CLE: 2009: Courthouse Morals and Legislative Expectations: A Review of Recent Cases and Proposed Legislation Impacting Texas Estate Planners

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CLE: 2009: Courthouse Morals and Legislative Expectations: A Review of Recent Cases and Proposed Legislation Impacting Texas Estate Planners

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Gerry W. Beyer

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St. Mary's University School of Law San Antonio Texas Alumni Homecoming, St. Mary's University School of Law Alumni Homecoming

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2009-03-27

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St. Mary's University School of Law Alumni Homecoming

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RFC3778

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STMU_HomecomingCLE2009Beyer

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COURTHOUSE MORALS AND LEGISLATIVE EXPECTATIONS:

A REVIEW OF RECENT CASES AND PROPOSED LEGISLATION
IMPACTING TEXAS ESTATE PLANNERS

GERRY W. BEYER

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Governor Preston E. Smith Regents Professor of Law
Texas Tech University School of Law
1802 Hartford St. ·
Lubbock, TX 79409-0004
(806) 742-3990
gwb@ProfessorBeyer.com
http://www.ProfessorBeyer. com
http://www.BeyerBlog. com

ST. MARY'S UNIVERSITY SCHOOL OF LAW 2009 HOMECOMING CLE

San Antonio, Texas
March 27, 2009

© 2009 Geny W. Beyer

TABLE OF CONTENTS
TABLE OF CASES ....... ....... ..... ...... .................................................................. ............................. .................. iii

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I. INTRODUCTION .................................................................................................................................. 1

II. INTESTACY ......................................................................................................................................... 1
III. WILLS .................................................................................................................................................. 1
A. Formalities ............................................................................................................................................... 1
I. Attested Will ................................................. ...... ............ ..................... .............................................. I
2. Nuncupative Will .. ........ ............................................................................................................... ...... I
B. Lost Will ................................................................................................................................................... 2
I. Revocation Presumption Rebutted ............... ............................................................... ........ ........ ....... 2
2. Revocation Presumption Not Rebutted .............................................................................................. 2
C. Undue Influence....................................................................................................................................... 3

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D. Disclaimer ................................................................................................................................................ 3
I. Knowledge of Property Disclaimed .............................................................................. ..... ............. ... 3
2. Val idity of Disclaimer ....................................................................................................................... 3

E. Settlemen t Agreements ............................................................................................................................ 4

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IV. ESTATE ADMINISTRATION .......................................................................................................... 4

A. Venue ........................................................................................................................................................ 4

B. Removal of Executor ............................................................................................................................... 5
I . Gross Mismanagement ................ ...................................................................................................... 5
2. On Comt's Own Motion ..................................... .. .................................................. ............. .............. S

c.

Inventory .................................................................................................................................................. 6

D. Exempt Property ..................................................................................................................................... 6

E. Family Allowance .................................................................................................................................... 7
I. Determination of Amount .................................................... ......................... .................. ................... 7
2. Consideration of Surviving Spouse's Separate Property ................................ ............................ ....... 7

F. Specific Performance ............................................................................................................................... 7
G. Attorney's Fees -- Unsuccessful Attempt to Probate Will ................................................................... 8
H. I nd epend ent Administration .................................................................................................................. 8
I. Appointment of Independent Executor ............................................ ............................................. ..... 8
a. Named Executor Deemed Unsuitable ....................................................................... ................ 8
b. Named Executor Deemed Unsuitable- Another Case .......... ........................ ..................... ...... 8
2. Creditors ................................. ...................................... ..................................................................... 9
3. Closing by Operation of Law ................ .. ................................................................................. .. ....... 9

COURTHOUSE MORALS AND LEGISLATIVE EXPECTATIONS:

A REVIEW OF RECENT CASES AND PROPOSED LEGISLATION IMPACTING TEXAS ESTATE PLANNERS

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V. TRUSTS ............................................................................................................................................... lO
A. Creation ofTrust ................................................................................................................................... lO
I. Intent ....................... ............. ............................................................................................................ I 0
2. Property Description .... .............................. ...................................................................................... I 0
B. Spendthrift Provision ............................................................................................................................ ] 0
C. Construction and Interpretation .......................................................................................................... Jl
I. "Descendants" Generally ................................................................................................................. II
2. "Descendants" and Adoption ........... .......................................... ............ ............................. ............. II
D. Modification ........................................................................................................................................... l2
E. Jurisdiction ............................................................................................................................................. l3
I. Generally ...................................................... .................................................................................. . l3
2. County Court ............................................................ ..... .................................................................. 13
3. Statutory Probate Court ................................................... ................................................................ 13

F. Deviation ................................................................................................................................................. 14
G. Attorneys' Fees ...................................................................................................................................... 14

VI. OTHER ESTATE PLANNING MATTERS ................................................................................... 14
A. Power of Attorney ................................................................................................................................. 14

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TABLE OF CASES
Citigroup Global Markets, Inc. v. Brown .................................................................................................................... I 4

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Estate ofWolfe ................................................................................................................. ......... ... ............ ............... ...... 7
In re Ashton .............................................................................................................................................. ................... 13
In re Estate of Alexander ............................... ............................................. ................................................................... I
In re Estate ofBoren ................ ................................................................................. ........ ........... ............. ................. 3, 8
In re Estate of Gaines .......................................................................................................................................... 8, 9, 13

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In re Estate ofHenry .............................................................. ........ ..... ..... .................. ................................... ............ .3, 8
In re Estate ofPruitt ....... ............................................................................... ................... ... .......................... ......... ........ l
In re Estate of Rhea ................................................................................................................................................... 6, 7
In re Estate ofTeinert ....................................................................................................... .............. ............................ ... 9
In re Estate ofTumer ..................................................................................................................................................... 2
In re Estate ofWalker .......... .. .............................. .......................................... ...... ............................. .............. .......... 6, 10
In re Estate of Was hington ........... ................................................. ............. ............... ...... .............................................. 5
In re Estate ofWebb ........................................................................................................................... ............... ..... .4, I2
In re Estate of Wi lson ..................................................................................................................................... ............... 2
In re Graham ................................................... .............. ............................... ........................... ...................................... .4
In re Guardiansh ip of Gibbs ................... .............................. .................... ... ............................. .................. ............ ..... I 3
In re Ray Ellison Grandchildren Trust .................................................................................................................. 11, 14
In re Roy ................................................... ........... .................... ...................................................................................... 5
In re Townley Bypass Unified Credit T rust ................................................................................................................ I 0
In re White Intervivos Trusts ............................................................. ............. ............................................................. 14
McCuen v.Huey ............................................................................................................................................................. 3
Paschall v. Bank of America, N.A ............................................................................................................................... ll
Sarah v. Primarily Primates, Inc .................................................. ............. .......... ..... ........ .......... .................................. ! 0
Wells v. Dotson ............................................... ........ .......................................................... ............................................ 7

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A REVIEW OF RECENT CASES AND PROPOSED LEGISLATION
IMPACTING TEXAS ESTATE PLANNERS

I. INTRODUCTION

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This article discusses judicial developments
relating to the Texas law of intestacy, wills,
estate administration, trusts, and other estate
planning matters.
The a1ticle reviews
approximately twenty-five recent cases. The
reader is warned that not all recent cases are
presented and not all aspects of each cited case
are analyzed. You must read and study the full
text of each case before relying on it or using it
as precedent. Writ histories were current as of
March 5, 2009 (KeyCite service as provided on
WESTLAW).

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The discussion of each case concludes with a
moral, i.e., the important lesson to be learned
from the case. By recognizing situations which
have led to time consum ing and costly litigation
in the past, estate planners can reduce the
likelihood of the same situations arising with
their clients.

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For summaries of cases decided after the
closing date for this article, please visit my
website at http://www.ProfessorBeyer.com and
click on the "Texas Case Summaries" link.

II. INTESTACY
No appellate cases to report.

III. WILLS
A. Formalities

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1. Attested Will

In re Estate ofPruitt, 249 S.W.3d 654
(Tex. App.- Fort Worth 2008, no pet. h.).

Testatrix left nominal amounts in her will to
her estranged children and the bulk of her estate
to Beneficiaries. The evidence revealed that the
witnesses attested to the will before Testatrix
signed the will. The trial court determined that
this "backward" order was fatal to the validity of
the will and granted a summary judgment that
Testatrix died intestate. Beneficiaries appealed.
The appellate court reversed. The court
examined Texas cases. The older cases adopted a
strict rule that the attestation must occur after the
testator signs the will because witnesses cannot
attest to something that has not yet happened.
The modern cases, however, adopt a
contemporaneous transaction approach so that if
the execution and attestation occur at the same
time and place and fo rm part of the same
transaction, it does not matter in which order the
events occur.
The coUJt adopted this latter
approach. After studying the evidence, the court
determined that there was a genuine issue of
material fact and thus held that the trial court
erroneously granted summary j udgment.
Mo.-al: The testator should execute the will
before the witnesses attest to avoid disputes
based on the temporal order of these events.

2. Nuncupative Will

In re Estate ofAlexander, 250 S.W.3d
461 (Tex. App.- Waco 2008, pet.
denied).
After the probate court opened an intestate
administration of Decedent's estate, Beneficiary
alleged that Decedent made a nuncupative will.
Both the probate and appellate courts held that
Decedent did not speak the alleged testamentary
words while in his " last sickness" as required by

COURTHOUSE MORALS AND LEGISLATIVE EXPECTATIONS:

A REVIEW OF RECENT CASES AND PROPOSED LEGISLATION IMPACTING TEXAS ESTATE PLANNERS

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Probate Code § 65. The court explained that the
courts have consistently interpreted this statutory
phrase as meaning that the testator must be "in
extremis," that is, on one's deathbed, to make a
valid nu ncupative will. The facts showed that
although Decedent was hospitalized when he
spoke the testamentary words, he was later
released and did not die until over two weeks
later. Merely suffering from a chronic illness at
the time of speaking the words is not enough.

fatally shot himself.
Testator's dis inherited
siblings and many other people had access to
Testator's house shortly after his death.
In
addition, there was evide nce of a close
relationship between Sister and Testator and no
evidence of recent discord.
Moral: The presumption of revocation wh ich
arises when the original will cannot be found
may be rebutted by a preponderance of the
evidence.

Note: As of September 1, 2007, Texans may
no longer make nuncupative wills. Acts 2007,
1
80 h Leg., ch. 1170, § 5.05 (repealing Probate
Code§§ 64 & 65).

2. Revocation Presumption Not Rebutted

In re Estate ofWilson, 252 S.W.3d 708
(Tex. App.-Texarkana 2008, no pet. h.).

Moral: Suffering from a chronic condition at
the t ime of speaking testamentary words is
ins ufficient to satisfy the "last sickness"
requirement of a nuncupative will unless the
decedent spoke the words at the very last stage of
the illness.

After Husband d ied, W ife was successful in
probating Husband's wi ll even though she could
not locate the original will. Son (Wife's stepson) contested the probate of the wi ll claiming
that the evidence was legally insufficient to rebut
the presumption of revocation that arises when
the original will cannot be located.

