal property belonging to the estate and the aggregate amount of any installments or periodical payments to be collected; and

(c) The estimated value of certificates of stock, bonds, notes, or securities of the estate or ward, the name of the depository, if any, in which said assets are held for safekeeping, the face value of life insurance or other policies payable to the person on whose estate administration is sought, or to such estate, and such other personal property as is owned by the estate, or by one under disability; and

(d) The estimated amount of debts due and owing by the estate or ward.

4. Penalty of Bond. The penalty of the bond shall be fixed by the judge in an amount equal to the estimated value of all personal property belonging to the estate, or to the person under disability, together with an additional amount to cover revenue anticipated to be derived during the succeeding twelve (12) months from interest, dividends, collectible claims, the aggregate amount of any installments or periodical payments exclusive of income derived or to be derived from federal social security payments, and rentals for use of real and personal property; provided, that the penalty of the original bond shall be reduced in proportion to the amount of cash or value of securities or other assets authorized or required to be deposited or placed in safekeeping by order of court, or voluntarily made by the representative or by his sureties as hereinafter provided in Subdivisions 6 and 7 hereof.

5. Agreement as to Deposit of Assets. It shall be lawful, and the court may require such action when deemed in the best interest of an estate, for a personal representative to agree with the surety or sureties, either corporate or personal, for the deposit of any or all cash, and safekeeping of other assets of the estate in a financial institution as defined by Section 201.101, Finance Code, with its main office or a branch office in this state [ ] and qualified to act as a depository in this State [] under the laws of this State or of the United States, if such deposit is otherwise proper, in such manner as to prevent the withdrawal of such moneys or other assets without the written consent of the surety, or an order of the court made on such notice to the surety as the court shall direct. No such agreement shall in any manner release from or change the liability of the principal or sureties as established by the terms of the bond.

6. Deposits Authorized or Required, When. Cash or securities or other personal assets of an estate or which an estate is entitled to receive may, and if deemed by the court in the best interest of such estate shall, be deposited or placed in safekeeping as the case may be, in one or more of the depositories hereinabove described upon such terms as shall be prescribed by the court. The court in which the proceedings are pending, upon its own motion, or upon written application of the representative or of any other person interested in the estate may authorize or require additional assets of the estate then on hand or as they accrue during the pendency of the probate proceedings to be deposited or held in safekeeping as provided above. The amount of the bond of the personal representative shall be reduced in proportion to the cash so deposited, or the value of the securities or other assets placed in safekeeping. Such cash so deposited, or securities or other assets held in safekeeping, or portions thereof, may be withdrawn from a depository only upon order of the court, and the bond of the personal representative shall be increased in proportion to the amount of cash or the value of securities or other assets so authorized to be withdrawn.

7. Representative May Deposit Cash or Securities of His Own in Lieu of Bond. It shall be lawful for the personal representative of an estate, in lieu of giving surety or sureties on any bond which shall be required of him, or for the purpose of reducing the amount of such bond, to deposit out of his own assets cash or securities acceptable to the court, with a depository such as named above or with any other corporate depository approved by the court, if such deposit is otherwise proper, said deposit to be equal in amount or value to the amount of the bond required, or the bond reduced by the value of assets so deposited.

8. Rules Applicable to Making and Handling Deposits in Lieu of Bond or to Reduce Penal Sum of Bond.

(a) A receipt for a deposit in lieu of surety or sureties shall be issued by the depository, showing the amount of cash or, if securities, the amount and description thereof, and agreeing not to disburse or deliver the same except upon receipt of a certified copy of an order of the court in which the proceedings are pending, and such receipt shall be attached to the representative's bond and be delivered to and filed by the county clerk after approval by the judge.

(b) The amount of cash or securities on deposit may be increased or decreased, by order of the court from time to time, as the interest of the estate shall require.

(c) Deposits in lieu of sureties on bonds, whether of cash or securities, may be withdrawn or released only on order of a court having jurisdiction.

(d) Creditors shall have the same rights against the representative and such deposits as are

provided for recovery against sureties on a bond.

(e) The court may on its own motion, or upon written application by the representative or by any other person interested in the estate, require that adequate bond be given by the representative in lieu of such deposit, or authorize withdrawal of the deposit and substitution of a bond with sureties therefor. In either case, the representative shall file a sworn statement showing the condition of the estate, and unless the same be filed within twenty (20) days after being personally served with notice of the filing of an application by another, or entry of the court's motion, he shall be subject to removal as in other cases. The deposit may not be released or withdrawn until the court has been satisfied as to the condition of the estate, has determined the amount of bond, and has received and approved the bond.

9. Withdrawal of Deposits When Estate Closed. Upon the closing of an estate, any such deposit or portion thereof remaining on hand, whether of the assets of the representative, or of the assets of the estate, or of the surety, shall be released by order of court and paid over to the person or persons entitled thereto. No writ of attachment or garnishment shall lie against the deposit, except as to claims of creditors of the estate being administered, or persons interested therein, including distributees and wards, and then only in the event distribution has been ordered by the court, and to the extent only of such distribution as shall have been ordered.

10. Who May Act as Sureties. The surety or sureties on said bonds may be authorized corporate sureties, or personal sureties.

11. Procedure When Bond Exceeds Fifty Thousand Dollars ($50,000). When any such bond shall exceed Fifty Thousand Dollars ($50,000) in penal sum, the court may require that such bond be signed by two (2) or more authorized corporate sureties, or by one such surety and two (2) or more good and sufficient personal sureties. The estate shall pay the cost of a bond with corporate sureties.

12. Qualifications of Personal Sureties. If the sureties be natural persons, there shall not be less than two (2), each of whom shall make affidavit in the manner prescribed in this Code, and the judge shall be satisfied that he owns property within this State, over and above that exempt by law, sufficient to qualify as a surety as required by law. Except as provided by law, only one surety is required if the surety is an authorized corporate surety; provided, a personal surety, instead of making affidavit, or creating a lien on specific real estate when such is required, may, in the same manner as a personal representative, deposit his own cash or securities, in lieu of pledging real property as security, subject, so far as applicable, to the provisions covering such deposits when made by personal representatives.

13. Bonds of Temporary Appointees. In case of a temporary administrator, the bond shall be in such sum as the judge shall direct.

14. Increased or Additional Bonds When Property Sold, Rented, Leased for Mineral Development, or Money Borrowed or Invested. The provisions in this Section with respect to deposit of cash and safekeeping of securities shall cover, so far as they may be applicable, the orders to be entered by the court when real or personal property of an estate has been authorized to be sold or rented, or money borrowed thereon, or when real property, or an interest therein, has been authorized to be leased for mineral development or subjected to unitization, the general bond having been found insufficient.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1957, 55th Leg., p. 53, ch. 31, Sec. 6(b), eff. Aug. 22, 1957; Acts 1971, 62nd Leg., p. 983, ch. 173, Sec. 14, eff. Jan. 1, 1972; Acts 1979, 66th Leg., p. 1754, ch. 713, Sec. 25, eff. Aug. 27, 1979. Amended by Acts 1993, 73rd Leg., ch. 957, Sec. 31, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ____ (HB 2066), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The Interstate Banking Act, HB 2066, amended Section 194(5), to be consistent with the state's restructured banking laws. Note that amended Section 194(5) permits the court to require safekept funds to be kept in a financial institution with a main or branch office in Texas.

Sec. 221A. Change of Resident Agent.

(a) A personal representative may change its resident agent to accept service of process in a probate proceeding or other action relating to the estate by filing a statement of the change titled "Designation of Successor Resident Agent" with the court in which the probate proceeding is pending. The statement must contain the names and addresses of the:

(1) personal representative;

(2) resident agent; and

(3) successor resident agent.

(b) The designation of a successor resident agent made in a statement filed under this section takes effect on the date on which the statement is filed with the court.

Added by Acts 1999, 76th Leg., ch. ___ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The Probate Code long has required a nonresident personal representative to designate a resident agent. However, there has been no procedure for changing the resident agent or for the resident agent to resign.

HB 1852 enacts Section 221A, which sets forth a procedure for changing resident agents, and Section 221B, which sets forth a procedure for a resident agent to resign. It also amends Section 222, giving the court the power to remove a personal representative if a new resident agent is not appointed.

Sections 221A and 221B apply to changes of resident agents on or after September 1, 1999. The change to Section 222 applies to a motion for removal of a personal representative filed on or after September 1, 1999.

Sec. 221B. Resignation of Resident Agent.

(a) A resident agent of a personal representative may resign as the resident agent by giving notice to the personal representative and filing with the court in which the probate proceeding is pending a statement titled "Resignation of Resident Agent" that:

(1) contains the name of the personal representative;

(2) contains the address of the personal representative most recently known by the resident agent;

(3) states that notice of the resignation has been given to the personal representative and that the personal representative has not designated a successor resident agent; and

(4) contains the date on which the notice of the resignation was given to the personal representative.

(b) The resident agent shall send, by certified mail, return receipt requested, a copy of a resignation statement filed under Subsection (a) of this section to:

(1) the personal representative at the address most recently known by the agent; and

(2) each party in the case or the party's attorney or other designated representative of record.

(c) The resignation of a resident agent takes effect on the date on which the court enters an order accepting the agent's resignation. A court may not enter an order accepting the agent's resignation unless the agent complies with the requirements of this section.

Added by Acts 1999, 76th Leg., ch. ___ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 221A.

Sec. 222. Removal.

(a) Without Notice. (1) The court, on its own motion or on motion of any interested person, and without notice, may remove any personal representative, appointed under provisions of this Code, who:

(A) Neglects to qualify in the manner and time required by law;

(B) Fails to return within ninety days after qualification, unless such time is extended by order of the court, an inventory of the property of the estate and list of claims that have come to his knowledge;

(C) Having been required to give a new bond, fails to do so within the time prescribed;

(D) Absents himself from the State for a period of three months at one time without permission of the court, or removes from the State;

(E) Cannot be served with notices or other processes because of the fact that the:

(i) personal representative's [ ] whereabouts are unknown;

(ii) personal representative [ ] is eluding service; or

(iii) personal representative is a nonresident of this state who does not have a resident agent to accept service of process in any probate proceeding or other action relating to the estate; or

(F) Has misapplied, embezzled, or removed from the State, or is about to misapply, embezzle, or remove from the State, all or any part of the property committed to the personal representative's care.

(2) The court may remove a personal representative under Paragraph (F), Subdivision (1), of this subsection only on the presentation of clear and convincing evidence given under oath.

(b) With Notice. The court may remove a personal representative on its own motion, or on the complaint of any interested person, after the personal representative has been cited by personal service to answer at a time and place fixed in the notice, when:

(1) Sufficient grounds appear to support belief that he has misapplied, embezzled, or removed from the state, or that he is about to misapply, embezzle, or remove from the state, all or any part of the property committed to his care;

(2) He fails to return any account which is required by law to be made;

(3) He fails to obey any proper order of the court having jurisdiction with respect to the performance of his duties;

(4) He is proved to have been guilty of gross misconduct, or mismanagement in the performance of his duties;

(5) He becomes an incapacitated person, or is sentenced to the penitentiary, or from any other cause becomes incapable of properly performing the duties of his trust;

(6) As executor or administrator, he fails to make a final settlement within three years after the grant of letters, unless the time be extended by the court upon a showing of sufficient cause supported by oath; or

(7) As executor or administrator, he fails to timely file the notice required by Section 128A of this code.

(c) Order of Removal. The order of removal shall state the cause thereof. It shall require that any letters issued to the one removed shall, if he has been personally served with citation, be surrendered, and that all such letters be cancelled of record, whether delivered or not. It shall further require, as to all the estate remaining in the hands of a removed person, delivery thereof to the person or persons entitled thereto, or to one who has been appointed and has qualified as successor representative.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1969, 61st Leg., p. 1922, ch. 641, Sec. 11, eff. June 12, 1969. Subsec. (b) amended by Acts 1989, 71st Leg., ch. 1035, Sec. 11, eff. Sept. 1, 1989; Subsecs. (a), (b)

amended by Acts 1993, 73rd Leg., ch. 905, Sec. 11, eff. Sept. 1, 1993; Subsecs. (b), (c) amended by Acts 1993, 73rd Leg., ch. 957, Sec. 37, eff. Sept. 1, 1993; Subsecs. (a), (b) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 13, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 221A.

Sec. 270. Liability of Homestead for Debts.

The homestead shall not be liable for the payment of any of the debts of the estate, except for:

(1) the purchase money thereof; []

(2) the taxes due thereon; [ ]

(3) work and material used in constructing improvements thereon if the requirements of Section 50(a)(5), Article XVI, Texas Constitution, are met;

(4) an owelty of partition imposed against the entirety of the property by court order or by a written agreement of the parties to the partition, including a debt of one spouse in favor of the other spouse resulting from a division or an award of a family homestead in a divorce proceeding;

(5) the refinance of a lien against a homestead, including a federal tax lien resulting from the tax debt of both spouses, if the homestead is a family homestead, or from the tax debt of the decedent;

(6) an extension of credit on the homestead if the requirements of Section 50(a)(6), Article XVI, Texas Constitution, are met; or

(7) a reverse mortgage [ ].

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1979, 66th Leg., p. 35, ch. 24, Sec. 1, eff. Aug. 27, 1979. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1852), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 1852 amended Section 270 to make it consistent with recent constitutional amendments regarding homesteads and home equity lending in Texas.

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.

Class 3. Secured claims for money under Section 306(a)(1), including tax liens, 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.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1971, 62nd Leg., p. 2992, ch. 988, Sec. 3, eff. June 15, 1971; Acts 1979, 66th Leg., p. 869, ch. 394, Sec. 1, eff. Aug. 27, 1979. Amended by Acts 1981, 67th Leg., p. 242, ch. 102, Sec. 8, eff. Aug. 31, 1981; Acts 1981, 67th Leg., p. 1785, ch. 389, Secs. 38A, 39(l), eff. Jan. 1, 1982; Acts 1987, 70th Leg., ch. 1049, Sec. 51, eff. Sept. 1, 1987; Acts 1987, 70th Leg., ch. 1052, Sec. 2.07, eff. Sept. 1, 1987; Acts 1989, 71st Leg., ch. 2, Sec. 14.27(a)(6), eff. Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1035, Sec. 13, eff. Sept. 1, 1989; Acts 1995, 74th Leg., ch. 1054, Sec. 24, eff. Jan. 1, 1996; Acts 1997, 75th Leg., ch. 165, Sec. 30.243, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1361, Sec. 2, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1348), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 1348 amended Section 322 to give a higher priority to child support claims against a decedent's estate. Note that it only applies to principal and accrued interest of such claims that have been confirmed and reduced to money judgment.

The changes to Section 322 apply to the estates of persons dying on or after September 1, 1999.

