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Revised November 12, 2008
This article reviews the legislation enacted by the 2005 Texas Legislature relating to the Texas law of estate administration. The reader is warned that not all recent legislation is presented and not all aspects of each cited statute are analyzed. You must read and study the full text of the legislation before relying on it or using it as authority.
Amendments made in 2003 to Probate Code § 5 caused confusion
regarding the jurisdiction of a statutory probate court over
testamentary trusts. Section 5(e), effective with regard to actions
filed on or after September 1, 2005, makes it clear that a statutory
probate court has concurrent jurisdiction with the district court in all
actions involving a testamentary trust.
Several recent cases had held that “[t]he mere fact that a plaintiff
happens to be a trustee, however, does not transfer a case into one
‘concerning trusts’” thereby giving a statutory probate court
jurisdiction over the case. Mobil Oil Corp. v. Shores, 128 S.W.3d 718,
725 (Tex. App.—Fort Worth 2004, no pet.). See also Shell Cortez Pipeline
Co. v. Shores, 127 S.W.3d 286 (Tex. App.—Fort Worth 2004, no pet.).
Probate Code § 5(e) was amended to reverse the effect of these cases
with respect to an action filed on or after September 1, 2005. The
section now provides that the statutory probate court has jurisdiction
“in all actions by or against a trustee.”
Probate Code § 5(b-1) was amended to permit a party to a probate case
pending in a constitutional county court to file a motion for the
assignment of a statutory probate court judge even before the matter
becomes contested. If the matter is actually contested at a later time,
the amendment requires the constitutional county court judge to grant
the pre-contest motion and prevents the judge from transferring the case
to a district court instead.
The amendment also provides that if the constitutional county court
judge had previously transferred the case to a district court using
authority granted elsewhere (that is, not because of a contest), the
party still has the right to have the matter assigned to a statutory
probate court judge.
Effective for the estates of decedents who die on or after June 17,
2005, the person appointed as a temporary administrator has a longer
time to file bond with the county clerk. Under prior law, the filing had
to be done on the date of the order. Now, the appointee has until the
third business day after the date of the order. Business day is defined
as a day “other than a Saturday, Sunday, or holiday recognized by
[Texas].” See Prob. Code § 131A.
Probate Code § 248 was amended to require that good cause be shown
before a court may appoint appraisers, either on the court’s own motion
or upon the application of an interested party. Note that this change
was included in two enacted bills (SB 347 and HB 3434) but with slightly
different language.
Amendments to Probate Code §§ 271 and 272 make it clear that the
homestead may be set aside and delivered only to the surviving spouse or
minor children. Under the prior wording of the statute, the homestead
could arguably be set aside for unmarried children remaining with the
family of the decedent. These amendments finally bring the statutes into
conformity with the 115 year old Texas Supreme Court case of Zwernemann
v. Von Rosenburg, 13 S.W. 485 (Tex. 1890), which held similar language
in a prior version of the statute to be contrary to the Texas
constitution.
Because of the repeal of the common law doctrine of exoneration by
Probate Code § 71A, discussed above, subsection (c-1) was added to
Probate Code 306 to handle the situation where a secured creditor elects
matured secured claim status. First, the personal representative is
required to collect from the beneficiary the amount of the debt and pay
that amount to the secured creditor. If there is more than one
beneficiary of the encumbered property, each pays a pro rata share of
the debt.
Second, if the personal representative is unable to collect enough money
to pay off the debt, then the property is sold. The proceeds of the sale
are first used to pay the debt and any expenses associated with the
sale. If there is a surplus, it will be divided pro rata among the
beneficiaries of the specific gift. If there is a deficiency, the
creditor has an unsecured claim for that amount.
With regard to the estates of decedents who die on or after September
1, 2005, Class 2 claims are expanded because of an amendment to Probate
Code § 322. Class 2 claims now include not only the administration
expenses triggered by the decedent’s death but also the unpaid expenses
awarded in a guardianship of the decedent. This change prevents these
expenses from losing the priority status they enjoyed while the
decedent-ward was alive under Probate Code § 805.
This article reviews the legislation enacted by the 2005 Texas
Legislature relating to the Texas law of estate administration. The
reader is warned that not all recent legislation is presented and not
all aspects of each cited statute are analyzed. You must read and study
the full text of the legislation before relying on it or using it as
authority.
In publishing this article, the author is not engaged in rendering
legal, accounting or other professional service. If legal advice is
required, the service of a competent professional should be sought.
© 2006 Gerry W. Beyer