B. Lost Will

The appellate court agreed with Son. The
court began its analysis by recognizing that when
a will was last known to be in the testator's
possession and cannot be located after death, a
presumption of revocation arises which can be
rebutted by a preponderance of the evidence.
The court also expla ined that "the testator's
continued affection for the chief beneficiary [of
the will], without evidence tending to show the
decedent's dissatisfactio n with the will or any
desire to cancel or change the will, is sufficient to
rebut the presumption of revocation of a missing
will. " Id. at 713 .

1. Revocation Presumption Rebutted

In re Estate ofTurner, 265 S.W.3d 709
(Tex. App.- Eastland 2008, no pet. h.).

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The trial court admitted a photocopy of
Testator's will to probate even though the
original will could not be found after what
Beneficiary claimed was a diligent search. The
appellate court affirmed.
The court recognized that "[w)hen the original
will cannot be located and the will was last seen
in the testator's possession, a presumption arises
that the testator destroyed the will with the intent
of revoking it." Id. at 712. The proponent ofthe
will must overcome the revocation presumption
by a preponderance of the evidence. The court
concluded that the evidence submitted was
sufficient to rebut the presumption. For example,
Sister (sole beneficiary) testified seeing the will
one week before Testator's death and G irlfriend
saw it on the day of Testator's death. Girlfriend
testified that Testator showed her his will,
1eturned it to its usual storage location, watched
television for 1.5 hours, went to his bedroom, and

The court then examined the record and found
it Jacking of any direct evidence of why the
original will could not be located. Wife's mere
statement that as far as she knew and believed,
Husband had not revoked the will is not evidence
of the asserted facts. In addition, there was no
evidence of Husband's continued affection for
Wife or that Husband had continued to recognize
the will 's validity. Accordingly, the court held
that the evidence was legally insuffic ient to rebut
the revocation presumption and remanded the
case to the trial court.

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Note:
This case also involved several
procedural issues such as the requirements of a
restricted appeal, when evidence is considered
legally insufficient, and proper extent of a
remedy (render or remand).

D. Disclaimer

I. Knowledge of Property Disclaimed

McCuen v.Huey, 255 S.W.3d 716 (Tex.
App.- Waco 2008, no pet. h.).

Moral: Original wills need to be protected so
that they are available at the time of probate and
are not inadvertently lost, destroyed, or located
by disgruntled heirs.

In an extremely complex fact pattern
involving mineral royalty interests wh ich is
fortunately not particularly relevant for our
purposes, the appellate court held that "to be
effective, a disclaimer of an inheritance is
enforceable against the maker only when it has
been made with adequate knowledge of that
which is being disclaimed." McCuen, at 73 1. By
noting the case of Nw. Nat 'I Cas. Co. v.
Doucette, 817 S.W.2d 396 (Tex. App.-Fort
Worth
1991, writ
denied),
the court
acknowledged that this case is significantly
different from cases which hold that a disclaimer
may be effective even if the disclaimant is
mistaken not about what property is being
disclaimed, but rather about to whom the
disclaimed property would pass. Accord ingly,
the court held that the alleged disclaimer in this
case was ineffective because the disclaimant did
not knowi ngly disclaim the disputed royalty
interests.

C. Undue Influence

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In re Estate ofHenry, 250 S.W.3d 518
(Tex. App.-Dallas 2008, no pet. h.).
Testatrix's first will left her property to an
inter vivos trust which included both her children
and her step-children as benefici aries.
Her
second will, however, left her property outright
to her husband . The probate court admitted the
second will to probate. Testatrix's children
appealed claiming this will was invalid because
Testatrix executed it while under undue
influence.
The appellate court affirmed holding that
there was insufficient evidence to show that
Testatrix's second will was the result of undue
influence.
Testatrix's children presented
evidence which they claimed proved undue
influence such as statements that Testatrix was
uncomfortable with signing a new will and that
her husband (now deceased) said he would
divorce her if she did not sign the new will.
However, this evidence was counterbalanced by
testimony of Testatrix's attorneys that she never
indicated that she was being coerced and that
Testatrix even sought the advice of another
attorney. In addition, Testatrix's husband was
not present when she signed the new will. The
appellate court then concluded that the probate
court's finding was not against the great weight
and preponderance of the evidence to be clearly
wrong and unjust.

Moral: Disclaimers should be carefully
drafted to enumerate the property being
disclaimed to avoid a later argument that the
disclaimant did not understand what property was
being disclaimed.

2. Validity ofDisclaimer

In re Estate ofBoren, 268 S. W.3d 841
(Tex. App.- Texarkana 2008, pet.
denied).
Beneficiaries signed disclaimers of all
property to which they would be entitled from
Testatrix's estate prior to her death. On the same
day that Testatrix died, Beneficiaries filed
revocations of those disclaimers. The trial court
held that the disclaimers were effective.

Moral: Strong evidence is needed to overturn
a probate court's finding that undue influence did
not cause a testator to sign a will.

The appellate court reversed.
The court
explained that the disclaimers were not filed in
accordance with Probate Code § 37 A but instead

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were filed in the papers of Testatrix's spouse's
guardianship. Filing in the wrong place is both
against the letter of the law and the policy of the
filing requirement which is to give notice to
creditors and prospective purchasers. Because
Beneficiaries revoked their disclaimers before
they were properly filed, their attempt to revoke
them was successful.

Moral: A testamentary trustee is a necessary
party to (I) family settlement agreements and (2)
actions involving the trust.

Moral: A disclaimer should be filed in the
appropriate location as mandated by Probate
Code§ 37A.

In re Graham, 251 S. W.3d 844 (Tex.
App.-Austin 2008, no pet. h.).

IV. EST ATE ADMINISTRATION
A. Venue

Decedent was domiciled in Travis County at
the time of her death. Probate Code § 6 provides
that venue is mandatory in the county where the
deceased resided if the deceased has a domicile
of fixed place of residence in Texas.
Nonetheless, Decedent's will was filed for
probate in Tom Green County and the applicants
swore that Decedent was domiciled in Tom
Green County. The court believed the applicants
and the will was admitted to probate in Tom
Green County.
When subsequent litigation
occurred, one of the applicants moved to transfer
the case to Travis County because Decedent was
domiciled there at the time of death. The trial
court denied the motion and the applicant
requesting the transfer sought a writ of
mandamus to compel the transfer.

E. Settlement Agreements
In re Estate ofWebb, 266 S.W.3d 544
(Tex. App.-Fort Worth 2008, pet.
fil ed).

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Will and testamentary trust beneficiaries
reached a settlement with respect to various will
and trust matters. Beneficiaries then sought to
modifY the trust under Property Code § 112.054
to bring it into compliance with their settlement.
Trustee objected claiming that he was not a party
to the settlement. The trial court held that
Trustee was not a necessary party to the
modification action and granted Beneficiaries'
motion to strike the Trustee' s intervention in the
case.

The appellate court agreed with the applicant
and conditionally granted the writ of mandamus.
The court rejected arguments that the motion to
transfer was partial or was a collateral attack.
Instead, it was a motion to transfer the entire
probate case and thus was a direct challenge to
the venue determination made in the order
admitting the will to probate. The court also
rejected the argument that under Probate Code
§ 8(c)(1 ), the court could not transfer the case for
want of venue because the order admitting the
will to probate was a final decree. The coutt
explained that an order admitting a will to
probate is not a final decree.

The appellate court reversed.
The court
determined that Trustee was a necessary party to
the settlement as well as a necessary party to any
action to modifY the trust.
Property Code
§ 115.011 provides that the trustee is a necessary
party if the " trustee is servin g at the time the
action is filed ." T he court explained that under
Probate Code § 37, title to property vests in the
beneficiary immediately upon a testator's death
unless the will provides otherwise. The testator's
w ill did not provide otherwise and thus when the
testator died, the trustee, as a beneficiary of the
property albeit it trust, had title to the property.
Thereafter, Trustee accepted the trust and thus he
was serving as a trustee making him a necessary
party to the action. Likewise, because Trustee
was a beneficiary of the will, a family settlement
agreement would not be binding upon him
without his consent.

The court noted that although one of
applicants had originally s igned the Proof of
Death swearing that Decedent was domiciled in
Travis County, such action did not act as a
judicial admission as this applicant was not a
party to the proceeding at the time he made the

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statement. In addition, a statement about a
person's domicile is a legal conclusion which a
non-attorney is unskilled to make and he did not
have legal counsel when he made the statement.

named in Testatrix' will.
appealed.

The appellate court affirmed. The court began
its analysis by reviewing Probate Code § 149C
which provides the grounds for removing an
independent executor. The court examined the
evidence and determined that it was sufficient to
support the trial court's finding that Independent
Executor was guilty of gross misconduct or gross
mismanagement in the performance of his duties
which is a ground for removal under
§ 149C(a)(5).

Finally, the court conducted a careful review
of the evidence regarding domicile and
determined that "[t]he evidence that [Decedent]
s lept, gardened, entertained guests, stored her
personal possessions, and generally conducted
Travis
County
day-to-day
activities
in
conclusively establishes residence in fact and
intent to the make the residence her home." In re
Graham at 851.

The court upheld the trial court's denial of an
award of Independent Executor's fees in
defending the removal action because he did not
defend his action for removal in good faith. The
court agreed that it was proper for the trial court
to appoint the successor executor as named in
Testatrix's will because there was no evidence
that he was disqualified under the Probate Code
§ 78.

A dissenting judge believed that there was
sufficient evidence to support the trial court's
determination that venue was in Tom Green
County, especially because the applicant's
motion came 1.5 years after the court admitted
the will to probate and only because litigation
had erupted between the original applicants.

Moral: Probate Code § 6 is a mandatory
venue provision and thus it is essential to bring
probate actions in the correct county to reduce
the likelihood of later procedural disputes based
on Jack of venue.

Moral: An independent executor should not
breach fiduciary duties by self- dealing and
mismanaging estate property.
2. On Court's Own Motion

B. Removal of Executor
In re Estate ofWashington, 262 S.W.3d
903 (Tex. App.- Texarkana 2008, no
pet. h.).

1. Gross Mismanagement

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Independent Executor

In re Roy, 249 S.W.3d 592 (Tex.
App. -Waco 2008, pet. filed).

The trial comt on its own motion removed the
administrator for fai ling to file required
accountings under Probate Code § 222(b)(2).
The appellant did not allege that the trial court
did not have sufficient evidence to support the
removal. Instead, the appellant claimed that the
petitioners lacked standing or that limitations
prevented them from intervening in the action.
The court explained that the trial court has the
authority to remove the administrator sua sponte
and thus the issues of standing and limitations
were irrelevant.