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1961, 57th Leg., p. 42, ch. 28, Sec. 1, eff. March 25, 1961. Amended by Acts 1993, 73rd Leg., ch. 846, Sec. 22, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 2066), eff. Sept. 1, 1999. Repealed by Acts 1999, 76th Leg., ch. ____ (HB 1662), eff. June 19, 1999.

Explanation of 1999 Amendment

Part 10, Chapter VIII of the Probate Code, containing only Section 389, has been out-of-place and unnecessary since 1993, when the guardianship provisions of the Probate Code were recodified into Chapter 13 of the Code, Sections 601 et seq. The Interstate Banking Bill, HB 2066, amended Section 389 to make it consistent with the state's restructured banking laws. HB 1662 repealed Part 10, Chapter VIII altogether, effective June 19, 1999. Since HB 1662 was enacted after HB 2066, its repeal should take precedence over HB 2066's amendment. In the big picture, however, it doesn't matter — Section 855 does what Section 389 was intended to do.

Sec. 404. Closing Administration of Estates of Decedents [ ].

[] Administration of the estates of decedents [ ] shall be settled and closed[

[] when all the debts known to exist against the estate of a deceased person have been paid, or when they have been paid so far as the assets in the hands of an administrator or executor of such estate will permit, and when there is no further need for administration[

[

[

[

[

[

[

[

[

[

[

[ ].

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan. 1, 1956. Amended by Acts 1975, 64th Leg., p. 104, ch. 45, Sec. 2, eff. Sept. 1, 1975. Amended by Acts 1985, 69th Leg., ch. 881, Sec. 2, eff. Aug. 26, 1985; Subsec. (c) amended by Acts 1989, 71st Leg., ch. 1035, Sec. 15, eff. Sept. 1, 1989; Subsec. (a) amended by Acts 1993, 73rd Leg., ch. 712, Sec. 5, eff. Sept. 1, 1993. Amended by Acts 1993, 73rd Leg., ch. 57, Sec. 68, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1660), eff. June 19, 1999.

Explanation of 1999 Amendment

HB 1660 was yet another housecleaning bill, cleaning up lost references to guardianships in the non-guardianship part of the Probate Code.

Sec. 406. Procedure in Case of Neglect or Failure to File Final Account; Payments Due Meantime.

(a) If a personal representative charged with the duty of filing a final account fails or neglects so to do at the proper time, the court shall [], upon its own motion, or [] upon the written complaint of any one interested in the decedent's [ ] estate which has been administered, cause such representative to be cited to appear and present such account within the time specified in the citation.

(b) [

[

[] If the whereabouts of the personal representative and heirs of a decedent are unknown and a complaint has not been filed by anyone interested in the decedent's estate, the court may, on or after the fourth anniversary after the last date on which letters testamentary or of administration are issued by the court clerk, close the estate without a final accounting and without appointing a successor personal representative.

[ ]

Acts 1955, 54th Leg., p. 88, ch. 55, eff. Jan 1, 1956. Amended by Acts 1979, 66th Leg., p. 1876, ch. 758, Sec. 3, eff. Aug. 27, 1979. Amended by Acts 1993, 73rd Leg., ch. 898, Sec. 1, eff. June 19, 1993. Amended by Acts 1993, 73rd Leg., ch. 957, Sec. 70, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1661), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 1661 was yet another housecleaning bill, cleaning up lost references to guardianships in the non-guardianship part of the Probate Code.

Sec. 601. Definitions.

In this chapter:

(1) "Attorney ad litem" means an attorney who is appointed by a court to represent and advocate on behalf of a proposed ward, an incapacitated person, or an unborn person in a guardianship proceeding.

(2) "Authorized corporate surety" means a domestic or foreign corporation authorized to do business in this state to issue surety, guaranty, or indemnity bonds guaranteeing the fidelity of guardians.

(3) "Child" includes a biological or adopted child, whether adopted by a parent under a statutory procedure or by acts of estoppel.

(4) "Claims" includes a liability against the estate of a minor or an incapacitated person and debts due to the estate of a minor or an incapacitated person.

(5) "Corporate fiduciary" means a financial institution as defined by Section 201.101, Finance Code, [ ] having trust powers, existing or doing business under the laws of this state, another state, or [] the United States, that is authorized by law to act under the order or appointment of any court of record, without giving bond, as a guardian, receiver, trustee, executor, or administrator, or, although without general depository powers, as a depository for any money paid into court, or to become sole guarantor or surety in or on any bond required to be given under the laws of this state.

(6) "Court investigator" means a person appointed by a statutory probate court under Section 25.0025, Government Code.

(7) "Court" or "probate court" means a county court in the exercise of its probate jurisdiction, a court created by statute and authorized to exercise original probate jurisdiction, or a district court exercising original probate jurisdiction in contested matters.

(8) "Estate" or "guardianship estate" means the real and personal property of a ward or deceased ward, both as the property originally existed and as has from time to time changed in form by sale, reinvestment, or otherwise, and as augmented by any accretions and additions to (including any property to be distributed to the representative of the deceased ward by the trustee of a trust that terminates on the ward's death) or substitutions for the property, and as diminished by any decreases to or distributions from the property.

(9) "Exempt property" refers to that property of a deceased ward's estate that is exempt from execution or forced sale by the constitution or laws of this state, and to the allowance in lieu of the property.

(10) "Guardian" means a person who is appointed guardian under Section 693 of this code, or a temporary or successor guardian. Except as expressly provided otherwise, "guardian" includes the guardian of the estate and the guardian of the person of an incapacitated person.

(11) "Guardian ad litem" means a person who is appointed by a court to represent the best interests of an incapacitated person in a guardianship proceeding.

(12) "Guardianship program" means a local, county, or regional program that provides guardianship and related services to an incapacitated person or other person who needs assistance in making decisions concerning the person's own welfare or financial affairs.

(13) "Incapacitated person" means:

(A) a minor;

(B) an adult individual who, because of a physical or mental condition, is substantially unable to

provide food, clothing, or shelter for himself or herself, to care for the individual's own physical health, or to manage the individual's own financial affairs;

(C) a missing person; or

(D) a person who must have a guardian appointed to receive funds due the person from any governmental source.

(14) "Interested persons" or "persons interested" means an heir, devisee, spouse, creditor, or any other person having a property right in, or claim against, the estate being administered or a person interested in the welfare of an incapacitated person, including a minor.

(15) "Minor" means a person who is younger than 18 years of age and who has never been married or who has not had the person's disabilities of minority removed for general purposes.

(16) "Minutes" means the guardianship minutes.

(17) "Missing person" has the meaning assigned by Section 79.001, Human Resources Code.

(18) "Mortgage" or "lien" includes a deed of trust; vendor's lien; chattel mortgage; mechanic's, materialman's, or laborer's lien; judgment, attachment, or garnishment lien; pledge by hypothecation; and a federal or state tax lien.

(19) "Next of kin" includes an adopted child, the descendants of an adopted child, and the adoptive parent of an adopted child.

(20) "Parent" means the mother of a child, a man presumed to be the biological father of a child, a man who has been adjudicated to be the biological father of a child by a court of competent jurisdiction, or an adoptive mother or father of a child, but does not include a parent as to whom the parent-child relationship has been terminated.

(21) "Person" includes natural persons, corporations, and guardianship programs.

(22) "Personal property" includes an interest in goods, money, choses in action, evidence of debts, and chattels real.

(23) "Personal representative" or "representative" includes a guardian, and a successor guardian.

(24) "Private professional guardian" means a person, other than an attorney or a corporate fiduciary, who is engaged in the business of providing guardianship services.

(25) "Proceedings in guardianship," "guardianship matter," "guardianship matters," "guardianship proceeding," and "proceedings for guardianship" are synonymous and include a matter or proceeding relating to a guardianship or any other matter addressed by this chapter.

(26) "Property" includes both real and personal property.

(27) "Proposed ward" means a person alleged to be incapacitated in a guardianship proceeding.

(28) "Real property" includes estates and interests in lands, corporeal or incorporeal, legal or equitable, other than chattels real.

(29) "Statutory probate court" means a statutory court designated as a statutory probate court under Chapter 25, Government Code. A county court at law exercising probate jurisdiction is not a statutory probate court under this chapter unless the court is designated a statutory probate court under Chapter 25, Government Code.

(30) "Surety" includes a personal and a corporate surety.

(31) "Ward" is a person for whom a guardian has been appointed.

(32) The singular number includes the plural; the plural number includes the singular.

(33) The masculine gender includes the feminine and neuter.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 1039, Sec. 15, eff. Sept. 1, 1995; Subsec. (17) amended by Acts 1997, 75th Leg., ch. 1376, Sec. 1, eff. Sept. 1, 1997; Subsec. (29) amended by Acts 1997, 75th Leg., ch. 52, Sec. 2, eff. Sept. 1, 1997. Subsec. (5) amended by Acts 1999, 76th Leg., ch. _____ [HB 2066], eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The Interstate Banking Act, HB 2066, amended subsection (5) — the definition of "corporate fiduciary" — to be consistent with the state's restructured banking laws.

Sec. 606. District Court and Other Court of Record Jurisdiction.

(a) The district court has original control and jurisdiction over guardians and wards under regulations as may be prescribed by law.

(b) In those counties in which there is no statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court, all applications, petitions and motions regarding guardianships, mental health matters, and other matters covered by this chapter shall be filed and heard in the county court, except that in contested guardianship matters, the judge of the county court may on the judge's own motion, or shall on the motion of any party to the proceeding, according to the motion, request as provided by Section 25.0022, Government Code, the assignment of a statutory probate court judge to hear the contested portion of the proceeding, or transfer the contested portion of the proceeding to the district court, which may hear the transferred contested matters as if originally filed in the district court. If the judge of the county court has not transferred a contested guardianship matter to the district court at the time a party files a motion for assignment of a statutory probate court judge, the county judge shall grant the motion and may not transfer the matter to district court unless the party withdraws the motion. A statutory probate court judge assigned to a contested probate matter as provided by this subsection has for that matter the jurisdiction and authority granted to a statutory probate court by Sections 607 and 608 of this code. The county court continues 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. In contested matters transferred to the district court as provided by this subsection, the district court, concurrently with the county court, has the general jurisdiction of a probate court. On resolution of all pending contested matters, the district court shall transfer the contested portion of the guardianship proceeding to the county court for further proceedings not inconsistent with the orders of the district court. If a contested portion of the proceeding is transferred to a district court under this subsection, the clerk of the district court may perform in relation to the transferred portion of the proceeding any function a county clerk may perform in that type of contested proceeding.

(c) In those counties in which there is a statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court, all applications, petitions and motions regarding guardianships, mental illness matters, or other matters addressed by this chapter shall be filed and heard in those courts and the constitutional county court, rather than in the district courts, unless otherwise provided by the legislature, and the judge of a county court may hear any of those matters sitting for the judge of any other county court. Except as provided by Section 608 of this code, in contested guardianship matters, the judge of the constitutional county court may on the judge's own motion, and shall on the motion of a party to the proceeding, transfer the proceeding to the statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court. The court to which the proceeding is transferred may hear the proceeding as if originally filed in the court.

(d) A statutory probate court has concurrent jurisdiction with the district court in all actions by or against a person in the person's capacity as guardian.

(e) A court that exercises original probate jurisdiction has the power to hear all matters incident to an estate. When a surety is called on to perform in place of a guardian or former guardian, a court exercising original probate jurisdiction may award judgment against the guardian or former guardian in favor of the surety of the guardian or former guardian in the same suit, even if the ward has died, regained capacity, or the ward's disabilities of minority have been removed.

(f) A final order of a court that exercises original probate jurisdiction is appealable to a court of appeals.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Subsec. (b) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 16, eff. Sept. 1, 1995; Subsec. (e) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 17, eff. Sept. 1, 1995.1997. Subsec. (b) amended by Acts 1999, 76th Leg., ch. ____ (HB 1607), eff. Aug. 30, 1999.

Explanation of 1999 Amendment

So-called "constitutional" county courts cannot hear contested guardianship proceedings if any party objects or if the court decides not to hear the matter on its own motion. Prior to the 1999 change, the county court had two options for getting rid of the contested proceeding: it could either transfer it to the district court or ask the presiding statutory probate court judge to assign a statutory probate judge to hear the proceeding. Under prior law, there was no priority given to either option — the county court was free either to transfer it to district court or ask for a statutory probate court judge. If a statutory probate court judge was assigned to hear the proceeding, under prior law he or she did not bring along the "jurisdictional toolbox" — the broad "appertaining to" definition of statutory probate courts and the Section 608 transfer power.

The 1999 amendment to subsection (b) does two things: First, it gives a priority to the statutory probate court assignment option. If the county court has not transferred the case to district court prior to receiving a motion for assignment from either party, it must ask for the assignment of a statutory probate court judge to hear the case. Second, if a statutory probate court judge is assigned to hear the case, he or she brings the toolbox along — including the Section 608 transfer power.

The 1999 amendment has no effective date provision, so it becomes effective 90 days after the legislative session ended, or on August 30, 1999. Because it has no effective date provision, it is unclear whether it applies to guardianships created after August 30, 1999, proceedings filed after August 30, 1999, or motions for assignment filed after August 30, 1999, although the latter seems the most obvious construction.

Sec. 607. Matters Appertaining and Incident to an Estate.

(a) In a proceeding in a constitutional county court or a statutory county court at law, the phrases "appertaining to estates" and "incident to an estate" in this chapter include the appointment of guardians, the issuance of letters of guardianship, a claim by or against a guardianship estate, all actions for trial of title to land incident to a guardianship estate and for the enforcement of liens incident to a guardianship estate, all actions for trial of the right of property incident to a guardianship estate, and generally all matters relating to the settlement, partition, and distribution of a guardianship estate.

(b) In a proceeding in a statutory probate court or district court, the phrases "appertaining to estates" and "incident to an estate" in this chapter include the appointment of guardians, the issuance of letters of guardianship, all claims by or against a guardianship estate, all actions for trial of title to land and for the enforcement of liens on the land, all actions for trial of the right of property, and generally all matters relating to the settlement, partition, and distribution of a guardianship estate. A statutory probate court, in the exercise of its jurisdiction and notwithstanding any other provision of this chapter, may hear all suits, actions, and applications filed against or on behalf of any guardianship; all such suits, actions, and applications are appertaining to and incident to an estate. In a situation in which the jurisdiction of a statutory probate court is concurrent with that of a district court, a cause of action appertaining to or incident to a guardianship estate shall be brought in a statutory probate court rather than in the district court.

(c) In all actions by or against a person in the person's capacity as a guardian, a statutory probate court has concurrent jurisdiction with a district court.

(d) A statutory probate court may exercise the pendent and ancillary jurisdiction necessary to promote judicial efficiency and economy.

(e) Subsection [ ] (d) of this section applies [] whether or not the matter is appertaining to or incident to a guardianship estate.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ____(HB 777), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 777 amends Section 607 to make a parallel change to the one made to Section 5A (regarding decedent's estates) in 1997. In addition, HB 777 makes the same clean-up changes that HB 778 makes to Section 5A this session.