Testatrix's will named one of her four
children as the Independent Executor of her
estate. T he trial court removed him from office
for various breaches of duty. For example , he
signed leases for approximately half of the rent
than Testatrix had been receiving. Once the
children discovered this fact, they demanded an
accounting and then objected to various items
contained therein. The trial court reviewed the
evidence and detennined that he had violated his
duties in a variety of ways including engaging in
acts of self-dealing with regard to the rentreduced leases and grossly mismanagi ng estate
property. Accordingly, the trial court removed
him from office and appointed the successor as

Moral: The court has the ability to remove
an administrator on its own motion. If the
removed
administrator
appeals,
evidence

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showing an abuse of discretion is needed to set
aside the removal.

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D. Exempt Property

In re Estate ofRhea, 257 S.W.3d 787
(Tex. App.-Fort Worth 2008, no pet. h.).

C. Inventory

After Wife died, Executors removed virtually
all of the personal property from the marital
home including their bed, bedding, towels,
dishes, cooking utensils, the refrigerator, toilet
paper, boxes of tissue, and used bars of soap.
Thereafter, Husband requested the return of some
of the personal property as exempt under Probate
Code§ 271 or $5,000 in lieu thereof under § 273.
The trial court granted Husband's request and
also allowed him to keep Wife's wedding ring for
the rest of his life as part of the exempt property.
Executors appealed stating that Husband could
not get both the allowance and keep the ring as
exempt property.

In re Estate of Walker, 250 S.W.3d 212
(Tex. App.-Dallas 2008, pet. denied).
Originally, Executrix filed an inventory
valuing Testatrix's estate at over $5 million.
Thereafter, Executrix filed an amended inventory
showing the assets of the estate as being only
approximately $180,000 because Testatrix had
placed assets originally shown on the inventory
into an inter vivos trust over a decade prior to her
death. A group of Testatrix's family members
then filed suit under Probate Code § 258 claiming
that the amended inventory was erroneous
asserting that Testatrix's trust was invalid for
failure to identify the trust property and thus the
amended inventory omitted property that was
actually still in Testatrix's probate estate. After
reviewing the evidence, the probate court ru led
that the amended inventory was neither erroneous
nor unjust. The family members appealed.

The appellate court rejected Executor's
argument.
The court explained that if any
exempt property is not found among the
decedent's effects, the trial court is required to .
make a reasonable allowance in lieu thereof not
exceeding $5,000. "In other words, the trial
court must make an allowance for those exempt
items that it cannot set aide because they are not
on hand. If some exempt items are on hand, it
must set those aside for the surviving spouse and
award an allowance in lieu of those exempt items
that are not on band." Rhea at 792.

The appellate court affirmed. First, the court
recognized that there was no Texas case stating
the standard of review the appellate court should
apply when reviewing an appeal of a complaint
under Probate Code § 258. The court analogized
this situation to that of removal of a personal
representative and determining whether a person
is unsuitable to serve as a personal representative.
Accordingly, the court held that the probate
court's order would be reviewed under an abuse
of discretion standard and would be overturned
only if the court acted "in an arbitrary or
unreasonable manner without reference to any
guiding rules or principles." Walker at 214.
Second, the court reviewed the evidence and
detennined that the property description in the
trust was reasonably certain and thus the probate
court did not abuse its discretion.

With regard to the wedding ring, the court
recognized when an estate is solvent as in this
case, the exempt personal property passes to the
rightful heirs or beneficiaries when the
administration terminates. Probate Code § 278.
Thus, the court lacked authority to grant Husband
a life estate in the ring. Husband may retain the
(Note that
ring until the estate is closed.
Husband also claimed ownership to the ring as
community prope1ty but the trial court did not
rule on the ring's ownership. Thus the appellate
court declined to rule on this issue.)

Moral: The appellate court wi ll review an
appeal of a court's finding of the correctness of
an inventory under Probate Code § 258 using the
abuse of discretion standard.

Moral: A court may award both exempt
personal property and, if the value of this
property does not reach the monetary limits, an
allowance in lieu thereof up to $5,000.

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E. Family Allowance

beneficiary of IRA accounts and $85,000 in
income. Nonetheless, the trial court approved a
family allowance of $126,840.

1. Determination of Amount

-

The appel late court held that the trial court's
award was justifiable and not an abuse of
discretion. With regard to the life insurance
proceeds, the court explained that because the
policy was the couple's commun ity property
prior to Deceased Spouse's death, the proceeds
are not to be considered as the Surviving
Spouse's separate property for family allowance
calculation purposes. The court then indicated
that the same logic applied to the IRA benefits
and Survivi ng Spouse's income.

In re Estate ofRhea, 257 S.W.3d 787
(Tex. App.-Fort Worth 2008, no pet. h.).

The lower court granted Husband a family
allowance of $20,000 after Wife's death under
Probate Code § 286. The executors of Wife's
estate appealed claiming that Husband had
separate property sufficient for his own support
and thus was not entitled to a family allowance.

-

The appellate court affirmed. The court
explained that the fami ly allowance is determined
by considering "the whole condition of the estate
during the first year after the spouse's death, the
necessities of the surviving spouse, and the
circumstances to which he or she has been
accustomed." Rhea at 791. In this case, Wife 's
estate was valued at over $800,000 and the
executors had removed virtually all personal
property from the marital home, much of wh ich
was necessary for everyday life such as a bed,
bedding, furniture, dishes, and the refrigerator.
Husband's income was expected to exceed his
expenses by $1,136 per month but this difference
would not be enough to replace the removed
items to bring him back to the circumstances he
had in the year before Wife's death.

Moral: A surviving spouse may successfully
claim a fami ly allowance even if the surviving
spouse actually has sufficient property on hand to
cover one year of maintenance as long as that
property was not the surviving spouse's separate
property prior to the deceased spouse's death.
Note that this result has the effect of sacrificing
the deceased spouse's intent to provide for will
beneficiaries in favor of a surviving spouse who
does not actually need the funds for his or her
maintenance.
F. Specific Performance
Wells v. Dotson, 261 S.W.3d 275 (Tex.
App.-Tyler 2008, no pet. h.).

Moral: The family allowance is available not
just to provide necessities but to provide the
standard of living to which the surviving spouse
was accustomed while both spouses were a live.

-

2. Consideration of Surviving Spouse's Separate
Property

-

Estate of Wolfe, 268 S.W.3d 780 (Tex.
App.-Fort Worth 2008, no pet. h.).

-

Decedent entered into a lease w ith an option
to purchase with Lessee. After Decedent's death,
Lessee notified Executor that he wanted to
exercise the option to purchase. Decedent's heirs
threatened to sue Executor if he deeded the
property to Lessee and thus Lessee sued for
spec ific performance of the option provision of
the contract under Probate Code § 27. The trial
court granted summary judgment in favor of
Lessee.

Surviving Spouse requested a fami ly
allowance of $132,444.
Executor and
Beneficiary objected claiming that she had
sufficient separate property and thus was not
entitled to a family allowance under Probate
Code § 288. They explained that Surviving
Spouse received life insurance proceeds of
almost $300,000 as well as $120,000 as the

-

-

The appellate court reversed.
The court
explained
that
§ 27 applies only "to
circumstances in which a person has sold
property or has entered into a bond or other
written agreement to make title to that property
and dies without having conveyed title." Id. at
280. Because the granting of an option is not the

7

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sale of property or an agreement to sell, Lessee's
c laim for specific performance did not fall w ithin
the purview of§ 27.

The person designated by Testatrix as her
independent executrix probated Testatri x's will
and asked to be appointed as the independent
executrix. The trial court determined that she
was not suitable to serve and appointed another
person. The designated person appealed claiming
that the court erred in disqualifying her because
no motion to disqualify her or opposition to her
appointment was pendin g before the trial court.

Moral: Enforcement of an option contract
after the death of one of the parties is not
available under Probate Code § 27. However,
enforcement of the option contract may be
available on other grounds.

The appellate court affirmed. The court began
its analysis with Probate Code § 78(e) which
a llows the court to disqualify a person from
serving if the court finds that the person is
" unsuitable." The com1 recognized that " [n]o
com prehensive, discrete explanation exists
delineating the attributes which make someone
unsuitable." /d. at 56. T he trial court has broad
discretion to determine whether a person is
unsuitable.

G. Attorney's Fees-- Unsuccessful Attempt to
Probate WiiJ

In re Estate ofHenry, 250 S. W .3d 518
(Tex. App .-Dallas 2008, no pet. h.).

-

-

Proponents attempted to probate Testatrix's
1996 will. They were unsuccessful because the
court decided to admit a will Testatrix executed
in 2004 instead. The probate court awarded
$ 12,000 as necessary and reasonable attorney's
fees under Probate Code § 243 holding that
Proponents presented the will in good faith . The
proponent of the 2004 will appealed.

The court decided that the issue of the named
executrix's qualifications was tried by consent
when testimony on the issue was taken in court
about her qualifications without objection. The
court also recognized that the trial court could
still have disqualified the named executrix even if
an objection had been made because the Probate
Code does not require the filing of a motion or
opposition to disqualify an applicant before the
court can find a person unsuitable.

The appellate court affirmed.
The court
rejected the claim that the award was improper
because Proponents did not timely file their
amended pleading asking for fees and did not
seek leave of court to file an amended pleading.
The court determined that it was nonetheless not
an abuse of discretion for the probate court to
make a fee award under Probate Code § 243 .
Under the facts, there was adequate notice and
opportunity to object to the request for fees.

The court then examined the evidence of the
named executrix's suitabi lity and found that the
evidence was sufficient to support the trial
court's decision. For example, she failed to
probate the will for over three years, she
attempted to get a s ubpoena on behalf of the
estate before she was appointed as the executrix,
she collected and distributed estate propei1y
without authority , and considered the interests of
one beneficiary over the interests of the estate.

Moral: A request for attorney's fees and
costs under Probate Code § 243 should be made
in the original pleadings or as promptly as
possible thereafter to avoid a claim that the
request was untime ly.

H. Independent Administration

Moral: A court may dec ide a named executor
is unsuitable sua sponte.

1. Appointment of Independent Executor

-

-

a. Named Executor Deemed Unsuitable

b. Named Executor Deemed UnsuitableAnother Case

In re Estate ofGaines, 262 S.W.3d 50
(Tex. App.-Houston [141h Dist.] 2008,
no pet. h.).

In re Estate ofBoren, 268 S.W.3d 841
(Tex. App.- Texarkana 2008, pet.

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Bunting does not apply to an independent
administrator.

denied).
The trial court determined that the named
independent executor was unsuitable under
Probate Code § 78(e).
The appellate court
reviewed the evidence and determined that the
court did not abuse its discretion by acting in an
arbitrary or unreasonable manner without
reference to any guiding rules or principles.
There was evidence that the named executor
acted inappropriately when he was serving as the
agent for the testatrix and her husband in a
variety of ways such as using the principal's
property, misappropriating funds, and not paying
bills.