The 1997 change to Section 5A was a last-minute, on-the-floor-of-the-House amendment intended to make it clear that statutory probate courts can transfer any cause of action "against or on behalf of" a decedent's estate — not just cases meet the Seay v. Hall "appertaining to" estates criteria. See Seay v. Hall, 677 S. W. 2d 19 (Tex. 1984). Thus, a wrongful death and survival action, which does not meet the Seay v. Hall test, is transferable under Section 5B if it is brought by the personal representative on behalf of the decedent's estate. The 1997 change accomplished this result by changing the definition of "appertaining to estates" — now a proceeding in which the personal representative defends the estate or or which is brought by the personal representative on behalf of an estate is considered "appertaining to" estates.

The 1997 change to Section 5A did not affect guardianships. HB 777 makes the same change to the guardianship equivalent to Section 5A — Section 607 — and cleans up the awkward language from the hurried 1997 amendment to Section 5A.

The 1999 amendment takes effect September 1, 1999. HB 777 does not make clear whether or not it applies to guardianships created after September 1, 1999, proceedings filed after September 1, 1999, or to any action pending on or after September 1, 1999, but the latter seems to be the most likely construction.

Sec. 608. Transfer of Guardianship Proceeding.

A judge of a statutory probate court, on the motion of a party to the action or of a person interested in a guardianship, may transfer to the judge's court from a district, county, or statutory court a cause of action appertaining to or incident to a guardianship estate that is pending in the statutory probate court or a cause of action in which a personal representative of an estate pending in the statutory probate court is a party and may consolidate the transferred cause of action with the other proceedings in the statutory probate court relating to the guardianship estate.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ____ (HB 2580), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The 1999 change to Section 608 further clarifies that a statutory probate court may transfer to itself a proceeding in which the guardian of an estate pending in such court is a party under the famous (or infamous, depending on one's point of view) Section 608 "reach out and touch" power.

In addition, the 1999 change to Section 608 enhances the power of the probate court to transfer related third-party actions. Take the example of a guardian who sues a defendant in district court. If the defendant brings a third-
party action against another person for contribution and indemnity, the third-party action is not "appertaining to a guardianship estate" under the Section 607 definition because it is not "against or on behalf of" the guardianship estate. The change to Section 608 makes it clear that the probate court nevertheless can transfer the whole case — including the non-appertaining third-party action — because the guardian is a "party" to the cause of action.

HB 2580 provides that it takes effect September 1, 1999, "and applies only to a motion to transfer a cause of action filed on or after that date. A motion to transfer a cause of action filed before the effective date of this Act is governed by the law in effect on the date the motion was filed, and the former law is continued in effect for that purpose."

Sec. 625. Case Files [ ].

The county clerk shall maintain a case file for each person's filed guardianship proceedings. The case file must contain [ ] all orders [ ], judgments, [] and proceedings of the court and any other guardianship filing with the court, including [ ] all:

(1) applications for the granting of guardianship;

(2) citations and notices, whether published or posted, with the returns on the citations and notices;

(3) bonds and official oaths;

(4) inventories, appraisements, and lists of claims;

(5) exhibits and accounts;

(6) reports of hiring, renting, or sale;

(7) applications for sale or partition of real estate and reports of sale and of commissioners of partition;

(8) applications for authority to execute leases for mineral development, or for pooling or unitization of lands, royalty, or other interest in minerals, or to lend or invest money;

(9) reports of lending or investing money; and

(10) reports of guardians of the persons.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1142), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 1142 makes changes to how the clerk keeps probate records and is a recognition of the changing world in which we live. Rather than keeping a "guardianship minutes" book and a "claims docket,' HB 1142 permits the clerk to keep probate information electronically. Also, every guardianship filing is to be kept in a case file, rather than selective information being recorded in the "guardianship minutes" (see Section 625 as amended). Does "guardianship filing" include claims? If so, HB 1142 appears to permit clerks to abandon the bifurcated claims docket/probate docket system and keep everything in the case file with one electronic index.

HB 1142 amends Section 15, 17 and 18 and adds new Section 17A. It makes corresponding changes to Sections 625, 627 and 628 and adds new Section 627A regarding guardianships. It takes effect September 1, 1999.

Sec. 627. Maintaining Records in Lieu of Record Books.

In lieu of keeping the record books described by Sections 623, 624, and 626 of this code, the county clerk may maintain the information relating to a person's guardianship proceeding maintained in those record books on a computer file, on microfilm, in the form of a digitized optical image, or in another similar form of data compilation.

Sec. 627A. Index.

The county clerk shall properly index the records [ ] and keep the index [] open for public inspection but may not release the index [] from the clerk's custody.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1142), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See explanation following Section 625.

Sec. 628. Use of Records as Evidence.

The record books or individual case files, including records on a computer file, on microfilm, in the form of a digitized optical image, or in another similar form of data compilation described in other sections of this chapter, or certified copies or reproductions of the records, shall be [ ] evidence in any court of this state.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1142), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See explanation following Section 625.

Sec. 633. Notice and Citation.

(a) On the filing of an application for guardianship, notice shall be issued and served as provided by this section.

(b) The court clerk shall issue a citation stating that the application for guardianship was filed, the name of the proposed ward, [] the name of the applicant, and the name of the person to be appointed guardian as provided in the application, if that person is not the applicant. The citation must cite all persons interested in the welfare of the proposed ward to appear at the time and place stated in the notice if they wish to contest the application. The citation shall be posted.

(c) The sheriff or other officer shall personally serve citation to appear and answer the application for guardianship on:

(1) a proposed ward who is 12 years of age or older;

(2) the parents of a proposed ward if the whereabouts of the parents are known or can be reasonably ascertained;

(3) any court-appointed conservator or person having control of the care and welfare of the proposed ward;

(4) a proposed ward's spouse; []

(5) an attorney ad litem or guardian ad litem appointed to represent the interests of a missing person; and

(6) the person named in the application to be appointed guardian, if that person is not the applicant.

(d) The court clerk, at the applicant's request, or the applicant shall mail a copy of the notice by registered or certified mail, return receipt requested, to the following persons if their whereabouts are known or can be reasonably ascertained:

(1) all adult siblings and all adult children of a proposed ward;

(2) the administrator of a nursing home facility or similar facility in which the proposed ward resides;

(3) the operator of a residential facility in which the proposed ward resides;

(4) a person whom the applicant knows to hold a power of attorney signed by the proposed ward;

(5) a person designated to serve as guardian of the proposed ward by a written declaration under Section 679 of this code, if the applicant knows of the existence of the declaration;

(6) a person designated to serve as guardian of the proposed ward in the probated will of the last surviving parent of the ward; and

(7) a person designated to serve as guardian of the proposed ward by a written declaration of the proposed ward's last surviving parent, if the declarant is deceased and the applicant knows of the existence of the declaration.

(e) A person other than the proposed ward who is entitled to receive notice or personal service of citation under Subsections (c) and (d) of this section may choose, in person or by attorney ad litem, by writing filed with the clerk, to waive the receipt of notice or the issuance and personal service of citation.

(f) The court may not act on an application for the creation of a guardianship until the Monday following the expiration of the 10-day period beginning the date service of notice and citation has been made as provided by Subsections (b), (c), and (d)(1) of this section. The validity of a guardianship created under this chapter is not affected by the failure of the clerk or applicant to comply with the requirements of Subsections (d)(2)-(7) of this section.

(g) It is not necessary for a person who files an application for the creation of a guardianship under this chapter to be served with citation or waive the issuance and personal service of citation under this section.

Added by Acts 1995, 74th Leg., ch. 1039, Sec. 18, eff. Sept. 1, 1995. Subsecs. (d), (f) amended by Acts 1997, 75th Leg., ch. 77, Sec. 2, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ____ (HB 2795), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

Typically the applicant for a guardianship seeks to have himself or herself named as guardian, but occasionally the applicant seeks the appointment of someone else. Apparently, the applicant does not always tell the intended guardian that he, she or it has been named. HB 2795 addresses this potential problem by requiring the person named as prospective guardian in a guardianship application to be served with citation.

HB 2795 takes effect September 1, 1999, and applies to a proceeding for the appointment of a guardian instituted on or after that date.

Sec. 642. Standing to Commence or Contest Proceeding.

(a) Except as provided by Subsection (b) of this section, any person has the right to commence any guardianship proceeding, including a proceeding for complete restoration of a ward's capacity or modification of a ward's guardianship, or to appear and contest any guardianship proceeding or the appointment of a particular person as guardian.

(b) A person who has an interest that is adverse to a proposed ward or incapacitated person may not:

(1) file an application to create a guardianship for the proposed ward or incapacitated person;

(2) contest the creation of a guardianship for the proposed ward or incapacitated person; []

(3) contest the appointment of a person as a guardian of the person or estate, or both, of the proposed ward or incapacitated person; or

(4) contest an application for complete restoration of a ward's capacity or modification of a ward's guardianship.

(c) The court shall determine by motion in limine the standing of a person who has an interest that is adverse to a proposed ward or incapacitated person.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Subsec. (c) added by Acts 1995, 74th Leg., ch. 1039, Sec. 20, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ___ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

Prior to 1999, the Probate Code provided for the possibility of the restoration of the ward's capacity, but it offered few answers regarding important procedural points, such as who had the burden of proof, what was the standard of proof, etc. HB 1663 was enacted to fill in these procedural gaps.

Unfortunately (at least in my opinion), the drafters of HB 1663 got carried away and made this amendment to Section 642. This section was intended to prohibit persons with conflicting claims against a prospective ward or his or her estate from participating in a hearing to appoint a guardian for the prospective ward. By including restoration proceedings in this standing statute, the Legislature runs the risk of having the one person who knows the most about a ward and whether or not his or her capacity should be restored — the guardian — kicked out of the restoration proceeding. Judge Guy Herman, Probate Court No. 1 of Travis County, who was an advocate of this bill, assured me that this result was not intended — that the guardian is not to be denied the right to participate in a restoration proceeding simply because, as guardian, he or she is in several inherent conflict of interest positions with respect to the ward. I testified in the Senate Jurisprudence Committee on this bill, and the Senators indicated that it was not the Legislature's intent to deny the guardian standing to participate in a restoration proceeding simply because of his or her status as guardian. Still, no doubt every guardian in a well-
litigated case will have to withstand a standing challenge thanks to this amendment.

This change applies to an application for restoration filed on or after September 1, 1999, and even to applications pending on September 1, 1999, if the application is amended to conform to the requirements of HB 1663.

Sec. 646. Appointment of Attorney Ad Litem and Interpreter.

(a) In a proceeding under this chapter for the appointment of a guardian [ ], the court shall appoint an attorney ad litem to represent the interests of the proposed ward. The attorney shall be supplied with copies of all of the current records in the case and may have access to all of the proposed ward's relevant medical, psychological, and intellectual testing records.

(b) To be eligible for appointment as an attorney ad litem, a person must have the certification required by Section 647A of this code [ ].

(c) [

[ ] A person whose certificate has expired must obtain a new certificate to be eligible for appointment as an attorney ad litem.

(d) [] At the time of the appointment of the attorney ad litem, the court shall also appoint a language interpreter or a sign interpreter if necessary to ensure effective communication between the proposed ward and the attorney.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Subsecs. (b) to (d) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 22, eff. Sept. 1, 1995; Subsec. (e) repealed by Acts 1995, 74th Leg., ch. 1039, Sec. 74, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ___ (HB 919, eff. Sept. 1, 1999.

Explanation of 1999 Amendment

Since 1995 attorneys wishing to serve as attorneys ad litem in proceedings for the appointment of a guardian had to to complete a four-hour certification course of study in guardianship law. After completing the course, an attorney was certified for a two-year period, at which time the course had to be repeated to maintain certification.

HB 919 amends Section 646 and adds Section 647A, changing the rules regarding attorney certification in these respects:

1.	Now an attorney seeking appointment by the court in any capacity in any guardianship proceeding must be certified, not just attorneys ad litem in proceedings for the appointment of a guardian. (Section 647A(a)).

2.	The certification course drops from four hours to three hours. (Section 647A(3)).

3.	If an attorney has been certified for each of the four preceding years, his or her renewal certificate is good for four years, not just two years. (Section 647A(e)). For everyone else, a certificate remains good for two years.

The new requirements take effect on September 1, 1999.

Sec. 647. Duties of Attorney Ad Litem.

(a) An attorney ad litem appointed under Section 646 of this code to represent a proposed ward shall, within a reasonable time before the hearing, interview the proposed ward. To the greatest extent possible, the attorney shall discuss with the proposed ward the law and facts of the case, the proposed ward's legal options regarding disposition of the case, and the grounds on which guardianship is sought.

(b) Before the hearing, the attorney shall review the application for guardianship, certificates of current physical, medical, and intellectual examinations, and all of the proposed ward's relevant medical, psychological, and intellectual testing records.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993.

Sec. 647A. Certification Requirement For Certain Court-appointed Attorneys.

(a) A court-appointed attorney in any guardianship proceeding must be certified by the State Bar of Texas or a person or other entity designated by the state bar as having successfully completed a course of study in guardianship law and procedure sponsored by the state bar or its designee.

(b) For certification under this section, the state bar shall require three hours of credit.

(c) Except as provided by Subsection (e) of this section, a certificate issued under this section expires on the second anniversary of the date the certificate is issued.

(d) To be eligible to be appointed by a court to represent a person at a guardianship proceeding, an attorney whose certificate has expired must obtain a new certificate.

(e) A new certificate obtained by a person who previously has been issued a certificate under this section expires on the fourth anniversary of the date the new certificate is issued if the person has been certified each of the four years immediately preceding the date the new certificate is issued.

Added by Acts 1999, 76th Leg., ch. ___ (HB 919, eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 646.

Sec. 648A. Duties of Court Investigator.

(a) On the filing of an application for guardianship under Section 682 of this code, a court investigator shall investigate the circumstances alleged in the application to determine whether a less restrictive alternative than guardianship is appropriate.

(b) A court investigator shall:

(1) supervise the court visitor program established under Section 648 of this code and in that capacity serve as the chief court visitor;

(2) investigate a complaint received from any person about a guardianship and report to the judge, if necessary; and

(3) perform other duties as assigned by the judge or required by this code.

(c) After making an investigation under Subsection (a) or (b) of this section, a court investigator shall file with the court a report of the court investigator's findings and conclusions. Disclosure to a jury of the contents of a court investigator's report is subject to the Texas Rules of Civil Evidence. In a contested case, the court investigator shall provide copies of the report to the attorneys for the parties before the earlier of:

(1) the seventh day after the day the report is completed; or

(2) the 10th day before the day the trial is scheduled to begin.

(d) Nothing in this section supersedes any duty or obligation of another to report or investigate abuse or neglect under any statute of this state.

Added by Acts 1995, 74th Leg., ch. 1039, Sec. 24, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 1663, which established new procedures for restoration of a ward's capacity, also stuck this expansion of the court investigator's powers into the statute.

Sec. 665. Compensation of Guardians and Temporary Guardians.

(a) The court may authorize compensation for a guardian or a temporary guardian serving as a guardian of the person alone from available funds of the ward's estate. The court shall set the compensation in an amount not exceeding five percent of the ward's gross income. In determining whether to authorize compensation for a guardian under this section, the court shall consider the ward's monthly income from all sources and whether the ward receives medical assistance under the state Medicaid program.

(b) The guardian or temporary guardian of an estate is entitled to a fee of five percent of the gross income of the ward's estate and five percent of all money paid out of the estate on a court finding that the guardian or temporary guardian has taken care of and managed the estate in compliance with the standards of this chapter. In this section, the term "money paid out" does not include any money loaned, invested, or paid over on the settlement of the guardianship or a tax-motivated gift made by the ward. If the fee is an unreasonably low amount, the court may authorize reasonable compensation to a guardian or temporary guardian for services as guardian or temporary guardian

of the estate. The court, on application of an interested person or on its own motion, may deny a fee authorized under this section in whole, or in part, if:

(1) the court finds that the guardian or temporary guardian has not adequately performed the duties required of a guardian or temporary guardian under this chapter; or

(2) the guardian or temporary guardian has been removed for cause.

(c) Except as provided by Subsection (b) of this section for a fee that is determined by the court to be unreasonably low, the aggregate fee of the guardian of the person and guardian of the estate may not exceed an amount equal to five percent of the gross income of the ward's estate plus five percent of all money paid out of the estate.

(d) If the estate of a ward is insufficient to pay for the services of a private professional guardian or a licensed attorney serving as guardian of the ward's person, the court may authorize compensation for that guardian if funds in the county treasury are budgeted for that purpose.

(e) In this section "gross income" does not include Department of Veterans Affairs or Social Security benefits received by a ward.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 1039, Sec. 27, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ___ (HB 2165), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 2165 amended Sections 665 and 665B regarding payment of guardians and the attorneys for applicants for guardianship from the county treasury if the ward's estate is insufficient for this purpose. Note that the change to Section 665B clarifies that even unsuccessful applicants can have their attorneys fees reimbursed. The changes apply to court-authorized guardianship compensation on or after September 1, 1999.

Sec. 665B. Compensation of Certain Attorneys.

(a) A court that creates a guardianship for a ward under this chapter, on request of a person who filed an application to be appointed guardian of the proposed ward, may authorize compensation of an attorney who represents the person at the application hearing, regardless of whether the person is appointed the ward's guardian, from:

(1) available funds of the ward's estate; or

(2) the county treasury if:

(A) the ward's estate is insufficient to pay for the services provided by the attorney; and

(B) funds in the county treasury are budgeted for that purpose [ ].

(b) The court may not authorize compensation under this section unless the court finds that the applicant acted in good faith and for just cause in the filing and prosecution of the application.

Added by Acts 1995, 74th Leg., ch. 1039, Sec. 28, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ___ (HB 2165), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 665.

Sec. 677A. Written Declarations by Certain Parents to Appoint Guardians for Their Children.

(a) A written declaration appointing an eligible person to be guardian of the person of the parent's child under Section 677(b) of this code must be attested to by at least two credible witnesses 14 years of age or older who are not named as guardian or alternate guardian in the declaration.

(b) The declaration must have attached a self-proving affidavit signed by the declarant and the witnesses attesting to the competence of the declarant and the execution of the declaration. A properly executed and witnessed declaration and affidavit are prima facie evidence that the declarant was competent at the time the declarant executed the declaration and that the guardian named in the declaration would serve the best interests of the ward.

(c) The declaration and affidavit may be filed with the court at any time after the application for appointment of a guardian is filed and before a guardian is appointed. If the designated guardian does not qualify, is dead, refuses to serve, resigns, or dies after being appointed guardian, or is otherwise unavailable to serve as guardian, the court shall appoint the next eligible designated alternate guardian named in the declaration. If the guardian and all alternate guardians do not qualify, are dead, refuse to serve, or later die or resign, the court shall appoint another person to

serve as otherwise provided by this code.

(d) The declarant may revoke a declaration in any manner provided for the revocation of a will under Section 63 of this code, including the subsequent reexecution of the declaration in the manner required for the original declaration.

(e) A declaration and affidavit may be in any form adequate to clearly indicate the declarant's intention to designate a guardian for the declarant's child. The following form may, but need not, be used:

DECLARATION OF APPOINTMENT OF GUARDIAN FOR

MY CHILDREN IN THE EVENT OF MY DEATH

I, __________, make this Declaration to appoint as guardian for my child or children, listed as follows, in the event of my death:

________________________________ ________________________________

________________________________ ________________________________

________________________________ ________________________________

(add blanks as appropriate)

I designate __________ to serve as guardian of the person of my (child or children), __________ as first alternate guardian of the person of my (child or children), __________ as second alternate guardian of the person of my (child or children), and __________ as third alternate guardian of the person of my (child or children).

I direct that the guardian of the person of my (child or children) serve (with or without) bond.

(If applicable) I designate __________ to serve as guardian of the estate of my (child or children), __________ as first alternate guardian of the estate of my (child or children), __________ as second alternate guardian of the estate of my (child or children), and __________ as third alternate guardian of the estate of my (child or children).

If any guardian or alternate guardian dies, does not qualify, or resigns, the next named alternate guardian becomes guardian of my (child or children).

Signed this __________ day of __________, 19___.

________________________________

Declarant

________________________________ ________________________________

Witness	Witness

SELF-PROVING AFFIDAVIT

Before me, the undersigned authority, on this date personally appeared the declarant, and ____________ and ____________ as witnesses, and all being duly sworn, the declarant said that the above instrument was his or her Declaration of Appointment of Guardian for the Declarant's Children in the Event of Declarant's Death and that the declarant had made and executed it for the purposes expressed in the declaration. The witnesses declared to me that they are each 14 years of age or older, that they saw the declarant sign the declaration, that they signed the declaration as witnesses, and that the declarant appeared to them to be of sound mind.

______________________________

Declarant

________________________________ ________________________________

Affiant	Affiant

Subscribed and sworn to before me by the above named declarant and affiants on this ____ day of __________, 19___.

___________________________________________

Notary Public in and for the State of Texas

My Commission expires: ___________________________________________

Added by Acts 1995, 74th Leg., ch. 304, Sec. 3, eff. Sept. 1, 1995. Subsec. (a) amended by Acts 1997, 75th Leg., ch. 77, Sec. 4, eff. Sept 1, 1997. Amended by Acts 1999, 76th Leg., ch. ___ (HB 3338), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 3338 changes the form parents can use to designate a guardian of a person for their minor children to include an express statement about whether or not the parents wish for bond to be waived. It also amends Section 702 to make clear that a court may waive the bond if the surviving parent so directs in his or her will or in a Section 677A designation of guardian. The waiver of bond applies to guardians of the persons only, not to guardians of the estate.

The changes made by HB 3338 take effect September 1, 1999, and apply to designations of guardian executed on or after that date.

Sec. 682. Application; Contents.

Any person may commence a proceeding for the appointment of a guardian by filing a written application in a court having jurisdiction and venue. The application must be sworn to by the applicant and state:

(1) the name, sex, date of birth, and address of the proposed ward;

(2) the name, relationship, and address of the person the applicant desires to have appointed as guardian;

(3) whether guardianship of the person or estate, or both, is sought;

(4) the nature and degree of the alleged incapacity, the specific areas of protection and assistance requested, and the limitation of rights requested to be included in the court's order of appointment;

(5) the facts requiring that a guardian be appointed and the interest of the applicant in the appointment;

(6) the nature and description of any guardianship of any kind existing for the proposed ward in [ ] any other state;

(7) the name and address of any person or institution having the care and custody of the proposed ward;

(8) the approximate value and description of the proposed ward's property, including any compensation, pension, insurance, or allowance to which the proposed ward may be entitled;

(9) [

[] the name and address of any person whom the applicant knows to hold a power of attorney signed by the proposed ward and a description of the type of power of attorney;

(10) [] if the proposed ward is a minor, the names of the parents and next of kin of the proposed ward and whether either or both of the parents are deceased;

(11) [] if the proposed ward is a minor, whether the minor was the subject of a legal or conservatorship proceeding within the preceding two-year period and, if so, the court involved, the nature of the proceeding, and the final disposition, if any, of the proceeding;

(12) [] if the proposed ward is 60 years of age or older, the names and addresses, to the best of the applicant's knowledge, of the proposed ward's spouse, siblings, and children, or, if there is no spouse, sibling, or child, the names and addresses of the proposed ward's next of kin;

(13) [] facts showing that the court has venue over the proceeding; and

(14) [] if applicable, that the person whom the applicant desires to have appointed as a guardian is a private professional guardian who has complied with the requirements of Section 697 of this code.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 77, Sec. 5, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1376, Sec. 2, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 1663, which established new procedures for restoration of a ward's capacity, also made these changes to the application requirements for a guardianship. Apparently it is assumed that no one will file an application for a guardianship who already is the ward of another court in the state because the requirement of pleading the nature and extent of any guardianship pending in "this state" was deleted. The bill also deletes the pleading requirement for the requested term of the guardianship. Presumably the court will determine the term based on the facts and does not need the applicant's requested term.

This new application requirement applies to applications for guardians filed on or after September 1, 1999. It also permits, but does not require, applicants to modify applications pending on September 1, 1999, to comply with the new requirements.

Sec. 682A. Application for Appointment of Guardian for Certain Persons.

(a) If a minor is a person who, because of incapacity, will require a guardianship after the ward is no longer a minor, a person may file an application under Section 682 of this code for the appointment of a guardian of the person and/or the estate of the proposed ward not earlier than the 60th day before the proposed ward's 18th birthday.

(b) Notwithstanding Section 694(b) of this code, the guardianship of the person of a minor who is the subject of an application for the appointment of a guardian of the person filed under Subsection (a) of this section is settled and closed when:

(1) the court, after a hearing on the application, determines that the appointment of a guardian of the person for the proposed ward is not necessary; or

(2) the guardian appointed by the court after a hearing on the application has qualified under Section 699 of this code.

Added by Acts 1999, 76th Leg., ch. ___ (HB 2164), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

New Section 682A permits parents and/or other interested persons to jump the gun on an incapacitated person who is about to turn age 18 by filing the application for guardianship prior to his or her 18th birthday.

This change takes effect September 1, 1999, and applies to applications for guardianship filed on or after that date.

Sec. 683. Court's Initiation of Guardianship Proceedings.

(a) If a court has probable cause to believe that a person domiciled or found in the county in which the court is located is an incapacitated person, and the person does not have a guardian in this state, the court shall appoint a guardian ad litem or court investigator to investigate and file an application for the appointment of a guardian of the person or estate, or both, of the person believed to be incapacitated.

(b) To establish probable cause under this section, the court may require:

(1) an information letter about the person believed to be incapacitated that is submitted by an interested person and satisfies the requirements of Section 683A of this code; or

(2) a written letter or certificate from a physician who has examined the person believed to be incapacitated that satisfies the requirements of Section 687(a) of this code, except that the letter must be dated not earlier than the 120th day before the date of the filing of an application under Subsection (a) of this section and be based on an examination the physician performed not earlier than the 120th day before that date.

(c) A court that creates a guardianship for a ward under this chapter may authorize compensation of a guardian ad litem who files an application under Subsection (a) of this section from available funds of the ward's estate. If after examining the ward's assets the court determines the ward is unable to pay for services provided by the guardian ad litem, the court may authorize compensation from the county treasury.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 2165), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

Prior to its amendment, Section 683 authorized the court to initiate a guardianship proceeding without the filing of an application by a family member or other interested party. HB 2165, backed by the Guardianship Advisory Board, was intended to address a problem the Board encountered in meeting with judges and others interested in guardianships around the state — what should a judge do if he or she is notified that someone needs a guardian without any supporting documentation. As amended, Section 683 still permits the court to determine it has probable cause to investigate even without the information described in subsection (b), but now the court can require this additional information, including an "information letter" under new Section 683A, prior to committing a court investigator or guardian ad litem to investigate the need for a guardianship. This gives the judge a way to avoid invading someone's privacy merely because a nosy neighbor does not like someone's lifestyle.

Sec. 683A. Information Letter.

An information letter under Section 683(b)(1) of this code about a person believed to be incapacitated may:

(1) include the name, address, telephone number, county of residence, and date of birth of the person;

(2) state whether the residence of the person is a private residence, health care facility, or other type of residence;

(3) describe the relationship between the interested person and the person;

(4) contain the names and telephone numbers of any known friends and relatives of the person;

(5) state whether a guardian of the person or estate of the person has been appointed in this state;

(6) state whether the person has executed a power of attorney and, if so, the designee's name, address, and telephone number;

(7) describe any property of the person, including the estimated value of that property;

(8) list any amount and source of monthly income of the person; and

(9) describe the nature and degree of the person's alleged incapacity and include a statement of whether the person is in imminent danger of serious impairment to the person's physical health, safety, or estate.

Added by Acts 1999, 76th Leg., ch. ___ (HB 2165), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 683.

Sec. 694A. Complete Restoration of Ward's Capacity or Modification of Guardianship [].

(a) A ward or any person interested in the ward's welfare may file a written application with [] the court for an order:

(1) finding that the ward is no longer an incapacitated person [ ] and ordering the settlement and closing of the guardianship;

(2) finding that the ward lacks the capacity to do some or all of the tasks necessary to provide food, clothing, or shelter [] for himself or herself, to care for the ward's own physical health, or to manage the ward's own financial affairs [] and granting additional powers or duties to the guardian [ ]; or

(3) finding that the ward has [] the capacity to do some, but not all, of the tasks necessary to provide food, clothing, or shelter [] for himself or herself, to care for the ward's own physical health, or to manage the ward's own financial affairs [] and:

(A) limiting the powers or duties of the guardian [ ]; and

(B) permitting the ward to care for himself or herself or to manage the ward's own financial affairs [] commensurate with the ward's ability.

(b) A ward may make a [] request for an order under this section [ ] by informal letter to the court. A person who knowingly interferes with the transmission of the request to the court may be adjudged guilty of contempt of court.

(c) On receipt of an informal letter under Subsection (b) of this section, the court shall appoint the court investigator or a guardian ad litem to file an application under Subsection (a) of this section on the ward's behalf. A guardian ad litem appointed under this subsection may also be appointed by the court to serve as attorney ad litem under Section 694C of this code.

(d) When an application is filed under this section, citation shall be served on the ward's guardian and on the ward if the ward is not the applicant.

(e) Except as otherwise provided by the court, on good cause shown by the applicant, a person may not reapply for complete restoration of a ward's capacity or modification of a ward's guardianship before the first anniversary of the date of the hearing on the last preceding application.