-

Moral: It is possible that Probate Code

§ § 309, 310, and 313 still apply to independent
administrators although they do not apply to
independent executors.
3. Closing by Operation of Law

In re Estate ofTeinert, 251 S.W.3d 66
(Tex. App.-Waco 2008, pet. denied).
Testator died in 1977 and his estate was
handled through an independent administration in
1978. Although the executor paid creditors and
distributed estate assets promptly to the
beneficiaries, he never filed an affidavit to close
the estate under Probate Code § 151. About
thirty years later, a beneficiary petitioned the
court to be appointed as the executor to resolve a
dispute regarding royalty interests held by several
devisees. The court refused his request, closed
the estate under Probate Code § 152, and
recommended that he could seek resolution of
this issue in a separate legal proceeding. The
beneficiary appealed.

Moral: Strong evidence is needed to overturn
a trial court's finding that a named executor is
unsuitable.
2. Creditors

In re Estate ofGaines, 262 S.W.3d 50
111
(Tex. App.-Houston [14 Dist.) 2008,
no pet. h.).
Creditor filed two authenticated unsecured
claims with the Independent Executrix.
Independent Executrix rejected the claims and
the trial court entered orders recognizing the
rejection. Creditor asserts that this was improper.

The appellate court dismissed the appeal. The
court explained that the closing methods of
Probate Code §§ 151 and 152 are not exclusive.
Prior cases have held that final distribution of the
estate after creditors are paid results in the
closing of the estate by operation of law. Thus,
the trial court Jacked jurisdiction to take fu rther
action with regard to Testator's estate.

The appellate court decided that the order was
merely interlocutory and thus the court lacked
jurisdiction to decide the issue. Creditor could
still file suit under Probate Code § 313 within 90
days of the rejection to establish her claims.

-

-

A dissenting judge pointed out that no court
has ever determined that all estate assets were
distributed and thus the conclusion that the estate
was closed as a matter of Jaw was incorrect.

Comment: The significant part of the court's
discussion is found in footnote 11. Jd. at 62. The
court decided that Probate Code § 313 was
applicable even though this was an independent
administration. The court stated that the Texas
Supreme Court case of Bunting v. Pearson, 430
S.W.2d 470, 473 (Tex. 1968), which held that
this section did not apply to an independent
executor nonetheless would apply to an
independent administrator. This distinction is, in
my opinion, highly problematic. The Bunting
court did not make such a distinction and the
court cites no authority for its conclusion that

Moral: Even though not required, it would
be
prudent
to
close
all
independent
administrations by affidavit to avoid the
possibility of renewed estate administration
decades later.

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All properties whether real or personal or
mixed we [the two settlors] now own or
will own in our names individually or in
the name of B & W investments. * * *

V. TRUSTS
A. Creation ofTrust

-

-

We include all real or personal or mixed
properties such as land, buildings, houses,
stock, other securities, insurance policies,
art, coin collections, automobiles, our
companies other personal property with or
without titles except that which we each
maintain separately on our books and
records * * *.

Sarah v. Primarily Primates, Inc., 255
S.W.3d 132 (Tex. App.-San Antonio
2008, pet. denied).
A simian care center and a university entered
into a contract under which the university
transferred to the care center several monkeys
and chimpanzees in exchange for the center's
agreement to provide the animals with lifetime
care.
Considerable litigation regarding the
animals' care ensued with an argument being
made that the contract acted to create a trust
which would then be governed by Property Code
§ 112.037.

Both the probate and appellate courts held that
this was an adequate description of trust property.
The appellate court explained that there was
sufficient testimony by a CPA and attorney that
the precise property referenced by this
description was ascertainable by consulting
property and tax records.

Both the trial and appellate courts agreed that
the contract did not create a trust. The court
studied the contract in connection with Property
Code §§ 11 1.003 (types of trusts covered by
Trust Code) 112.001 (methods of trust creation),
and 112.002 (requirement of trust intent). A
contract which is devoid of trust intent cannot be
transformed into a trust. The contract was replete
with contract language and did not contain trust
language such as " trust," "trustee," or
"beneficiary."
The cou1t recognized that
technical words are not necessary to the creation
of a trust but that nonetheless this contract
reflected no evidence that the original parties
intended to create a trust for the care of the
animals.

Comment: It seems that a better argument
against the validity of trust may have been
whether the settlors had actually conveyed the
property into the trust. Even if the property is
clearly described in the trust instrument, it still
must be conveyed into the trust for the trust to be
effective.
Moral: Trust property needs to be carefully
described in the trust instrument to avoid disputes
over what is and is not included.

B. Spendthrift Provision
In re Townley Bypass Unified Credit
Trust, 252 S.W.3d 715 (Tex. App.Texarkana 2008, pet. denied).

Moral: A court will not turn a contractual
arrangement between parties into a trust just
because there may be a socially valuable reason
in so doing (e.g., to grant non-parties to the
contract standing to enforce).

Settlor's will created a trust for Wife with the
remainder to his two sons upon her death. Before
Wife died, one of the son's died. When Wife
died, the issue arose as to whether the
predeceased son's share would pass to his
successors in interest or to Settlor's heirs via
intestacy . The trust did not expressly require a
son to survive to receive his interest and the trust
contained a standard spendthrift provision.

2. Property Description

In re Estate ofWalker, 250 S.W.3d 212
(Tex. App.-Dallas 2008, pet. denied).

-

An inter vivos trust described trust property
as:

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Both the trial and appellate courts held that
the deceased son's interest passed to his
s uccessors in interest.
The court began its
analysis by examining the remainder interest
granted to each son by the ir father's wilL
Because the interest was in ascertainable persons
and there was no condition precedent other than
the tennination of the prior estate (Wife's death
ending her life estate), then the remainder was
vested.

-

summary judgment that the great-grandchildren
are eligible distributes even though their parent is
still alive.
The appellate court affirmed. The court first
agreed with both sides that the trust instrument
was unambiguous and thus the construction of
the trust is a matter of Jaw. The court then
examined the trust to determine the way in wh ich
Settlor used the word "descendants," that is, did
she use the term ( 1) in its strict legal sense of
issue of a deceased person or (2) in its popular
sense as including the issue of a living person.
Settlor did not include a definition of
"descendants" in the trust instrument so the court
examined all of the provisions of the trust. The
court found it significant that in some provisions
of the trust, Settlor specified whether a
grandchild or descendant needed to be " living" or
" dead." In the provision at issue, Settlor did not
include clarifying language and thus it makes
sense that she used the term "descendants" in its
popular sense.

The court next determined as a matter of first
impression in Texas that the spendthrift clause
did not prevent the predeceased son' s vested
remainder interest from passing under his will
despite the existence of a spendthrift provision
re<>tricting the transfer of the son' s interest prior
to his receiving the property. The court was
impressed with the reasoning of RESTATEMENT
(THIRD) OF TRUSTS § 58, reporter's notes, cmt. g
(2003), which provides that " [a] continuing
income or remainder interest in the trust, despite
the spendthrift prov ision, is transferable by will
or intestacy." Townley, at 720. The court
stressed that a spendthrift provision is designed
" to protect the beneficiary from his or her own
folly, a purpose that cannot be promoted after the
beneficiary's death." Townley, at 721.

Moral: Trust instruments need to be
carefully worded to anticipate as many futu re
scenarios as are reasonably possible to avoid
disputes regarding the settlor's intent.

Moral: A trust should expressly state the
dispos ition of trust property if a remainder
beneficiary predeceases the life beneficiaries.

2. "Descendants" and Adoption

In re Ray Ellison Grandchildren Trust,
261 S.W.3d 111 (Tex. App.-San
Antonio 2008, pet. denied).

C. Construction and Interpretation

Settlor established
a trust
for the
" descendants" of his children. A dispute arose as
to whether descendants included the adopted
children of his son who were adopted after
reaching adu lthood.
The trial and appellate
courts agreed that these individuals were not
within the class of individuals who would qualify
as descendants.

J . "Descendants" Genera lly

-

-

-

-

Paschall v. Bank ofAmerica, NA ., 260
S.W.3d 707 (Tex. App.-Dallas 2008,
no pet. h.).
Settlor authorized Trustee to distribute trust
principal and/or income to her grandchi ldren "or
the descendants of a grandchild."
Trustee
distributed trust property to a grandchild' s
daughters under the belief that the greatgrandchildren are current beneficiaries of the
trust. The grandchild obj ected claiming that
Trustee could make distributions to his daughters
only after he dies.
The trial court granted

The appellate court began its analysis by
holding that "descendants" is not an ambiguous
term and recognizing that it is well established
under Texas law that extrinsic evidence is not
adm issible when a term is unambiguous. The
court also determined that merely because Settlor
listed his descendants at the time he created the

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trust did not act to limit c lass membership to the
listed individuals.

law" and that a court should not " neglect
established precedent and impose [its] own
intent" just because the adopted beneficiaries
appear unworthy. Id at 128. Justice Simmons
recognized that even under the 1975 statute
effective in 1982, adopted adults were considered
children for all purposes.

The court then turned its attention to whether
adopted adults would be considered heirs under
the intestacy statutes as they existed on the date
Settlor executed the trust. The court determined
that although it was not bound by these statutes,
that they provided evidence of the meaning of the
term "descendants." Despite the fact that the
statute provided that an adopted adult is the "son
or daughter of the adoptive parents for all
purposes," the court held that this did not
abrogate the "stranger to the adoption rule"
because it lacked similar language contained in
the statute governing the adoption of minors
which stated that the term " descendant" includes
adopted minors. (Note that this statement is in
direct contravention of a prior ruling of the Texas
Supreme Court in Lehman v. Corpus Christi
Nat 'l Bank, 668 S.W.2d 687 (Tex. 1984).)

-

-

-

Moral: When making gifts to classes such as
"children," "grandchildren," and "descendants,"
settlors and testators should indicate whether
adopted children are included and if adopted
children are included, the age by which they need
to be adopted to be included in the class.
D. Modification

In re Estate ofWebb, 266 S.W.3d 544
(Tex. App. -Fort Wotih 2008, pet.
fil ed).
Will and testamentary trust beneficiaries
reached a settlement with respect to various will
and trust matters. Beneficiaries then sought to
modify the trust under Property Code § 112.054
to bring it into compliance with their settlement.
Trustee objected claiming that he was not a party
to the settlement. The trial court held that
Trustee was not a necessary party to the
modification action and granted Beneficiaries'
motion to strike the Trustee's intervention in the
case.

Comment: The court's opinion is puzzling
and appears to distort the law to reach a decision
which it thinks is " morally" correct. The settlor
used a term , " descendants," which has a wellestablished legal meaning and is, as stated by the
court, "not an ambiguous term." Id at 118.
Accordingly, the adopted children are part of the
class gift.
The court's strained reading of
historical statutes does exactly what the court
states consideration of statutes cannot do, that is,
to "control or defeat" the plain meani ng of the
terms of the trust. Id at 121. However, because
of allegations that the adoptions were done
merely to give the adopted adults standing to
demand an accounting, the court twists the law to
exclude the children. The court should not
rewrite a trust merely because the settlor did not
address the issue of adult adoptions and the court
" thinks" the settlor would have excluded them .
As the court explained, but then did so
nonetheless, "we must not redraft a trust
instrument to vary or add provisions ' under the
guise of construction of the language' of the trust
to reach a presumed intent." !d. at 11 7.