Added by Acts 1995, 74th Leg., ch. 1039, Sec. 41, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The Legislature added Section 694A in 1995 to address the issue of restoration of a ward's capacity. Since that time, courts and litigants addressing this issue have found the statutes to be deficient in addressing the many procedural issues which arise in restoration proceedings.

HB 1663 addresses these issues. It amends Section 694A and adds Sections 694B-K, setting for the pleading requirements, procedure for appointment of ad litems, burden of proof, standard of proof and various other issues.

These new rules apply to applications for restoration filed on or after September 1, 1999. It also permits, but does not require, applicants to modify applications pending on September 1, 1999, to conform with the new requirements, so long as a final determination has not been made on the application.

Sec. 694B. Contents of Application.

An application filed under Section 694A of this code must be sworn to by the applicant and must:

(1) contain the name, sex, date of birth, and address of the ward;

(2) contain the name and address of any person serving as guardian of the person of the ward on the date the application is filed;

(3) contain the name and address of any person serving as guardian of the estate of the ward on the date the application is filed;

(4) state the nature and description of the ward's guardianship;

(5) state the specific areas of protection and assistance and any limitation of rights that exist;

(6) state whether the relief being sought is:

(A) a restoration of the ward's capacity because the ward is no longer an incapacitated person;

(B) the granting of additional powers or duties to the guardian; or

(C) the limitation of powers granted to or duties performed by the guardian;

(7) if the relief being sought under the application is described by Subdivision (6)(B) or (C) of this section, state:

(A) the nature and degree of the ward's incapacity;

(B) the specific areas of protection and assistance to be provided to the ward and requested to be included in the court's order; and

(C) any limitation of the ward's rights requested to be included in the court's order;

(8) state the approximate value and description of the ward's property, including any compensation, pension, insurance, or allowance to which the ward is or may be entitled; and

(9) if the ward is 60 years of age or older, contain the names and addresses, to the best of the applicant's knowledge, of the ward's spouse, siblings, and children or, if there is no known spouse, sibling, or child, the names and addresses of the ward's next of kin.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694C. Appointment of Attorney Ad Litem.

(a) The court shall appoint an attorney ad litem to represent a ward in a proceeding for the complete restoration of the ward's capacity or for the modification of the ward's guardianship.

(b) Unless otherwise provided by the court, an attorney ad litem appointed under this section shall represent the ward only for purposes of the restoration or modification proceeding.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694D. Hearing.

(a) At a hearing on an application for complete restoration of a ward's capacity or modification of a ward's guardianship, the court shall consider only evidence regarding the ward's mental or physical capacity at the time of the hearing that is relevant to the restoration of capacity or modification of the guardianship, as appropriate.

(b) The party who filed the application has the burden of proof at the hearing.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694E. Findings Required.

(a) Before ordering the settlement and closing of the guardianship under an application filed under Section 694A of this code, the court must find by a preponderance of the evidence that the ward is no longer partially or fully incapacitated.

(b) Before granting additional powers to the guardian or requiring the guardian to perform additional duties under an application filed under Section 694A of this code, the court must find by a preponderance of the evidence that the current nature and degree of the ward's incapacity warrants a modification of the guardianship and that some or all of the ward's rights need to be further restricted.

(c) Before limiting the powers granted to or duties required to be performed by the guardian under an application filed under Section 694A of this code, the court must find by a preponderance of the evidence that the current nature and degree of the ward's incapacity warrants a modification of the guardianship and that some of the ward's rights need to be restored.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694F. Examinations and Reports Relating to Complete Restoration of Ward's Capacity or Modification of Guardianship.

(a) The court may not grant an order completely restoring a ward's capacity or modifying a ward's guardianship under an application filed under Section 694A of this code unless, in addition to other requirements prescribed by this code, the applicant presents to the court a written letter or certificate from a physician licensed in this state that is dated not earlier than the 120th day before the date of the filing of the application or dated after the date on which the application was filed but before the date of the hearing. The letter or certificate must:

(1) describe the nature and degree of incapacity, including the medical history if reasonably available, or state that, in the physician's opinion, the ward has the capacity to provide food, clothing, and shelter for himself or herself, to care for the ward's own physical health, and to manage the financial affairs of the ward;

(2) provide a medical prognosis specifying the estimated severity of any incapacity;

(3) state how or in what manner the ward's ability to make or communicate responsible decisions concerning himself or herself is affected by the person's physical or mental health;

(4) state whether any current medication affects the demeanor of the ward or the ward's ability to participate fully in a court proceeding;

(5) describe the precise physical and mental conditions underlying a diagnosis of senility, if applicable; and

(6) include any other information required by the court.

(b) If the court determines it is necessary, the court may appoint the necessary physicians to examine the ward in the same manner and to the same extent as a ward is examined by a physician under Section 687 of this code.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694G. Order of Complete Restoration of Ward's Capacity.

If the court finds that a ward is no longer an incapacitated person, the order completely restoring the ward's capacity must contain findings of fact and specify:

(1) the information required by Section 694J of this code;

(2) that the ward is no longer an incapacitated person;

(3) that there is no further need for a guardianship of the person or estate of the ward;

(4) that the guardian is required to:

(A) immediately settle and close the guardianship in accordance with Section 745 of this code; and

(B) deliver all of the remaining guardianship estate to the ward; and

(5) that the clerk shall revoke letters of guardianship when the guardianship is finally settled and closed.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694H. Modification of Guardianship.

If the court finds that a guardian's powers or duties should be expanded or limited, the order modifying the guardianship must contain findings of fact and specify:

(1) the information required by Section 694J of this code;

(2) the specific powers, limitations, or duties of the guardian with respect to the care of the ward or the management of the property of the ward, as appropriate;

(3) the specific areas of protection and assistance to be provided to the ward;

(4) any limitation of the ward's rights; and

(5) that the clerk shall modify the letters of guardianship to the extent applicable to conform to the order.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694I. Dismissal of Application.

If the court finds that a modification of the ward's guardianship is not necessary, including that the ward's capacity has not been restored, the court shall dismiss the application and enter an order that contains findings of fact and specifies:

(1) the information required by Section 694J of this code; and

(2) that the powers, limitations, or duties of the guardian with respect to the care of the ward or the management of the ward's property will remain unchanged.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694J. Contents of Order.

(a) A court order entered with respect to a request made under Section 694A of this code to completely restore a ward's capacity or modify a ward's guardianship must:

(1) contain the name of the guardian;

(2) contain the name of the ward; and

(3) state whether the type of guardianship being addressed at the proceeding is a:

(A) guardianship of the person;

(B) guardianship of the estate; or

(C) guardianship of both the person and the estate.

(b) In an order described by this section, the court may not grant a power to a guardian or require the guardian to perform a duty that is a power granted to or a duty required to be performed by another guardian.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 694K. Attorney Retained on Ward's Behalf.

(a) A ward may retain an attorney for a proceeding involving the complete restoration of the ward's capacity or modification of the ward's guardianship.

(b) The court may order that compensation for services provided by an attorney retained under this section be paid from funds in the ward's estate only if the court finds that the attorney had a good-faith belief that the ward had the capacity necessary to retain the attorney's services.

Added by Acts 1999, 76th Leg., ch. ____ (HB 1663), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 694A.

Sec. 695A. Successor Guardians for Wards of Guardianship Programs or Governmental Entities.

(a) If a guardianship program or governmental entity serving as a guardian for a ward under this chapter becomes aware of a family member or friend of the ward or any other interested person who is willing and able to serve as the ward's successor guardian, the program or entity shall notify the court in which the guardianship is pending of the individual's willingness and ability.

(b) When the court is notified of the existence of a proposed successor guardian under Subsection (a) of this section or the court otherwise becomes aware of a family member, friend, or any other interested person who is willing and able to serve as a successor guardian for a ward of a guardianship program or governmental entity, the court shall determine whether the proposed successor guardian is qualified to serve under this chapter as the ward's successor guardian.

(c) If the court finds under Subsection (b) of this section that the proposed successor guardian for a ward is not disqualified from being appointed as the ward's successor guardian under Section 681 of this code and that the appointment is in the ward's best interests, the guardianship program or governmental entity serving as the ward's guardian or the court, on the court's own motion, may file an application to appoint the individual as the ward's successor guardian. Service of notice on an application filed under this subsection shall be made as directed by the court.

Added by Acts 1999, 76th Leg., ch. ___ (HB 2166), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 2166 added Section 695A, which is intended to make it easier for guardianship programs or governmental entities serving as guardians because no one else was available to be replaced by family members or others who become willing to serve as guardian.

Sec. 697. Registration of Private Professional Guardians.

(a) A private professional guardian must apply annually to the clerk of the county having venue over the proceeding for the appointment of a guardian for certification. The application must include a sworn statement containing the following information concerning a private professional guardian or each [] person who represents or plans to represent the interests of a ward as a guardian on behalf of the private professional guardian:

(1) educational background and professional experience;

(2) three or more professional references;

(3) the names of all of the wards the private professional guardian or person is or will be serving as a guardian;

(4) the aggregate fair market value of the property of all wards that is being or will be managed by the private professional guardian or person;

(5) place of residence, business address, and business telephone number; and

(6) whether the private professional guardian or person has ever been removed as a guardian by the court or resigned as a guardian in a particular case, and, if so, a description of the circumstances causing the removal or resignation, and the style of the suit, the docket number, and the court having jurisdiction over the proceeding.

(b) The application must be accompanied by a nonrefundable fee set by the clerk in an amount necessary to cover the cost of administering this section.

(c) The term of the certification begins on the date that the requirements are met and extends through December 31 of the initial year. After the initial year of certification, the term of the certification begins on January 1 and ends on December 31 of each year. A renewal application must be completed during December of the year preceding the year for which the renewal is requested.

(d) The clerk shall bring the information received under this section to the judge's attention for review. The judge shall use the information only in determining whether to appoint, remove, or continue the appointment of a private professional guardian.

(e) Not later than February 1 of each year, the clerk shall submit to the Health and Human Services Commission the names and business addresses of private professional guardians who have satisfied the certification requirements under this section during the preceding year.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 3630), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 3630 increases the scope of the clerk's responsibility to investigate the criminal history record information of private professional guardians to include each person who represents or plans to represent the interests of a ward as a guardian on behalf of a private professional guardian as well as each person employed by a private professional guardian who will have contact with a ward, exercise control over a ward or a ward's estate or perform any duties with respect to the management of a ward's estate. HB 3630 does this by amended Sections 697 and 698.

The changes made by HB 3630 apply to applications for certification applied on or after September 1, 1999.

Sec. 698. Access to Criminal History Records.

(a) The clerk of the county having venue over the proceeding for the appointment of a guardian shall obtain criminal history record information that is maintained by the Department of Public Safety or the Federal Bureau of Investigation identification division relating to:

(1) a private professional guardian;

(2) each [ ] person who represents or plans to represent the interests of a ward as a guardian on behalf of the private professional guardian; or

(3) each person employed by a private professional guardian who will:

(A) have personal contact with a ward or proposed ward;

(B) exercise control over and manage a ward's estate; or

(C) perform any duties with respect to the management of a ward's estate.

(b) The criminal history record information obtained under this section is for the exclusive use of the court and is privileged and confidential. The criminal history record information may not be released or otherwise disclosed to any person or agency except on court order or consent of the person being investigated. The clerk may destroy the criminal history information records after the records are used for the purposes authorized by this section.

(c) The court shall use the information obtained under this section only in determining whether to appoint, remove, or continue the appointment of a private professional guardian.

(d) A person commits an offense if the person releases or discloses any information received under this section without the authorization prescribed by Subsection (b) of this section. An offense under this subsection is a Class A misdemeanor.

(e) The clerk may charge a reasonable fee sufficient to recover the costs of obtaining criminal history information records authorized by Subsection (a) of this section.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. ___ (HB 3630), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 697.

Sec. 702. Bond Required of Guardian of the Person or Estate.

(a) Except as provided by Subsections (b) and (c) of this section, a guardian of the person or of the estate of a ward is required to give bond.

(b) A bond is not required to be given by a guardian that is:

(1) a corporate fiduciary, as defined by Section 601(5) of this code; or

(2) a guardianship program operated by a county.

(c) When a will that is made by a surviving parent and is probated in a court in this state or a written declaration that is made by a surviving parent directs that the guardian appointed in the will or declaration serve without bond, the court finding that the person is qualified shall issue letters of guardianship of the person to the person named to be appointed guardian in the will or declaration without requirement of bond. The court may not waive the requirement of a bond for the guardian of the estate of a ward, regardless of whether a surviving parent's will or declaration directs the court to waive the bond.

(c) When a will that is made by a surviving parent and is probated in a court in this state directs that the guardian appointed in the will serve without bond, the court finding that the person is qualified shall issue letters of guardianship of the person to the person named to be appointed guardian in the will without requirement of bond. The court may not waive the requirement of a bond for the guardian of the estate of a ward, regardless of whether a surviving parent's will directs the court to waive the bond.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Subsec. (b) amended by Acts 1995, 74th Leg., ch. 642, Sec. 13, eff. Sept. 1, 1995. Amended by Acts 1995, 74th Leg., ch. 1039, Sec. 42, eff. Sept. 1, 1995; Subsec. (b) amended by Acts 1997, 75th Leg., ch. 924, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ___ (HB 3338), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

HB 3338 changes the form parents can use to designate a guardian of a person for their minor children to include an express statement about whether or not the parents wish for bond to be waived. It also amends Section 702 to make clear that a court may waive the bond if the surviving parent so directs in his or her will or in a Section 677A designation of guardian. The waiver of bond applies to guardians of the persons only, not to guardians of the estate.

The changes made by HB 3338 take effect September 1, 1999, and apply to designations of guardian executed on or after that date.

Sec. 743. Reports of Guardians of the Person.

(a) The guardian of the person of a ward shall return to the court a sworn, written report showing each item of receipts and disbursements for the support and maintenance of the ward, the education of the ward when necessary, and support and maintenance of the ward's dependents, when authorized by order of court.