The appellate court reversed. The court
determined that Trustee was a necessary party to
the settlement as well as a necessary party to any
action to modify the trust.
Property Code
§ 115.01 1 provides that the trustee is a necessary
party if the "trustee is serving at the time the
action is filed." The court explained that under
Probate Code § 3 7, title to property vests in the
beneficiary immediately upon a testator's death
unless the will provides otherwise. The testator's
will did not provide otherwise and thus when the
testator died, the trustee, as a beneficiary of the
property albeit it trust, had title to the property.
Thereafter, Trustee accepted the trust and thus he
was serving as a trustee making him a necessary
party to the action. Likewise, because Trustee
was a beneficiary of the will, a family settlement

Dissent: The
well-reasoned
dissenting
opinion of Justice Rebecca Simmons explains
that this case is one w here "bad facts make bad

12

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agreement would not be binding upon him
without his consent.

The appellate court rejected this argument
because the case was not one concerning trusts.
Instead, it involved a matter incident to the
administration of an estate over which it had
The
jurisdiction under Probate Code § 5.
property the trial court ordered to be turned over
to the registry was estate property although the
property could later become trust property.

Moral: A testamentary trustee is a necessary
party to ( 1) family settlement agreements and (2)
actions involving the trust.

E. Jurisdiction

Moral: A county court has jurisdiction over a
decedent's property which is destined for a
testamentary trust even though it would not have
jurisdiction over the trust itself.

l . Generally
In re Ashton, 266 S.W.3d 602 (Tex.
App.- Dallas 2008, no pet. h.).
The trial court awarded relief against a trust.
The appellate court granted mandamus relief
because neither the trust nor the trustee had been
made a party to the action. A suit against a trust
must be brought against the trustee, that is, the
legal representative of the trust. Accordingly, for
a judgment to be rendered against a trust, "its
trustee must be properly before the trial court as a
result of service, acceptance, or waiver of
process, or an appearance.
* * * Stated
differently, for relief to be granted against a trust,
the trust- throu gh its trustee-must be made a
party to the action." Id. at 604. The fact that the
trustee in his individual capacity was party to the
lawsuit did not cure the defect.

3. Statutory Probate Court
In re Guardianship of Gibbs, 253
S.W.3d 866 (Tex. App.- Fort Worth
2008, pet. dism 'd).
A potential remainder beneficiary brought suit
in a statutory probate court on behalf of his
mother for restitution and breach of fiduciary
duty against other beneficiaries. After the court
awarded over $1 million in damages, a
procedural dispute arose over whether the
statutory probate court had jurisdiction to hear
the case. The appellate court found that these
actions did not fall within the scope of the court's
jurisdiction and thus reversed the trial court's
judgment. The court explained that the claims do
not involve or concern a trust but rather the
alleged tortuous conduct of other beneficiaries.

Moral: When seeking relief against a trust,
be certain to join the trustee in its representative
capacity as a party to the actio n.

Note:

2. County Court

court has concurrent jurisdiction w ith the district
court "in all actions by or against a trustee" was
not applicable to this case because this case was
filed many years before the effective date of the
relevant amendment (September 1, 2005).

In re Estate ofGaines, 262 S.W.3d 50
(Tex. App.-Houston [14 111 Dist.) 2008,
no pet. h.).

-

-

The current version of Probate Code

§ 5(e) which provides that the statutory probate

Testatrix's will created a testamentary trust.
The county court ordered a person holding
property which potentially belonged to the trust
to place that property in the registry of the court.
This person appealed claiming that the county
court lacked jurisdiction to issue this order
grants
because Property Code § 115 .001
exclusive jurisdiction to the district court for all
proceedings concerning trusts.

Moral: A plaintiff must make certain that the
court in which an action is brought has
jurisdiction to hear the case.

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-

F. Deviation

G. Attorneys' Fees

-

-

In re Ray Ellison Grandchildren Trust,
261 S.W.3d I ll (Tex. App.-San
Antonio 2008, pet. denied).

Settlers created four irrevocable trusts naming
their five grandchildren as beneficiaries.
Settlers' two children (the parents of the
beneficiaries) were named as the trustees. Over a
decade later, trustees filed a petition to terminate
these trusts claiming that Settlers' intent was
really to provide for them, not their
grandchildren. Thus, deviation from the terms of
the trusts would be appropriate under Trust Code
§ 112.054. One of the settlors testified that he
did not understand the difference between being
a beneficiary and a trustee and thus termination
of the trusts would further the purpose of the
trusts.
Despite the lack of any additional
evidence, the trial court found that a mistake was
made in drafting the trusts and thus terminated
the trusts. The trial court then distributed the
trust assets outright to the two trustees.

-

In re White Intervivos Trusts, 248
S.W.3d 340 (Tex. App.-San Antonio
2007, no pet. h.).

The trial court awarded attorney fees to the
losing parties in a trust interpretation case. The
trustees appealed claiming that the fee award was
inequitable and unjust because the fees incurred
by the losing parties were actually paid up front
by a non-party who would later be reimbursed for
the payment.
The appellate court affirmed the award of fees
under both § 114.065 of the Texas Trust Code
and the Declaratory Judgments Act. The trial
court has the ability to award reasonable and
necessary attorneys' fees "as may seem equitable
and just" and there was no evidence that the trial
court abused its discretion by acting without
reference to guiding rules and principles. The
court explained that the trustees had "no
authority for the proposition that it is unequ itable
or unjust to award attorney's fees to parties who
have had their fees paid up front by another
party, subject to reimbursement." Id. at 127.

The guardian ad litem appealed on behalf of
the three minor grandchildren (the adult
grandchildren did not appeal). The appellate
court reversed with regard to the minor
beneficiaries. The court explained that the trusts
named the grandchildren as beneficiaries and
were expressly stated to be irrevocable. The
settlers'
children
were
clearly
and
unambiguously
named
as
trustees,
not
beneficiaries. The court explained that deviation
from the terms of the trusts was not appropriate
because there was no evidence of "circumstances
not known to or anticipate by the settlor" as
required by the Trust Code. The only evidence
was one trustee's alleged confusion. The court
also noted that no one discovered this supposed
mistake for almost 14 years.

Moral: The fact that attorneys' fees are paid
by a non-party to the case will not prevent the
court from making an award of attorneys'
provided they are reasonable and necessary.

VI. OTHER ESTATE PLANNING
MATTERS
A. Power of Attorney
Citigroup Global Markets, Inc. v.
Brown, 261 S.W.3d 394 (Tex. App.Houston [14111 Dist.] 2008, no pet. h.).
Decedent signed a power of attorney naming
his son as his agent. Agent opened an account
with Brokerage which contained an arbitration
provision.
After
Decedent's
death,
Administrators sued Brokerage.
When
Brokerage moved to compel arbitration,
Administrators claimed that Decedent lacked
capacity at the time he signed the power of
attorney and thus Administrators were not bound

Moral: The court will not order deviation to
terminate an irrevocable trust just because the
settlor has "a change of heart" many years later.

14

COURTHOUSE MORALS AND LEGISLATIVE EXPECTATIONS:

A REVIEW OF RECENT CASES AND PROPOSED LEGISLATION IMPACTING TEXAS ESTATE PLANNERS

-

by the arbitration provision.
agreed.

The trial court

The appellate court granted Brokerage's
request for mandamus relief.
The court
explained that Administrators did not present
evidence to show Decedent lacked capacity at the
time he sjgned the power of attorney . Thus, the
trial court abused its discretion by denying the
motion to compel arbitration.
Moral: A party attempting to show that the
principal lacked capacity at the time the principal
signed a power of attorney must present evidence
to show that the principal did not have capacity.

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15

2009 Legislative Preview
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-

Proposed Changes Affecting
Texas Probate, Guardianship, and Trust Law

William D. Pargaman

Authored By:

Brown McCarroll, L.L.P.
111 Congress Avenue, Suite 1400
Austin, Texas 7870 1-4043
Main: (512) 472-5456 • Fax: (512) 479-1101
Direct: (512) 479-9728 • Fax (512) 226-7328
bpargaman@.mailbmc.com
www.brownmccarroll.com

Based on Prior
Presentations and
Incorporating Significant
Contributions By:

Presented By:

Glenn M. Karisch
The Karisch Law Firm, PLLC
7200 North MoPac Blvd., Suite 300
Austin, Texas 78731
P.O. Box 160457 • Austin, Texas 78716-0457
(512) 328-6346 • Fax (512) 342-7060
kariscll@.texasprobate .com
\ ¥Ww. texasprobate. com
(The Texas Probate Website)

Gerry W. Beyer

-

Gov. Preston E . Smith Regents Professor of Law
Texas Tech University School of Law
Lubbock, TX 79409-0004
(806) 742-3990, ext. 302
gwb({ilProfessorBever.com
www.ProfessorBeyer.com

-

(Updated through March 3, 2009)

-

-

St. Mary's University School of Law 2009 Homecoming CLE
March 27, 2009
© 2009 by William D. Pargaman. All Rights Reserved

WILLIAM D. (BILL) PARGAMAN
Partner
Direct: 512-479-9728

-

Email: bpargaman@mailbmc.com
www. brownmccarroll.com

Legal Experience
Bill Pargaman has been certified by the Texas Board of Legal Specialization as a specialist in Estate Planning and
Probate Law. He is also a Fellow in the American College of Trust and Estate Counsel. Bill's practice involves
the preparation of wills, trusts and other estate planning documents, charitable planning, and estate administration
and alternatives to administration. Additionally, he represents clients in contested litigation involving estates,
trusts and beneficiaries, and tax issues. His practice also includes the organization and maintenance of business
entities such as corporations, partnerships, and limited liability entities.
Education
• Doctor of Jurisprudence, with honors, University of Texas School of Law, 1981, Order of the Coif,
Chancellors
• Bachelor of Arts, Government, with high honors, University of Texas at Austin, 1978, Phi Beta Kappa
Professional Licenses
• Attorney at Law, Texas, 1981
Court Admissions
• United States Tax Court

-

-

Speeches and Publications
Mr. Pargaman has been a speaker or author at numerous seminars, including:
• State Bar of Texas, Advanced Estate Planning and Probate Course, and Advanced Guardianship Law Course
• Real Estate, Probate and Trust Law Section Annual Meeting
• University ofHouston Law Foundation, General Pmctice Institute, and Wills and Probate Institute
• South Texas College of Law, Wills and Probate Institute
• Austin Bar Association, Estate Planning and Probate Section Annual Probate and Estate Planning Seminar
• Austin Bar Association and Austin Young Lawyers Association Legal Malpractice Seminar
• Houston Bar Association Probate, Trusts & Estate Section
• Austin Chapter, Texas Society of Certified Public Accountants, Annual Tax Update
• Texas Bankers Association, Advanced Trust Forum
• Estate Planning Council of Central Texas, Amarillo Area Estate Planning Council, Corpus Christi Estate
Planning Council, East Texas Estate Planning Council, and South Plains Trust & Estate Council
• Austin Association of Life Underwriters
• Austin Chapter, University of Texas Medical Branch (Galveston) Alumni Association
• SAGE Group, University of Texas
Professional Memberships and Activities
• American College of Trust and Estate Counsel, Fellow
• State Bar of Texas
• Real Estate, Probate and Trust Law Section, Member
• Real Estate, Probate, and Trust Law Council, Member, 2004- 2008
• Legislative - Probate Committee, Member, 2000- Present (Co-Chair, 2008- Present)
• Trust Code Conunittee, Member, 2000-Present (Chair, 2004-2008)
• Uniform Trust Code Study Project, Articles 7- 9 & UPIA, Subcommittee Member, 2000-2003
• Probate Code Codification Committee, Legislative Liaison Subcommittee Member, 2007- Present
• Texas Board of Legal Specialization (Estate Planning and Probate Law), Examiner, 1995-1997

William D. Pargaman

-




Estate Planning Council of Central Texas, Member (President, 1991-1992)
Austin Bar Association (formerly Travis County Bar Association), Member
• Estate Planning and Probate Section, Member (Chair, 1992-1993, Board Member, 1997-1999)

Honors
• Listed in The Best Lawyers in America®
• Listed in Texas Super Lawyers (Texas Monthly)
• Listed in The Best Lawyers in Austin (Austin Monthly)
Community Involvement
• St. Stephen 's Episcopal School Professional Advisory Council, Member
• City of Austin, XERISCAPE Advisory Board, Past Member
• Volunteer Guardianship Program of Family Eldercare, Inc. of Austin, Past Member, Advisory Board

-

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iv

Glenn M. Karisch
The Karisch Law Firm, PLLC
7200 North MoPac Blvd., Suite 300 • Austin, Texas 78731
Mailing Address: P.O. Box 160457 • Austin, Texas 78716-0457
(512) 328-6346 • Fax (512) 342-7060
karisch@texasprobate. com
www. texas probate.com

Education
The University ofTexas School of Law, Austin, Texas
Juris Doctor with Honors, 1980
The University ofTexas at Austin, Austin, Texas
Bachelor of Journalism with Highest Honors, 1977

Professional Experience
The Karisch Law Firm, PLLC, Austin, Texas, 2008 - Present
Barnes & Karisch, P.C. , Austin, Texas, 1998 - 2007
Ikard & Golden, P .C., Austin, Texas, 1992 - 8
Hoffman & Stephens, P .C., Austin, Texas, 1991 -2
The Texas Methodist Foundation, Austin, Texas, Vice President and General Counsel, 1989- 1991
Coats, Yale, Holm & Lee, Houston, Texas, 1980 - 1989

Professional Activities
Board Certified, Estate Planning and Probate Law, Texas Board of Legal Specialization
American College ofTrust and Estate Counsel (Fellow)
Real Estate, Probate and Trust Law Council, State Bar of Texas
Chair, 2007 - 8; Chair-Elect, 2006 - 7; Treasurer, 2005- 6; Council Member, 1999 - 2003;
Chair, Guardianship Law Committee, 1999- 2000; Chair, Trust Code Committee, 2000- 4;
Chair, Probate Legislation Committee, 2003 - Present (Co-Chair Beginning 2008).
Chair, Estate Planning and Probate Section, Austin Bar Association, 1996 - 7

Partial List of Legal Articles and Papers
Author and Editor, Texas Probate Web Site [texasprobate.com] and email mailing list [probate@io.corn]
(1995- Present) .
"UPIA Handbook," The Texas Probate Website [texasprobate.corn] (2003 - 4).
"Multi-Party Accounts and Other Non-Probate Assets in Texas," University of Texas School of Law
Intermediate Estate Planning, Guardianship and Elder Law Conference (2000), updated through 2008 on
the Texas Probate Web Site [texasprobate.com].
"Modifying and Terminating Irrevocable Trusts," State Bar of Texas Advanced Estate Planning and
Probate Law Course (1999), updated through 2008 on The Texas Probate Web Site [texasprobate.com].
"Protecting the Surviving Spouse," State Bar of Texas Advanced Estate Planning and Probate Law
Course (2006), updated through 2008 on The Texas Probate Web Site [texasprobate.com].
"Court-Created Trusts in Texas," State Bar of Texas Advanced Drafting: Estate Planning and Probate
Law Course (1995), updated through 2008 on The Texas Probate Web Site [texasprobate.com].

-

Legislative Updates, 1999 -2007, The Texas Probate Web Site [texasprobate.com].

v

GERRY W. BEYER
Governor Preston E. Smith Regents Professor of Law
Texas Tech University School of Law
Lubbock, TX 79409-0004
(806) 742-3990, ext. 302
gwbla{ProfessorBeyer.com
www .ProfessorBeyer.com
EDUCATION

-

B.A, Smruna Cum Laude, Eastern Michigan University (1976)
J.D., Summa Cum Laude, Ohio State University (1979)
LL.M., University of Illinois (1983)
.!.S.D., University of Illinois (1990)

PROFESSIONAL ACTIVITIES
Bar memberships: United States Supreme Court, Texas, Ohio (inactive status), Illinois (inactive status)
Member: The American College of Trust and Estate Counsel (Academic Fellow); American Bar Foundation; Texas Bar
Foundation; American Bar Association; Texas State Bar Association

CAREER IDSTORY
Private Practice, Columbus, Ohio (1980)
Instructor of Law, University of Illinois (1980-81)
Professor, St Mary's University School of Law (1981-2005)
Visiting Professor. Boston College Law School (1992-93)
Visiting Professor. University of New Mexico School of Law (1995)
Visiting Professor. Southern Methodist University School of Law (1997)
Visiting Professor. Santa Clara University School of Law (1999-2000)
Governor Preston E. Smith Regent's Professor of Law, Texas Tech University School of Law (2005 - present)
Classes taught include Estate Planning, Wills & Estates, Trusts, Property, U.C.C.

SELECTED HONORS AND ACTIVITIES

....

Order of the Coif
Hispanic Law Students Association and Black Law Students Association Professor of the Year Awards (2008)
President's Excellence in Teaching Award (Texas Tech University) (2007)
0utstanding Professor Award- Phi Alpha Delta (Texas Tech University Chapter) (2007) (2006) Professor of the Year - Phi Delta
Phi (StMary's University chapter) (2005)
Student Bar Association Professor of the Year Award - StMary's University (200 1-2002) (2002-2003)
Russell W. Galloway Professor of the Year Award - Santa Clara University (2000)
Outstanding Faculty Member - Delta Theta Phi (St Mary's University chapter) (1989)
Distinguished Faculty Award- StMary's University Alumni Association (1988)
Outstanding Professor Award - Phi Delta Phi (St Mary's University chapter) (1988)
Most Outstanding Tilird Year Class Professor - StMary's University (1982)
State Bar College- Member since 1986
Keeping Current Probate Editor, Probate and Property magazine (1992-present)

SELECTED PUBLICATIONS
-

Author and co-author of nwnerous law review articles, books, and book supplements including WILLS, TRUSTS, AND
ESTATES: EXAMPLES AND EXPLANATIONS (4th ed. 2007); TEACHING MATERIALS ON ESTATE PLANNING (3'd ed. 2005); 9 & 10
TEXAS LAW OF WILLS (Texas Practice 2002); TEXAS WILLS AND ESTATES: CASES AND MATERIALS (5th ed. 2006); TEXAS WILL
MANUAL SERVICE; 12, 12A, & 12B WEST'S TEXAS FORMS - ADMINISTRATION OF DECEDENTS' ESTATES AND GUARDJANSHIPS
(1996); 19-19A WEST'S LEGAL FORMS - REAL ESTATE TRANSACTIONS (2002); Pet Animals: What Happens When Their Humans
Die, 40 SANTA CLARA L. REv. 617 (2000); Estate Plans: The Durable Power ofAttorney Fpr Property Management, 59 TEX. B.J.
314 (1996); Estate Plans: Enhancing Estate Plans with Multiple-Party Accounts, 57 TEX. B.J. 360 (1994); Enhancing SelfDetermination Through Guardian Selj-Declaralion, 23 IND. L. REv. 71 (1990); Statutory Will Methodologies - Incorporated
r orms vs. Fill-in Forms: Rivalry or Peaceful Co-Existence?, 94 DICK. L. REv. 23 1 (1990); Ante-Mortem Probate: A Viable
Alternative, 43 ARK. L. REv. 131 (1990); The Will Execution Ceremony- History, Sign!ficance, and Strategies, 29 S. TEX. L.
REv. 413 (1988); Videotaping the Will Execution Ceremony- Preventing Frustration of Testator's Final Wishes, 15 ST. MARY's
L.J. I (1983).
vii

2009 Legislative Preview

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P roposed Changes Affecting Texas Probate, Guardianship, and Trust Law
© 2009 By William D . Parga1nan, All Rights Reserved.

Table of Contents

....

2009 Legislative Preview .......................... ..... ........ ........ .... .. ........ .... .... .............. ........ ..... ............ ........... I

1.

Introduction and Acknowledgments ...... .. ..... ...... ................... ...................... ... .. ............... l

2.

The Players ....... ................ ... .. ... ... ......... ............ .. ...... ..... ...................... .. .... ..... ........ ....... 2
2.1.
REPTL .. .................................... .................. ......... ................ ............... .............. 2
2.2.
The Academy ... .... ........ .. ... .. .. ................. ... .. ...................... ................................. 2
2.3.
The Statutory Probate Judges ... ................ .......... ....... .. ....................................... 2
2.4.
TBA .. ............... ........... .......... .. .. .... .......... ........ .... .... .......... .. .............................. 2
2.5.
The Texas Legislative Council. .... ................. .. ................................................. .. 2
2.6.
The Authors and Sponsors .. ................ ....... ... ..... ....... .. ............ .. .... .. .......... .. ....... 2

3.

The Process .............................................. ..................... .... ....... ........ .. .......... .... .. ............ 3
3.1.
The Genesis of REPTL's Package ............................................. .. ..................... .. 3
Preliminary Approval by the REPTL Council... ..................... .... ........ .. .............. . 3
3.2.
3.3.
Actual Language is Drafted by the Committees, With Council Input and
Approval ................... .. ........ ...... .... ............................... ....... .................. ............. 3
3.4.
REPTL's Package is Submitted to the Bar ... ....... .......... .. ...... .. .... .. ..... .. ....... ........ 3
3.5.
Legislative Policy Committee Review .................... ........... .. ........... .......... .......... 3
State Bar Board of Directors Approval. .... ... ...... .. .......... .................... .. .... ...... ..... 3
3.6.
3.7.
REPTL is Ready to Go ................. ............. .. ...... .. ............ ................................... 3
3.8.
The Academy Steps ln...... .. .. ............... ......... .. .. ... ... ........... .. ..... ....... ........... .. ..... 3
3.9.
During the Session ................. .. ........... .... ........................................................... 3
3.10. Where You Can Find Information About Filed Bills .. ..................................... .... 4
3.11. Summary of the Legislative Process ... .. .. ........................... ....... ......................... . 4

4.