(b) The guardian of the person, whether or not there is a separate guardian of the estate, shall submit to the court an annual report by sworn affidavit that contains the following information:

(1) the guardian's current name, address, and phone number;

(2) the ward's current:

(A) name, address, and phone number; and

(B) age and date of birth;

(3) the type of home in which the ward resides, described as the ward's own; a nursing, guardian's, foster, or boarding home; a relative's home, and the ward's relationship to the relative; a hospital or medical facility; or other type of residence;

(4) the length of time the ward has resided in the present home and, if there has been a change in the ward's residence in the past year, the reason for the change;

(5) the date the guardian most recently saw the ward, and how frequently the guardian has seen the ward in the past year;

(6) a statement indicating whether or not the guardian has possession or control of the ward's estate;

(7) the following statements concerning the ward's health during the past year:

(A) whether the ward's mental health has improved, deteriorated, or remained unchanged, and a description if there has been a change; and

(B) whether the ward's physical health has improved, deteriorated, or remained unchanged, and a description if there has been a change;

(8) a statement concerning whether or not the ward has regular medical care, and the ward's treatment or evaluation by any of the following persons during the last year, including the name of that person, and the treatment involved:

(A) a physician;

(B) a psychiatrist, psychologist, or other mental health care provider;

(C) a dentist;

(D) a social or other caseworker; or

(E) another individual who provided treatment;

(9) a description of the ward's activities during the past year, including recreational, educational, social, and occupational activities, or if no activities are available or if the ward is unable or has refused to participate in them, a statement to that effect;

(10) the guardian's evaluation of the ward's living arrangements as excellent, average, or below average, including an explanation if the conditions are below average;

(11) the guardian's evaluation of whether the ward is content or unhappy with the ward's living arrangements;

(12) the guardian's evaluation of unmet needs of the ward;

(13) a statement of whether or not the guardian's power should be increased, decreased, or unaltered, including an explanation if a change is recommended;

(14) a statement that the guardian has paid the bond premium for the next reporting period; and

(15) any additional information the guardian desires to share with the court regarding the ward.

(c) If the ward is deceased, the guardian shall provide the court with the date and place of death, if known, in lieu of the information about the ward otherwise required to be provided in the annual report.

(d) Unless the judge is satisfied that the facts stated are true, he shall issue orders as are necessary for the best interests of the ward.

(e) If the judge is satisfied that the facts stated in the report are true, the court shall approve the report.

(f) The court on the court's own motion may waive the costs and fees related to the filing of a report approved under Subsection (e) of this section.

(g) Once each year for the duration of the guardianship, a guardian of the person shall file the report that contains the information required by Subsections (a) and (b) of this section. Except as provided by Subsection (h) of this section, the report must cover a 12-month reporting period that begins on the date the guardian qualifies to serve.

(h) The court may change a reporting period for purposes of this section but may not extend a reporting period so that it covers more than 12 months.

(i) Each report is due not later than the 60th day after the date on which the reporting period ends.

(j) A guardian of the person may complete and file the report required under this section without the assistance of an attorney.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Subsec. (a) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 44, eff. Sept. 1, 1995; Subsecs. (e) to (i) added by Acts 1995, 74th Leg., ch. 1039, Sec. 45, eff. Sept. 1, 1995; Subsec. (b) amended by Acts 1997, 75th Leg., ch. 1403, Sec. 3, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ___ (HB 2165), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

Even if a court normally would not permit a guardian to appear pro se, HB 2165 makes clear that guardians of the person may complete and file annual reports without the assistance of an attorney.

HB 2165 takes effect September 1, 1999, and the change to Section 743 applies to reports filed on or after that date.

Sec. 855. Investments Without Court Order.

(a) The guardian of the estate may retain, without regard to diversification of investments and without liability for any depreciation or loss resulting from the retention, any property received into a guardianship estate at its inception or added to the estate by gift, devise, or inheritance or by mutation or increase. A guardian of the estate is not relieved from the duty to take care of and manage the estate as a person of ordinary prudence, discretion, and intelligence would exercise in the management of the person's own affairs.

(b) If the guardian of the estate has on hand money that belongs to the ward that exceeds that amount of money that may be necessary for the education and maintenance of the ward, the guardian shall invest the money as follows:

(1) in bonds or other obligations of the United States;

(2) in tax-supported bonds of this state;

(3) except as limited by Subsections (c) and (d) of this section, in tax-supported bonds of a county, district, political subdivision, or incorporated city or town in this state;

(4) in shares or share accounts of a state savings [] and loan association or savings bank with its main office or a branch office in [ ] this state if the payment of the shares or share accounts is insured by the Federal Deposit [ ] Insurance Corporation;

(5) in the shares or share accounts of a federal savings and loan association or savings bank with its main office or a branch office [] in this state if the payment of the shares or share accounts is insured by the Federal Deposit [ ] Insurance Corporation;

(6) in collateral bonds of companies incorporated under the laws of this state, having a paid-in capital of $1,000,000 or more, when the bonds are a direct obligation of the company that issues the bonds and are specifically secured by first mortgage real estate notes or other securities pledged with a trustee; or

(7) in interest-bearing time deposits that may be withdrawn on or before one year after demand in a bank that does business in this state where the payment of the time deposits is insured by the Federal Deposit Insurance Corporation.

(c) The bonds of a county, district, or subdivision may be purchased only if the net funded debt of the county, district, or subdivision that issues the bonds does not exceed 10 percent of the assessed value of taxable property in the county, district, or subdivision.

(d) The bonds of a city or town may be purchased only if the net funded debt of the city or town does not exceed 10 percent of the assessed value of taxable property in the city or town less that part of the debt incurred for acquisition or improvement of revenue-producing utilities, the revenues of which are not pledged to support other obligations of the city or town.

(e) The limitations in Subsections (c) and (d) of this section do not apply to bonds issued for road purposes in this state under Section 52, Article III, of the Texas Constitution that are supported by a tax unlimited as to rate or amount.

(f) In this section, "net funded debt" means the total funded debt less sinking funds on hand.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. _____ [HB 2066], eff. Sept. 1, 1999.

Explanation of 1999 Amendment

The Interstate Banking Act, HB 2066, amended subsections (b) to be consistent with the state's restructured banking laws.

Sec. 868. Terms of Management Trust.

(a) Except as provided by Subsection (d) of this section, a trust created under Section 867 of this code must provide that:

(1) the ward is the sole beneficiary of the trust;

(2) the trustee may disburse an amount of the trust's principal or income as the trustee determines is necessary to expend for the health, education, support, or maintenance of the ward;

(3) the income of the trust that the trustee does not disburse under Subdivision (2) of this subsection must be added to the principal of the trust;

(4) the trustee serves without giving a bond; and

(5) the trustee, on annual application to the court and subject to the court's approval, is entitled to receive reasonable compensation for services that the trustee provided to the ward as the ward's trustee that is:

(A) to be paid from the trust's income, principal, or both; and

(B) determined in the same manner as compensation of a guardian of an estate under Section 665 of this code.

(b) The trust may provide that a trustee make a distribution, payment, use, or application of trust funds for the health, education, support, or maintenance of the ward or of another person whom the ward is legally obligated to support, as necessary and without the intervention of a guardian or other representative of the ward, to:

(1) the ward's guardian;

(2) a person who has physical custody of the ward or another person whom the ward is legally obligated to support; or

(3) a person providing a good or service to the ward or another person whom the ward is legally obligated to support.

(c) Repealed by Acts 1997, 75th Leg., ch. 1375, Sec. 6, eff. Sept. 1, 1997.

(d) When creating or modifying a trust, the court may omit or modify terms required by Subsection (a)(1) or (2) of this section only if the court determines that the omission or modification:

(1) is necessary and appropriate for the ward to be eligible to receive public benefits or assistance under a state or federal program that is not otherwise available to the ward; and

(2) is in the ward's best interests.

(e) The court may include additional provisions in a trust created or modified under this section if the court determines an addition does not conflict with Subsection (a) and, if appropriate, Subsection (d) of this section.

(f) If the trustee determines that it is in the best interest of the ward, the trustee may invest funds of the trust in the Texas tomorrow fund established by Subchapter F, Chapter 54, Education Code.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Subsec. (b) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 58, eff. Sept. 1, 1995. Subsec. (c) added by Acts 1995, 74th Leg., ch. 1039, Sec. 59, eff. Sept. 1, 1995; Subsecs. (a), (b) amended by Acts 1997, 75th Leg., ch. 1375, Sec. 2, eff. Sept. 1, 1997; Subsec. (c) repealed by Acts 1997, 75th Leg., ch. 1375, Sec. 6, eff. Sept. 1, 1997; Subsecs. (d), (e) added by Acts 1997, 75th Leg., ch. 1375, Sec. 2, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. ____ (SB 112), eff. May 17, 1999.

Explanation of 1999 Amendment

SB 112 added subsection (j), making it clear that the trustee of a guardianship management trust may invest in the Texas Tomorrow Fund college tuition payment program.

Sec. 875. Temporary Guardian--Procedure.

(a) If a court is presented with substantial evidence that a person may be a minor or other incapacitated person, and the court has probable cause to believe that the person or person's estate, or both, requires the immediate appointment of a guardian, the court shall appoint a temporary guardian with limited powers as the circumstances of the case require.

(b) A person for whom a temporary guardian has been appointed may not be presumed to be incapacitated. The person retains all rights and powers that are not specifically granted to the person's temporary guardian by court order.

(c) A sworn, written application for the appointment of a temporary guardian may be filed before the court appoints a temporary guardian. The application must be filed not later than the end of the next business day of the court after the date of appointment of the temporary guardian. The application must state:

(1) the name and address of the person who is the subject of the guardianship proceeding;

(2) the danger to the person or property alleged to be imminent;

(3) the type of appointment and the particular protection and assistance being requested;

(4) the facts and reasons supporting the allegations and requests;

(5) the name, address, and qualification of the proposed temporary guardian;

(6) the name, address, and interest of the applicant;

(7) the social security numbers of the applicant and proposed ward; and

(8) if applicable, that the proposed temporary guardian is a private professional guardian who has complied with the requirements of Section 697 of this code.

(d) At the earliest of the filing of an application for temporary guardianship or the appointment of a temporary guardian, the court shall appoint an attorney to represent the proposed ward in all guardianship proceedings in which independent counsel has not been retained by or on behalf of the proposed ward.

(e) On the filing of an application for temporary guardianship, the clerk shall issue notice that shall be served on the respondent, [] the respondent's appointed attorney, and the proposed temporary guardian named in the application, if that person is not the applicant. The notice must describe the rights of the parties and the date, time, place, purpose, and possible consequences of a hearing on the application. A copy of the application and, if applicable, a copy of the order appointing the temporary guardian must be attached to the notice.

(f)(1) A hearing shall be held not later than the 10th day after the date of the filing of the application for temporary guardianship unless the hearing date is extended as provided by Subdivision (2) of this subsection. At a hearing under this section, the respondent has the right to:

(A) receive prior notice;

(B) have representation by counsel;

(C) be present;

(D) present evidence and confront and cross-examine witnesses; and

(E) a closed hearing if requested by the respondent or the respondent's attorney.

(2) Every temporary guardianship granted before a hearing on the application required by Subdivision (1) of this subsection expires on its own terms at the conclusion of the hearing unless the respondent or the respondent's attorney consents that the order appointing the temporary guardian may be extended for a longer period not to exceed 60 days after the date of the filing of the application for temporary guardianship.

(3) Every temporary guardianship granted before a hearing on the application required by Subdivision (1) of this subsection shall be set for hearing at the earliest possible date and takes precedence over all matters except older matters of the same character.

(4) Every temporary guardianship granted before a hearing on the application required by Subdivision (1) of this subsection must include an order that sets a certain date for hearing on the application for temporary guardianship.

(5) On one day's notice to the party who obtained a temporary guardianship before a hearing on the application required by Subdivision (1) of this subsection, the respondent or the respondent's attorney may appear and move for the dissolution or modification of the temporary guardianship. If a motion is made for dissolution or modification of the temporary guardianship, the court shall hear and determine the motion as expeditiously as the ends of justice require.

(6) If the applicant is not the proposed temporary guardian, a temporary guardianship may not be granted before a hearing on the application required by Subdivision (1) of this subsection unless the proposed temporary guardian appears in court.

(g) If at the conclusion of the hearing required by Subsection (f)(1) of this section the court determines that the applicant has established that there is substantial evidence that the person is a minor or other incapacitated person, that there is imminent danger that the physical health or safety of the respondent will be seriously impaired, or that the respondent's estate will be seriously damaged or dissipated unless immediate action is taken, the court shall appoint a temporary guardian by written order. The court shall assign to the temporary guardian only those powers and duties that are necessary to protect the respondent against the imminent danger shown. The powers and duties must be described in the order of appointment.

(h) Except as provided by Subsection (k) of this section, a temporary guardianship may not remain in effect for more than 60 days.

(i) If the court appoints a temporary guardian after the hearing required by Subsection (f)(1) of this section, all court costs, including attorney's fees, may be assessed as provided in Section 665A, 665B, or 669 of this code.

(j) The court may not customarily or ordinarily appoint the Department of Protective and Regulatory Services as a temporary guardian under this section. The appointment of the department as a temporary guardian under this section should be made only as a last resort.

(k) If an application for a temporary guardianship, for the conversion of a temporary guardianship to a permanent guardianship, or for a permanent guardianship is challenged or contested, the court, on the court's own motion or on the motion of any interested party, may appoint a new temporary guardian without issuing additional citation if the court finds that the appointment is necessary to protect the proposed ward or the proposed ward's estate. A temporary guardian appointed under this subsection must qualify in the same form and manner required of a guardian under this code. The term of the temporary guardian expires at the conclusion of the hearing challenging or contesting the application or on the date a permanent guardian the court appoints for the proposed ward qualifies to serve as the ward's guardian.

Added by Acts 1993, 73rd Leg., ch. 957, Sec. 1, eff. Sept. 1, 1993. Subsecs. (c), (i) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 64, eff. Sept. 1, 1995; Subsec. (j) amended by Acts 1995, 74th Leg., ch. 76, Sec. 8.074, eff. Sept. 1, 1995; Subsecs. (j), (k) amended by Acts 1995, 74th Leg., ch. 1039, Sec. 64, eff. Sept. 1, 1995. Amended by Acts 1999, 76th Leg., ch. ____ (HB 2795), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

Typically the applicant for a temporary guardianship seeks to have himself or herself named as temporary guardian, but occasionally the applicant seeks the appointment of someone else. Apparently, the applicant does not always tell the intended guardian that he, she or it has been named. HB 2795 addresses this potential problem by requiring the person named as prospective temporary guardian in a temporary guardianship application to be served with citation. In addition, the proposed temporary guardian must appear at the hearing on the application in order to be appointed.

HB 2795 takes effect September 1, 1999, and applies to a proceeding for the appointment of a guardian instituted on or after that date.

Added by Acts 1997, 75th Leg., ch. 7, Sec. 2, eff. April 17, 1997. Repealed by Acts 1999, 76th Leg., ch. ___ (HB 3343), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

In this continuing saga of unwanted statutes trying to find a home, HB 3630 repealed the provisions of the Probate Code having to do with a receivership for prisoners of war and persons missing in action (POWs/MIAs). In 1997, these provisions were removed from the Family Code and moved to the Probate Code. Apparently the probate judges decided they didn't want them either, so now the procedure for receiverships for POWs/MIAs has been moved to Subchapter G of Chapter 64 of the Civil Practices and Remedies Code.

Added by Acts 1997, 75th Leg., ch. 7, Sec. 2, eff. April 17, 1997. Repealed by Acts 1999, 76th Leg., ch. ___ (HB 3343), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 886.