Key Dates .... .......................... .. .................... ...... .......... ... .. .......... ... ..... ... ... ................ .. .... 4

5.

The Big 'Un- Probate Code Recodification ..................... .... ............................... ....... .... 4
5.1.
A New Begi1ming ......................................... ....................... .. ....... ................ ..... 4
5.2.
Our Current Probate Code is Not a "Code" ........... .................................. ............ 4
5.3.
The "Codification" Process Began in 1963, After Our Probate Code Was
Enacted ... ....... ............. .......... .. .... .... ... ................ .. .... .. ................. .... ... .......... .. .... 5
5.4.
The Legislative Council's Procedure ...... .. ....................... ... .. .. ...... .. .. ......... ......... 5
5.5.
The "Estates and Guardianship Code." ........... ....... .......... .. .... ........ .... .. ........ ....... 5
5.6.
REPTL's Probate Codification Committee... .................. ...... .. ....... ..................... 5
5.7.
The " Substantive" Recodification ............ ........ .. ........... ....... ............................... 6
5.8.
Online Review of the Recodification Drafts ........ .. .. ............ ... .. .............. .. ........ .. 6
5.9.
Jurisdiction and Venue ...................... .... .................................................... .. ...... . 6
5.10. Independent Administration ....... ... ....... ................ ... ... ................... ...... ..... .... .. .... 7
5.11. Changes Awaiting the 2011 Session .......... .......... ... .............................. ....... ....... 7
5.12. Effective Date ofthe New Estates and Guardianship Code ........ .. ................. ..... . 8

6.

Changes Affecting Decedents' Estates ....... .......... ....................................... .. ........... ....... 8
6.1.
Repeal of Section 70 - Provision in Will for Management of Separate
Property ... .......... ........ ....................................................... .................. ...... ....... .. 8

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2009 Legislative Preview
Prooosed Changes Affecting Texas Probate. Guardianship. and Trust Law

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6.2.
6.2.1.
6.3.
6.4.
6.5.
6.6.
6.7.

-

6.8.

"One-Step" Procedure for Will Execution ............................... ................ ... .. ...... 8
No Contest Provisions in Wills ........... .................. .............................................. 8
Reference to Prior Divorce in Probate Application ....................... .. ... ................. 8
Notice to Beneficiaries? Never Mind ..................................... .... ...... .................. 8
Timing of Section 149B Distribution Petitions ........................ ........................... 8
Sealing Inventories .. ... .................. .... .. ..................... ....... ......... .. .................. ... ... 9
Liabilities of Personal Representatives and Remedies for Breach of
Fiduciary Duty........ .. ...... ....... .. ........ ............... .... ..... ..... .. ... ... .... .... .. .. .. ...... ... ...... 9
Regulation ofHeir Finders . .......... ............ .. ........................................................ 9

7.

Changes Affecting Guardianships ...... ............ ....... ...... .. ............... .. ........ .. ..... .......... ... ..... 9
7.1.
More Frequent Periodic Compensation of Guardians and Tmstees ..................... 9
7.2.
Additional Compensation for Guardians ofthe Person ......... ...... .. ............ ..... .... .. 9
7.3.
Compensation for Attorneys Serving as Guardians ................................ .. .. ......... 9
7.4.
Compensation of Attorneys Seeking to Establish Management Trusts ................ 9
7.5.
Payment of Attorney's Fees of Guardianship Applicant.. .................... ................ 9
"One-Step" Procedure for Guardianship Declaration Execution .......... .. ........ .. .... 9
7.6.
7.7.
Appointment of DADS as Guardian ....... .. .............. ................................... .. ....... 9
7.8.
Examination Requirements of Persons With Mental Retardation ................. ..... 10
7.9.
Notification of Exemption of Trusts from Liability for Support ................ .. ...... 10
7.10. Criminal History Background Checks for "Professional" Guardians ....... .......... 10

8.

Changes Affecting Trusts ................... .. ........ ............................ .. ... ............. ............ ...... 10
8.1.
Trustee' s Power to Make Non-HEMS Distributions to Himself ....................... 10
8.2.
Protecting Directed Trustees . .................................... .......... .. ................ ..... .. .... 10
8.3.
Attorneys ad Litem Under the Trust Code ........................................................ 10
8.4.
Distributions from IRAs and Other Retirement Plans to Marital Trusts ............. 10
8.5.
Effect of Divorce on Revocable Trusts ............................................................. 10
8.6.
Trustee Named as Beneficiary in Insurance Policy . .............. .. ...... .. ... ............... 11
8. 7.
Persons Who May Disclaim Interests in Trusts ................................................. 11
8.8.
RAP Modification ................................................. ...................... .. ... ................ 11
8.8.1. No Contest Provisions in Trusts . .......................................... ........ ...... ..... ......... 11

9.

Changes to Jurisdiction and Venue . ...................... .. ...................................... ............. ... 11
9.1.
Civil Practice and Remedies Code Section 15.007 ......... .. .... .. .... .. ..................... 11
9.2.
Gonzalez v. Reliant Energy, Inc ....................................................................... 11
9.3.
2007 Legislative Proposal. ... ................. .. ................................... ................... ... 12
9.4.
2009 Legislative Proposal. ............................................ ................................... 12
9.5.
Senate Jurisprudence Committee Interim Report ............. ................................. 12
9.6.
Proper Venue Required . ................................................... .. .............................. 12

10.

Changes Affecting Charitable Trusts or Organizations . ........... .... ........ .. ... ...... .. ...... ....... 12
10.1. Restriction on Relocation of Charitable Trusts .... .. ........ .. .................................. 12
10.2. Attorney General Participation in Breach of Fiduciary Duty Claims
Involving Charitable Trusts ................................. ............................................. 12
10.3. Charitable Gift A1muities ............................. ...... ........................ ...... .............. .. 12

11.

Court Administration .. .. .. .. ........ ..................... .. ... .. ..................... .. ....... .. ........................ 13
11.1. References to Court's "Minutes." .... .. ......... .. .... ...... ..... .. ..... .. ........ ... .. ......... .. ... 13
11.2. Replacement of Recused Statutory Probate Judges ......... .......... ........................ 13
11.3. Eligibility of Fonner Statutory Probate Judges for Assignment... ..... .......... ....... 13
11.4. Supplemental Longevity Pay for Statutory Probate Judges ............................... 13
11.5. Proceedings in Absence of Statutory Probate Judge . .... .............................. ....... 13

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X

2009 Legislative Preview
Pro!?Osed Changes Affectin g Texas Probate Guardianship. and Trust Law

11.6.

Sealing Records Containing Identifying Financial Information .......... ....... ........ 13

Nontestamentary Transfers ....... ... ................. .... ... .............. .... ... ... ....... ......... .. .. .... ......... 13
12.1. Convenience Accounts . ........... ........ .... .. ......................... .. .................. .. .... ........ 13

13.

Disability Documents .... ... ........... ..... ..................................... .... .. .. ...... .. ...... ..... ............ 13
13.1. Power of Attorney for Child........... ...... .. .... .. ..... .................. .. .... .. .... ...... .... ....... 13
13.2. Attorney' s Fees in Actions to Revoke Medical Powers of Attorney .... .............. 13
13.3. Revised Uniform Anatomical Gift Act. .. ......... ............. .................................... 14

14.

Changes Affecting Marital Property ........ .. .......... .. .. .. ..................................... .... ........... l 4
14.1. Replacement of Statutory Economic Contribution Formula with
Equitable Remedy ...... ...... ........ ... .. ... .... ...... ....... ......... ....... .............. .. ............... 14
14.2. Permissive Claim for Reimbursement ....................... ......... .............. .. .. .. .......... 14
14.3. Expansion of Reimbursement Criteria ......................... .. .................... ........ .. ..... 14
14.4. Measure ofReimbursement .................... ................ ... ... ........... .. ........... ............ 14
14.5. Equitable Principles; Offsets ......... .. .. ........ .. ... .. ... .. ... ... .............. ....................... 14

15.

Not So Fast, My Friends ... ........... ...... .... .............. ... ................ ..................... .... ........... 15
15.1. Trust Decanting ....... ........ ... ... ..... ... .. .. ...... ............... ....................... ..... .. ........... 15
15.2. Revocable Trust Provisions . ..................... .. ...... ................................. .. ...... ... .... 15
15.3. Uniform Power of Attorney Act. ......................................................... ............. 15
15.4. Anti-Jarboe Amendment? ... ........................................................ .. ....... ............ 15

16.

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12.

Conclusion ... .. .. ...... .. .. ..... ... ............. ........ ........ ..... ... ... .............. .. .... ....... ............ ........... 15

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Texas Academy of Probate and Trust L awyers Membership Application/2009 Dues Notice ........... 17

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XI

2009 Legislative Preview
Proposed Changes Affecting
Texas Probate, Guardianship, and Trust Law

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© 2009 By William D. Parga.man, All Rights Reserved.
The Texas Legislature began its 81 s• Regular Session
on January 13, 2009. The session ends June I , 2009.
This paper presents a summary of the bills the
authors expect will be filed relating to probate (i.e.,
decedents' estates), guardianship, and trust law.
References to "REPTL" are to the Real Estate,
Probate and Trust Law Section of the State Bar of
References to "TBA" are to the
Texas.
Trust/Financial Services Division of the Texas
Bankers Association.

1.

Introduction and Acknowledgments.

A lot of effort goes into the legislative process. In
the best of circumstances, this effort is manifested
by passing quality legislation and defeating poor
legislation. Of course, each session some shoddy
things slip throug h and other deserving things fail to
pass. The reader can judge if the 2009 batch will be
worth the effort.

-

-

-

-

A lot of the effort in the 2009 session, as in past
sessions, will come from REPTL. REPTL, with its
approximately 7,000 members, has been active in
proposing legislation in this area for more than 25
years. During the past two years, its Council,
headed by Glenn Karisch of Austin (Immediate Past
Chair) and Harry Wolff of San Antonio (ChairElect), and its legislative committees and their
respective chairs (Mary Burdette of Dallas (Past
Chair) and Jim Woo of San Antonio (Current Chair)
Linda Goehrs
of Houston
Probate,
Guardianships, and Bill Pargaman of Austin (Past
Chair) and Shannon Guthrie of Dallas (Current
Chair) - Trusts), worked hard to come up with a
package which addresses the needs of its members
and the public, and continue to work hard to get the
package enacted into Jaw. Austin lawyer Barbara
Klitch provides invaluable serv1
ce tracking
legislation for REPTL.
REPTL is helped along the way by the State Bar, its
Board of Directors, and its excellent staff (in

particular, KaLyn Laney, the head of the Bar's
Legislation Department).
REPTL works closely with the Texas Academy of
Probate and Trust Lawyers (AI Golden of Austin,
Chair, Tom Featherston of Waco, Treasurer, and
Clint Hackney, Lobbyist). The Academy is a group
of attomeys who are board certified in Estate
Planning and Probate Law and/or are members of
the American College of Trust and Estate Counsel
(ACTEC) who go the extra mile and help support
quality legislation in this area . Attomeys who are
eligible for membership but who are not yet
members should consider supporting this fine
organization.
Other groups have an interest in legislation in this
area, and REPTL tries to work with them to mutual
advantage. These include the statutory probate
judges (Judge Guy Herman of Austin, Presiding
Statutory Probate Judge) and the Wealth
Management and Trust Division of the Texas
Bankers Association (Leslie Amann of Houston,
Chair-Elect,
and
Deborah Cox
of Dallas,
Govemmental Relations Chair, and John Brigance,
Executive Director).
Last, and of course not least, are the Legislators and
In recent sessions,
their capable staffs.
Rep. Will Hartnett of Dallas, Chair of the House
Judiciary Committee, and Senator JeffWentworth of
San Antonio, Chair of the Senate Committee on
Jurisprudence, together with their staffs, have been
particularly helpful and have worked particularly
hard on legislation in this area. We anticipate their
Senator Wentworth has been
continued help.
renamed chair of the Senate Committee on
Jurisprudence, While Rep. Hartnett is still on the
new House Committee on Judiciary & Civil
Jurisprudence (which consolidates the old Judiciary
and Civil Practices Committees), the new chair is
Rep. Todd Hunter of Corpus Christi, with
Rep. Bryan Hughes of Mineola as vice chair.