Added by Acts 1997, 75th Leg., ch. 7, Sec. 2, eff. April 17, 1997. Repealed by Acts 1999, 76th Leg., ch. ___ (HB 3343), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 886.

Added by Acts 1997, 75th Leg., ch. 7, Sec. 2, eff. April 17, 1997. Repealed by Acts 1999, 76th Leg., ch. ___ (HB 3343), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 886.

Added by Acts 1997, 75th Leg., ch. 7, Sec. 2, eff. April 17, 1997. Repealed by Acts 1999, 76th Leg., ch. ___ (HB 3343), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 886.

Added by Acts 1997, 75th Leg., ch. 7, Sec. 2, eff. April 17, 1997. Repealed by Acts 1999, 76th Leg., ch. ___ (HB 3343), eff. Sept. 1, 1999.

Explanation of 1999 Amendment

See comment following Section 886.

Added by Acts 1997, 75th Leg., ch. 7, Sec. 2, eff. April 17, 1997. Repealed by Acts 1999, 76th Leg., ch. ___ (HB 3343), eff. Sept. 1, 1999.
Explanation of 1999 Amendment

See comment following Section 886.

APPENDIX B – 1999 Changes to the Texas Trust Code

Explanation of Legislative Changes © 1999 by Glenn M. Karisch

A trustee may employ attorneys, accountants, agents, and brokers reasonably necessary in the administration of the trust estate.

Added by Acts 1983, 68th Leg., Ch. 567, Art. 2, Sec. 2, eff. Jan. 1, 1984.

HB 1475 added new Section 113.060 (see below) regarding the authority of a trustee to delegate investment decisions. This change to Section 113.018 was made to make it consistent with new Section 113.060 and to make clear that investment agents are permissible.

HB 115 is the result of a disgruntled settlor who became so fed up with having the attorney general a party to a suit to name a new charity to replace a failed one that he tried twice (once, unsuccessfully, in 1997 and again, successfully, in 1999) to get the Legislature to pass a law changing the rules. Unfortunately, the problem is so obscure that it is unlikely that this new Section 113.060 will have much applicability.

If a trust names a charity as a beneficiary and that charity ceases to exist, something must be done to designate a new charity. In a well-drafted trust, the possibility of the failure of the named charity can be anticipated and a procedure for choosing a new charity can be included. (Usually the trust instrument provides for the trustee to choose a new beneficiary using whatever criteria the settlor cares to name.) If the trust is silent, however, under prior law a judicial proceeding was needed and the attorney general was a necessary party. The AG sought to assure that the new charity had the same or similar purpose as the old charity.

The new statute basically gives the attorney general notice and the opportunity to pass on triggering a judicial proceeding if the AG is satisfied with the entity picked by the trustee. It also provides that the trustee is to consult with the settlor if the settlor is still living. In a weird twist, the statute provides that the attorney general can be stuck with attorneys fees if the AG unnecessarily drags the trust through the courthouse.

The usefulness of HB 115 is further limited by its effective date provision – it applies only to trusts created on or after August 30, 1999, so it cannot be used with respect to old trusts.

New section 113.060 is the result of compromise between the banking/trustee lobby and the probate lawyers' lobby. Like many compromises, one can look at it two ways – as the proverbial glass that is half empty or half full.

One the plus side, it permits trustees to delegate the authority to make investment decisions to an agent while providing protection for beneficiaries. Corporate trustees have been after the ability to do this for at least two sessions. They view the ability to delegate investment decisions as necessary in their competition with other disciplines in the financial services industry. Probate lawyers have resisted the move out of a fear that the beneficiary would be left with no one to sue if the investment decisions turned out to be poorly made. New section 113.060 makes it possible for investment decisions to be delegated but requires the trustee to stay on the hook for investment decisions or to follow a detailed procedure to assure that the beneficiary has recourse against the agent to whom the authority is delegated.

On the minus side, it is difficult to imagine many corporate trustees availing themselves of the mechanism in the statute for getting off the hook. These requirements are difficult to meet. For example, the investment agent must agree to subject itself to the jurisdiction of the courts of this state and subject itself to the standard of trust management and investment set forth in the Trust Code.

For this reason, it seems unlikely that the new section will come in to play very often.

This new section was pushed through by the insurance lobby to address a very narrow issue – permitting the trustees of poorly drafted net income makeup charitable remainder unitrusts ("NIMCRUTs") to take advantage of aggressive allocation strategies which have been targeted by the Internal Revenue Service as abusive but that, as of May 1999, has not been prohibited. Unfortunately, the insurance lobby had the clout to push through (over the objection of probate lawyers) a broadly applicable statute which may have unintended adverse consequences for other types of trusts.

Some planners advocate the use of NIMCRUTs as "spigot" trusts, where the trustee (usually the noncharitable beneficiary who set up the trust) can turn the income distributions to the noncharitable beneficiary (usually himself or herself) on and off as his or her income needs dictate. A NIMCRUT which invests in a deferred annuity is particularly attractive for this purpose, since no income is generated unless and until the trustee decides to pull income out. Drafters of NIMCRUTs can and should put provisions in the trust instrument permitting this type of allocation if this aggressive technique is desired. The insurance lobby wanted the aggressive approach to be the default rule for all trusts – including other charitable trusts and even noncharitable trusts. The Texas Academy of Probate and Trust Lawyers and I wanted to limit the rule to NIMCRUTS and to make it an opt-in rule rather than a default rule. The only compromise we were able to achieve was the inclusion of the word "Charitable" in the title to the section. It is clear that the legislative intent was to limit this rule to charitable trusts, and the section title makes it clear it was intended to be limited to charitable trusts, but note that the text of the section itself does not so limit the rule.

The insurance lobby also wanted this rule to apply to existing trusts so that this aggressive technique could be used even with respect to existing trusts. Therefore, the new rule applies to "principal and income subject to allocation" on or after September 1, 1999.

New Section 114.032 imports the "virtual representation" concept from the litigation context and makes it applicable in a contractual setting. Trustees occasionally find themselves wanted to agree with the beneficiaries of the trust (for example, to deviate slightly from the trust instrument or to excuse minor violations of the trust instrument). Under prior law, these agreements may be binding on the adult beneficiaries of the trust, but there was no way to make them binding on the minor, incapacitated or unborn future beneficiaries of the trust. New Section 114.032 permits adult beneficiaries to bind their minor children if no conflict of interest exists and to bind unborn and unascertained beneficiaries if their interests are "substantially identical."

This statute should be very useful if a trustee discovers a minor transgression, takes corrective action, discloses it to the beneficiary and wants to be assured that a minor or unborn beneficiary will not some day question the method in which the transgression was corrected. Because the statute expressly does not apply to trust modifications or terminations, it may not be helpful where major departures from the trust instrument are planned.

Note that a full disclosure of material facts is necessary for the new procedure to work.

The new statute applies to written agreements entered into on or after September 1, 1999, even if the trust instrument was executed before that date.

Sec. 115.002. VENUE.

(a) The venue of an action under Section 115.001 of this Act is determined according to this section.

(b) If there is a single, noncorporate trustee, in the county in which

.

(c) If trustee in the county in which the .

(d)

Added by Acts 1983, 68th Leg., Ch. 576, Sec. 2, eff. Jan. 1, 1984. Amended by Acts 1983, 68th Leg., Ch. 567, Art. 2, Sec. 2, eff. Jan. 1, 1984.

HB 2066 (the interstate banking bill) and HB 2317 (a standalone venue bill) made identical changes to the venue section of the Trust Code. The principal change is the introduction of the "situs of administration" issue in trust venue.

Under prior law, a corporate trustee had the right to insist on being sued in the county where its principal office was located. This rule made sense when banks were not permitted to have offices in more than one county. In today's banking environment, however, this meant that suits which arose far away from a bank's "principal office" might end up being tried in Dallas or Houston.

As part of the compromise needed to get the interstate banking bill through the Legislature, the bank and trust company lobby agreed to these new rules.

The key concept is "situs of administration." Although it remains to be seen precisely how this term will be interpreted, it is likely that venue will be placed in the county where the bank has a location and at which it met with the settlor or the beneficiary rather than in the county where it handles the electronic transfer aspects of trust administration.

APPENDIX C – Medical Power of Attorney Form (With Disclosure Statement)

INFORMATION CONCERNING

THE MEDICAL POWER OF ATTORNEY

THIS IS AN IMPORTANT LEGAL DOCUMENT. BEFORE SIGNING THIS DOCUMENT, YOU SHOULD KNOW THESE IMPORTANT FACTS:

Except to the extent you state otherwise, this document gives the person you name as your agent the authority to make any and all health care decisions for you in accordance with your wishes, including your religious and moral beliefs, when you are no longer capable of making them yourself. Because "health care" means any treatment, service, or procedure to maintain, diagnose, or treat your physical or mental condition, your agent has the power to make a broad range of health care decisions for you. Your agent may consent, refuse to consent, or withdraw consent to medical treatment and may make decisions about withdrawing or withholding life-sustaining treatment. Your agent may not consent to voluntary inpatient mental health services, convulsive treatment, psychosurgery, or abortion. A physician must comply with your agent's instructions or allow you to be transferred to another physician.

Your agent's authority begins when your doctor certifies that you lack the competence to make health care decisions.

Your agent is obligated to follow your instructions when making decisions on your behalf. Unless you state otherwise, your agent has the same authority to make decisions about your health care as you would have had.

It is important that you discuss this document with your physician or other health care provider before you sign it to make sure that you understand the nature and range of decisions that may be made on your behalf. If you do not have a physician, you should talk with someone else who is knowledgeable about these issues and can answer your questions. You do not need a lawyer's assistance to complete this document, but if there is anything in this document that you do not understand, you should ask a lawyer to explain it to you.

The person you appoint as agent should be someone you know and trust. The person must be 18 years of age or older or a person under 18 years of age who has had the disabilities of minority removed. If you appoint your health or residential care provider (e.g., your physician or an employee of a home health agency, hospital, nursing home, or residential care home, other than a relative), that person has to choose between acting as your agent or as your health or residential care provider; the law does not permit a person to do both at the same time.

You should inform the person you appoint that you want the person to be your health care agent. You should discuss this document with your agent and your physician and give each a signed copy. You should indicate on the document itself the people and institutions who have signed copies. Your agent is not liable for health care decisions made in good faith on your behalf.

Even after you have signed this document, you have the right to make health care decisions for yourself as long as you are able to do so and treatment cannot be given to you or stopped over your objection. You have the right to revoke the authority granted to your agent by informing your agent or your health or residential care provider orally or in writing or by your execution of a subsequent medical power of attorney. Unless you state otherwise, your appointment of a spouse dissolves on divorce.

This document may not be changed or modified. If you want to make changes in the document, you must make an entirely new one.

You may wish to designate an alternate agent in the event that your agent is unwilling, unable, or ineligible to act as your agent. Any alternate agent you designate has the same authority to make health care decisions for you.

THIS POWER OF ATTORNEY IS NOT VALID UNLESS IT IS SIGNED IN THE PRESENCE OF TWO COMPETENT ADULT WITNESSES. THE FOLLOWING PERSONS MAY NOT ACT AS ONE OF THE WITNESSES:

(1) the person you have designated as your agent;

(2) a person related to you by blood or marriage;

(3) a person entitled to any part of your estate after your death under a will or codicil executed by you or by operation of law;

(4) your attending physician;

(5) an employee of your attending physician;

(6) an employee of a health care facility in which you are a patient if the employee is providing direct patient care to you or is an officer, director, partner, or business office employee of the health care facility or of any parent organization of the health care facility; or

(7) a person who, at the time this power of attorney is executed, has a claim against any part of your estate after your death.

MEDICAL POWER OF ATTORNEY

DESIGNATION OF HEALTH CARE AGENT.

I,_______________________________(insert your name) appoint:

Name:________________________________________________________

Address:_____________________________________________________

Phone____________________________________________

as my agent to make any and all health care decisions for me, except to the extent I state otherwise in this document. This medical power of attorney takes effect if I become unable to make my own health care decisions and this fact is certified in writing by my physician.

LIMITATIONS ON THE DECISION-MAKING AUTHORITY OF MY AGENT ARE AS FOLLOWS:

__________________________________________________________

_______________________________________________________________

DESIGNATION OF ALTERNATE AGENT.

(You are not required to designate an alternate agent but you may do so. An alternate agent may make the same health care decisions as the designated agent if the designated agent is unable or unwilling to act as your agent. If the agent designated is your spouse, the designation is automatically revoked by law if your marriage is dissolved.)

If the person designated as my agent is unable or unwilling to make health care decisions for me, I designate the following persons to serve as my agent to make health care decisions for me as authorized by this document, who serve in the following order:

A.	First Alternate Agent

Name:________________________________________

Address:_____________________________________

Phone__________________________________

B.	Second Alternate Agent

Name:________________________________________

Address:_____________________________________

Phone__________________________________

The original of this document is kept at:

______________________________________________________

______________________________________________________

______________________________________________________

The following individuals or institutions have signed copies:

Name:_________________________________________________

Address:______________________________________________

______________________________________________________

Name:_________________________________________________

Address:______________________________________________

______________________________________________________

DURATION.

I understand that this power of attorney exists indefinitely from the date I execute this document unless I establish a shorter time or revoke the power of attorney. If I am unable to make health care decisions for myself when this power of attorney expires, the authority I have granted my agent continues to exist until the time I become able to make health care decisions for myself.

(IF APPLICABLE) This power of attorney ends on the following date:_____

PRIOR DESIGNATIONS REVOKED.

I revoke any prior medical power of attorney.

ACKNOWLEDGMENT OF DISCLOSURE STATEMENT.

I have been provided with a disclosure statement explaining the effect of this document. I have read and understand that information contained in the disclosure statement.

(YOU MUST DATE AND SIGN THIS POWER OF ATTORNEY.)

I sign my name to this medical power of attorney on ___________ day of _______________________________________________________(month, year) at_________________________________________________________ (City and State).

_________________________________________________________ (Signature)

_________________________________________________________ (Print Name)

STATEMENT OF FIRST WITNESS.

I am not the person appointed as agent by this document. I am not related to the principal by blood or marriage. I would not be entitled to any portion of the principal's estate on the principal's death. I am not the attending physician of the principal or an employee of the attending physician. I have no claim against any portion of the principal's estate on the principal's death. Furthermore, if I am an employee of a health care facility in which the principal is a patient, I am not involved in providing direct patient care to the principal and am not an officer, director, partner, or business office employee of the health care facility or of any parent organization of the health care facility

Signature:____________________________________

Print Name:______________________Date:__________________

Address:________________________________________________

SIGNATURE OF SECOND WITNESS.

Signature:____________________________________

Print Name:______________________Date:__________________

Address:________________________________________________

APPENDIX D – Directive to Physicians and Family or Surrogates Form

DIRECTIVE TO PHYSICIANS AND FAMILY OR SURROGATES

Instructions for completing this document:

This is an important legal document known as an Advance Directive. It is designed to help you communicate your wishes about medical treatment at some time in the future when you are unable to make your wishes known because of illness or injury. These wishes are usually based on personal values. In particular, you may want to consider what burdens or hardships of treatment you would be willing to accept for a particular amount of benefit obtained if you were seriously ill.

You are encouraged to discuss your values and wishes with your family or chosen spokesperson, as well as your physician. Your physician, other health care provider, or medical institution may provide you with various resources to assist you in completing your advance directive. Brief definitions are listed below and may aid you in your discussions and advance planning. Initial the treatment choices that best reflect your personal preferences. Provide a copy of your directive to your physician, usual hospital, and family or spokesperson. Consider a periodic review of this document. By periodic review, you can best assure that the directive reflects your preferences.

In addition to this advance directive, Texas law provides for two other types of directives that can be important during a serious illness. These are the Medical Power of Attorney and the Out-of-Hospital Do-Not-Resuscitate Order. You may wish to discuss these with your physician, family, hospital representative, or other advisers. You may also wish to complete a directive related to the donation of organs and tissues.

DIRECTIVE

I, ______________, recognize that the best health care is based upon a partnership of trust and communication with my physician. My physician and I will make health care decisions together as long as I am of sound mind and able to make my wishes known. If there comes a time that I am unable to make medical decisions about myself because of illness or injury, I direct that the following treatment preferences be honored:

If, in the judgment of my physician, I am suffering with a terminal condition from which I am expected to die within six months, even with available life-sustaining treatment provided in accordance with prevailing standards of medical care:

____	I request that all treatments other than those needed to keep me comfortable be discontinued or withheld and my physician allow me to die as gently as possible; OR

____	I request that I be kept alive in this terminal condition using available life-sustaining treatment. (THIS SELECTION DOES NOT APPLY TO HOSPICE CARE.)

If, in the judgment of my physician, I am suffering with an irreversible condition so that I cannot care for myself or make decisions for myself and am expected to die without life-sustaining treatment provided in accordance with prevailing standards of care:

____	I request that all treatments other than those needed to keep me comfortable be discontinued or withheld and my physician allow me to die as gently as possible; OR

____	I request that I be kept alive in this irreversible condition using available life-sustaining treatment. (THIS SELECTION DOES NOT APPLY TO HOSPICE CARE.)

Additional requests: (After discussion with your physician, you may wish to consider listing particular treatments in this space that you do or do not want in specific circumstances, such as artificial nutrition and fluids, intravenous antibiotics, etc. Be sure to state whether you do or do not want the particular treatment.)

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

After signing this directive, if my representative or I elect hospice care, I understand and agree that only those treatments needed to keep me comfortable would be provided and I would not be given available life-sustaining treatments.

If I do not have a Medical Power of Attorney, and I am unable to make my wishes known, I designate the following person(s) to make treatment decisions with my physician compatible with my personal values:

1._____________________

2._____________________

(If a Medical Power of Attorney has been executed, then an agent already has been named and you should not list additional names in this document.)

If the above persons are not available, or if I have not designated a spokesperson, I understand that a spokesperson will be chosen for me following standards specified in the laws of Texas. If, in the judgment of my physician, my death is imminent within minutes to hours, even with the use of all available medical treatment provided within the prevailing standard of care, I acknowledge that all treatments may be withheld or removed except those needed to maintain my comfort. I understand that under Texas law this directive has no effect if I have been diagnosed as pregnant. This directive will remain in effect until I revoke it. No other person may do so.

Signed__________________________________ Date______________________

City, County, State of Residence __________________________________

Two competent adult witnesses must sign below, acknowledging the signature of the declarant. The witness designated as Witness 1 may not be a person designated to make a treatment decision for the patient and may not be related to the patient by blood or marriage. This witness may not be entitled to any part of the estate and may not have a claim against the estate of the patient. This witness may not be the attending physician or an employee of the attending physician. If this witness is an employee of a health care facility in which the patient is being cared for, this witness may not be involved in providing direct patient care to the patient. This witness may not be an officer, director, partner, or business office employee of a health care facility in which the patient is being cared for or of any parent organization of the health care facility.

Witness 1________________________Witness 2_________________________

Definitions:

"Artificial nutrition and hydration" means the provision of nutrients or fluids by a tube inserted in a vein, under the skin in the subcutaneous tissues, or in the stomach (gastrointestinal tract).

"Irreversible condition" means a condition, injury, or illness:

(1) that may be treated, but is never cured or eliminated;

(2) that leaves a person unable to care for or make decisions for the person's own self; and

(3) that, without life-sustaining treatment provided in accordance with the prevailing standard of medical care, is fatal.

Explanation: Many serious illnesses such as cancer, failure of major organs (kidney, heart, liver, or lung), and serious brain disease such as Alzheimer's dementia may be considered irreversible early on. There is no cure, but the patient may be kept alive for prolonged periods of time if the patient receives life-sustaining treatments. Late in the course of the same illness, the disease may be considered terminal when, even with treatment, the patient is expected to die. You may wish to consider which burdens of treatment you would be willing to accept in an effort to achieve a particular outcome. This is a very personal decision that you may wish to discuss with your physician, family, or other important persons in your life.

"Life-sustaining treatment" means treatment that, based on reasonable medical judgment, sustains the life of a patient and without which the patient will die. The term includes both life-sustaining medications and artificial life support such as mechanical breathing machines, kidney dialysis treatment, and artificial hydration and nutrition. The term does not include the administration of pain management medication, the performance of a medical procedure necessary to provide comfort care, or any other medical care provided to alleviate a patient's pain.

"Terminal condition" means an incurable condition caused by injury, disease, or illness that according to reasonable medical judgment will produce death within six months, even with available life-sustaining treatment provided in accordance with the prevailing standard of medical care.

Explanation: Many serious illnesses may be considered irreversible early in the course of the illness, but they may not be considered terminal until the disease is fairly advanced. In thinking about terminal illness and its treatment, you again may wish to consider the relative benefits and burdens of treatment and discuss your wishes with your physician, family, or other important persons in your life.

APPENDIX E – Declaration of Guardian for Minor Children Form

DECLARATION OF APPOINTMENT OF GUARDIAN FOR

MY CHILDREN IN THE EVENT OF MY DEATH

I, ___________________, make this Declaration to appoint as guardian for my child or children, listed as follows, in the event of my death:

________________________________ ________________________________

________________________________ ________________________________

________________________________ ________________________________

(add blanks as appropriate)

I designate ____________________ to serve as guardian of the person of my (child or children), _________________ as first alternate guardian of the person of my (child or children), ____________________ as second alternate guardian of the person of my (child or children), and ________________________ as third alternate guardian of the person of my (child or children).

I direct that the guardian of the person of my (child or children) serve (with or without) bond.

(If applicable) I designate _________________ to serve as guardian of the estate of my (child or children), _____________________ as first alternate guardian of the estate of my (child or children), _____________________ as second alternate guardian of the estate of my (child or children), and ______________________ as third alternate guardian of the estate of my (child or children).

If any guardian or alternate guardian dies, does not qualify, or resigns, the next named alternate guardian becomes guardian of my (child or children).

Signed this __________ day of __________, 19___.

________________________________

Declarant

________________________________

Witness

________________________________

Witness

SELF-PROVING AFFIDAVIT

Before me, the undersigned authority, on this date personally appeared the declarant, and __________________________ and _________________________ as witnesses, and all being duly sworn, the declarant said that the above instrument was his or her Declaration of Appointment of Guardian for the Declarant's Children in the Event of Declarant's Death and that the declarant had made and executed it for the purposes expressed in the declaration. The witnesses declared to me that they are each 14 years of age or older, that they saw the declarant sign the declaration, that they signed the declaration as witnesses, and that the declarant appeared to them to be of sound mind.

________________________________

Declarant

________________________________

Affiant

________________________________

Affiant

Subscribed and sworn to before me by the above named declarant and affiants on this ____ day of ________________, 19___.

________________________________

Notary Public in and for the State of Texas

My Commission expires: _____________

APPENDIX F – Affidavit of Heirship Form

AFFIDAVIT OF FACTS CONCERNING THE IDENTITY OF HEIRS

Before me, the undersigned authority, on this day personally appeared _________________________ ("Affiant") (insert name of affiant) who, being first duly sworn, upon his/her oath states:

1. My name is ____________________________ (insert name of affiant), and I live at ______________ (insert address of affiant's residence). I am personally familiar with the family and marital history of ___________________________ ("Decedent") (insert name of decedent), and I have personal knowledge of the facts stated in this affidavit.

2. I knew decedent from ___________________ (insert date) until ________________ (insert date). Decedent died on ___________________ (insert date of death). Decedent's place of death was _____________________________ (insert place of death). At the time of decedent's death, decedent's residence was ____________________________________ (insert address of decedent's residence).

3. Decedent's marital history was as follows:

________________________________________________________________________

________________________________________________________________________

(insert marital history and, if decedent's spouse is deceased,

insert date and place of spouse's death).

4. Decedent had the following children:

________________________________________________________________________

________________________________________________________________________

(insert name, birth date, name of other parent, and current address of child or date of death of child and descendants of deceased child, as applicable, for each child).

5. Decedent did not have or adopt any other children and did not take any other children into decedent's home or raise any other children, except: ________________________________ (insert name of child or names of children, or state "none").

6. (Include if decedent was not survived by descendants.) Decedent's mother was:

________________________________________________________________________

(insert name, birth date, and current address or date of death of mother, as applicable).

7. (Include if decedent was not survived by descendants.) Decedent's father was:

________________________________________________________________________

(insert name, birth date, and current address or date of death of father, as applicable).

8. (Include if decedent was not survived by descendants or by both mother and father.) Decedent had the following siblings:

________________________________________________________________________

________________________________________________________________________

(insert name, birth date, and current address or date of death of each sibling and parents of each sibling and descendants of each deceased sibling, as applicable, or state "none").

9. (Optional.) The following persons have knowledge regarding the decedent, the identity of decedent's children, if any, parents, or siblings, if any:

________________________________________________________________________

________________________________________________________________________

(insert names of persons with knowledge, or state "none").

10. Decedent died without leaving a written will. (Modify statement if decedent left a written will.)

11. There has been no administration of decedent's estate. (Modify statement if there has been administration of decedent's estate.)

12. Decedent left no debts that are unpaid, except:

________________________________________________________________________

________________________________________________________________________

(insert list of debts, or state "none").

13. There are no unpaid estate or inheritance taxes, except:

________________________________________________________________________

________________________________________________________________________

(insert list of unpaid taxes, or state "none").

14. To the best of my knowledge, decedent owned an interest in the following real property:

________________________________________________________________________

________________________________________________________________________

(insert list of real property in which decedent owned an interest, or state "none").

15. (Optional.) The following were the heirs of decedent:

________________________________________________________________________

________________________________________________________________________

(insert names of heirs).

16. (Insert additional information as appropriate, such as size of the decedent's estate.)

Signed this ____ day of ____________, ______.

____________________________________

(signature of affiant)

State of ________________

County of _______________

Sworn to and subscribed to before me on ___________ (date) by _________________________ (insert name of affiant).

____________________________________

(signature of notarial officer)

(Seal, if any, of notary)

____________________________________

(printed name)

My commission expires: ________

APPENDIX G – New Subchapter C to Chapter 4 of Texas Family Code

(Effective January 1, 2000)

SUBCHAPTER C. AGREEMENT TO CONVERT SEPARATE PROPERTY TO COMMUNITY PROPERTY

Sec. 4.201. DEFINITION. In this subchapter, "property" has the meaning assigned by Section 4.001.

Sec. 4.202. AGREEMENT TO CONVERT TO COMMUNITY PROPERTY. At any time, spouses may agree that all or part of the separate property owned by either or both spouses is converted to community property.

Sec. 4.203. FORMALITIES OF AGREEMENT.

(a) An agreement to convert separate property to community property:

(1) must be in writing and:

(A) be signed by the spouses;

(B) identify the property being converted; and

(C) specify that the property is being converted to the spouses' community property; and

(2) is enforceable without consideration.

(b) The mere transfer of a spouse's separate property to the name of the other spouse or to the name of both spouses is not sufficient to convert the property to community property under this subchapter.

Sec. 4.204. MANAGEMENT OF CONVERTED PROPERTY. Except as specified in the agreement to convert the property and as provided by Subchapter B, Chapter 3, and other law, property converted to community property under this subchapter is subject to:

(1) the sole management, control, and disposition of the spouse in whose name the property is held;

(2) the sole management, control, and disposition of the spouse who transferred the property if the property is not subject to evidence of ownership;

(3) the joint management, control, and disposition of the spouses if the property is held in the name of both spouses; or

(4) the joint management, control, and disposition of the spouses if the property is not subject to evidence of ownership and was owned by both spouses before the property was converted to community property.

Sec. 4.205. ENFORCEMENT.

(a) An agreement to convert property to community property under this subchapter is not enforceable if the spouse against whom enforcement is sought proves that the spouse did not:

(1) execute the agreement voluntarily; or

(2) receive a fair and reasonable disclosure of the legal effect of converting the property to community property.

(b) An agreement that contains the following statement, or substantially similar words, prominently displayed in bold-faced type, capital letters, or underlined, is rebuttably presumed to provide a fair and reasonable disclosure of the legal effect of converting property to community property:

"This instrument changes separate property to community property. This may have adverse consequences during marriage and on termination of the marriage by death or divorce. For example:

"Exposure to creditors. If you sign this agreement, all or part of the separate property being converted to community property may become subject to the liabilities of your spouse. If you do not sign this agreement, your separate property is generally not subject to the liabilities of your spouse unless you are personally liable under another rule of law.

"Loss of management rights. If you sign this agreement, all or part of the separate property being converted to community property may become subject to either the joint management, control, and disposition of you and your spouse or the sole management, control, and disposition of your spouse alone. In that event, you will lose your management rights over the property. If you do not sign this agreement, you will generally retain those rights.

"Loss of property ownership. If you sign this agreement and your marriage is subsequently terminated by the death of either spouse or by divorce, all or part of the separate property being converted to community property may become the sole property of your spouse or your spouse's heirs. If you do not sign this agreement, you generally cannot be deprived of ownership of your separate property on termination of your marriage, whether by death or divorce."

Sec. 4.206. RIGHTS OF CREDITORS; RECORDING.

(a) A conversion of separate property to community property does not affect the rights of a preexisting creditor of the spouse whose separate property is being converted.

(b) A conversion of separate property to community property may be recorded in the deed records of the county in which a spouse resides and of the county in which any real property is located.

(c) A conversion of real property from separate property to community property is constructive notice to a good faith purchaser for value or a creditor without actual notice only if the agreement to convert the property is acknowledged and recorded in the deed records of the county in which the real property is located.