Page 2

2009 Legislative Preview- Proposed Changes Affecting Texas P1·obate, Guardianshi]J. and Tmst Law

T hanks go to all of these persons and the many
others who have helped in the past and will
continue to do so in the future.
2.

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The Playcrs. 1

The dramatis personae in our legislative drama are
many and varied:
2.1. REPTL. ''REPTL" refers to the Real Estate,
Probate and Trust Law Section of the State Bar
of Texas, acting through its Council. Many
volunteer Section members who are not on the
Council give much of their time, energy and
intellect in formulating
REPTL-carried
legislation. REPTL is not allowed to sponsor
legislation or oppose legislation without the
approval of the Board of Directors of the State
Bar.
There is no provision to support
legislation offered by someone other than
REPTL, and the ability of REPTL to react
during the legislative session is hampered by
the necessity for Bar approval. REPTL has
received permission to carry its proposals
discussed in this paper in the 2009 session:
Non-REPTL proposals are identified as such.
2.2. The Academy. Tlus phrase refers to the Texas
Academy of Probate and Trust Lawyers, a nonprofit § 50l(c)(6) organization composed of
dues-paying members who are either Board
Certified in Estate Planning and Probate Law or
Fellows of the American College of Trust and
Estate Counsel (or both). Unfettered by Bar
control, the Academy can react to legislation,
negotiate compromises, or oppose or support
legislation. One of its primary missions is to
support REPTL legislation and legislation
approved by the REPTL Council which does
not have State Bar approval for one reason or
another. The Academy has hired a lobbyist for
many sessions, Clint Hackney, who has worked
very hard, and has been a major contributor to
the Academy's success. The authors wear hats
representing both REPTL and the Academy,
and Glenn Karisch is the principal volunteer in
the legislative process.
An Academy
membership application is attached at the
end of this paper for those eligible and
interested.
1

-

-

The "Players" and the "Process" excerpts are
adapted, updated, and expanded from a 1993 Legislative
Update prepared by Alvin J. Golden with his pennission

2.3. The Statutory Probate Judges. The Texas
Statutory Probate Judges hear the vast majority
of probate and guardianship cases. Judge
Guy Herman of the Probate Court No. 1 of
Travis County (Austin) is the Presiding
Statutory Probate Judge and has been very
active in promoting legislative solutions to
problems in our area for many years.
2.4. TBA. The Wealth Management and Trust
Division of the Texas Bankers Association
("TBA") represents the interests of corporate
fiduciaries in Texas. While the interests of
REPTL and TBA do not always coincide, the
two groups have had an excellent working
relationship during the past several sessions.
2.5. The Texas Legislative CounciL Among other
duties, the Texas Legislative Council provides
bill drafting and research services to the Texas
All
Legislature and legislative agencies.
proposed legislation must be reviewed (and
usually revised) by the Legislative Council
before a Representative or Senator may
introduce it.
In addition, as part of its
continuing statutory revision progran1, the
Legislative Council has embarked on, and is the
primary drafter of, a nonsubstantive revision of
the Texas Probate Code (discussed below). The
portions of the Probate Code proposed for
nonsubstantive revision by the 8 l st Legislature
are under the direction of Maria Breitschopf of
the Legislative Council's legal staff. Questions,
comments, or suggestions relating to the project
may be directed to Ms. Breitschopf at P.O. Box
12128, Austin, Texas 787ll, or at telephone
number (512) 463-1155.
2.6. The Authors and Sponsors. All legislation
needs an author, the Representative or Senator
who introduces the legislation. A sponsor is the
person who introduces a bill from the other
house in the house of which he or she is a
member. Many bills have authors in both
houses originally, but either the House or
Senate version will eventually be voted out if it
is to become law; and so, for example, the
Senate author of a bill may become the sponsor
of a companion House bill when it reaches the
Senate. In any event, the sponsor or author
controls the bill and its fate in their respective
house. Without the dedication of the various
authors and sponsors, much of the legislative
success of this session would not have been

2009 Legislative Preview- Proposed Changes Affecting Texas Probate, GuardianshiJ>. and Trust Law

possible. The unsung heroes are the staffs of
the legislators, who make sure that the bill does
not get off track.

-

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3.

Page 3

that legislation with the State Bar's "seal of
approval" will be relatively uncontroversial and
will further the State Bar's goal of promoting
the interests of justice.

The Process.

3.1. The Genesis of REPTL's Package. REPTL
begins work on its legislative package shortly
after the previous legislative session ends. In
August or September of odd-numbered years,
the chairs of the main REPTL legislative
committees (Decedent's Estates, Guardianship,
and Trust Code) put together lists of proposals
for discussion by their committees. These
items are usually gathered from a variety of
sources. They may be ideas that REPTL
council or committee members come up with
on their own, or they may be suggestions from
practitioners around the state, accountants, law
professors, legislators, judges - you name it.
Most suggestions usually receive at least some
review at the committee level.

3.2. Preliminary Approval by the REPTL CounciL
The full REPTL council reviews each
committee's suggestions and gives preliminary
approval (or rejection) to those proposals at its
Fall meeting (usually in September or October)
in odd-numbered years. Draft language may or
may not be available for review at this stage this step really involves a review of concepts,
not language.

3.3. Actual Language is Drafted by the
Committees, With Council Input and
Approval. Following the Fall council meeting,
the actual drafting process usually begins by the
committees. Proposals may undergo several
redrafts as they are reviewed by the full council
at subsequent meetings. By the Spring meeting
of the council in even-numbered years (usually
in April), language is close to being final, so
that final approval by the council at its annual
meeting held in conjunction with the State
Bar' s Annual Meeting is mostly pro forma.
Note that items may be added to or removed
from the legislative package at any time during
this process as issues arise.
3.4. REPTL 's Package is Submitted to the Bar. In
order to obtain permission to "sponsor"
legislation, the entire REPTL package is
submitted to the other substantive law sections
of the State Bar for review and comment in
early July. This procedure is designed to assure

3.5. Legislative Policy
Committee
Review.
Following a comment period (and sometimes
revisions in response to comments received),
REPTL representatives appear before the State
Bar's Legislative Policy Committee in August
to explain and seek approval for REPTL's
legislative package.
3.6. State Bar Board of Directors Approval.
Assuming
REPTL's
package
receives
preliminary approval from the State Bar's
Legislative Policy Committee, it is submitted to
the full Board of Directors of the State Bar for
approval in September. At times, REPTL may
not receive approval of portions of its package.
In these cases, REPTL usually works to satisfy
any concerns raised, and then seeks approval
from the full Board of Directors through an
appeal process.
3.7. REPTL is Ready to Go. After REPTL receives
approval from the State Bar's Board of
Directors to carry its package, it then meets
with appropriate Representatives and Senators
to obtain sponsors, who submit the legislation
to the Legislative Council for review, revision,
and drafting in bill form. REPTL's legislation
is usually filed (in several different bills) in the
early days of the sessions that begin in January
of odd-numbered years.
3.8. The Academy Steps In. While there are
procedures for expedited consideration of
additional proposals that do not meet the State
Bar's deadlines described above, REPTL rarely,
if ever, uses those procedures. For items that
may come up relatively late in the gan1e, or for
items that may be considered inappropriate for
the REPTL package, the Academy may step in
and work for approval of legislation
3.9. During the Session. During the legislative
session, the work of REPTL and the Academy
is not merely limited to working for passage of
their respective bills. An equally important part
of their roles is monitoring bills introduced by
others and working with their sponsors to
improve those bills, or, where appropriate, to
oppose them.

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Page 4

3.10. Where You Can Find Information About
Filed Bills. You can find information about
any of the bills mentioned in this paper,
including text, lists of witnesses and analyses
(if available), and actions on the bill, at the
Texas
Legislature
Online
website:
www.legis.state.tx.us. You can even perform
your own searches for legislation based on your
selected search criteria.

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2009 Legislative Preview - Proposed Changes Affecting Texas Probate, Guardianship. and T1-ust Law

3.11.

Summary of the Legislative Process.
Watching the process is like being on a roller
coaster; one minute a bill is sailing along, and
the next it is in dire trouble. The real work is
done in committees, and the same legislation
must ultimately pass both houses. Thus, even if
an identical bill is passed by the Senate as a
Senate bill and by the House as a House bill, it
cannot be sent to the Governor until either the
House has passed the Senate bill or vice-versa.
At any point in the process, members can and
often do put on amendments which require
additional steps and additional shuttling. It is
always a race against time, and it is much
easier to kill legislation than to pass it.

4.

Key Dates.



Tuesday, May 26, 2009 (!34th day)- Last day
for house to consider most senate bills and joint
resolutions on second reading



Wednesday, May 27, 2009 (!35th day)- Last
day for house to consider most senate bills or
joint resolutions on third reading
Last day for senate to consider any bills or joint
resolutions on third reading



Friday, May 29, 2009 (!37th day)- Last day
for house to consider senate amendments
Last day for senate committees to report all bills



Sunday, May 31, 2009 (139th day)- Last day
for house to adopt conference committee reports
Last day for senate to concur in house
amendments or adopt conference committee
reports



Monday, June 1, 2009 (1401h day) - Last day of
81 st Regular Session; corrections only in house
and senate



Sunday, June 21, 2009 (20th day following
final adjournment) - Last day governor can sign
or veto bills passed during the previous
legislative session



Monday, August 31, 2009 (91st day following
final adjournment) - Date that bills without
specific effective dates (that could not be
effective immediately) become law

Key dates for the enactment of bills in the 2009
legislative session include:



Monday, November 10, 2008 - Prefiling of
legislation for the 8lst Legislature begins



Tuesday, January 13, 2009 (1st day) - 8lst
Legislature convenes at noon



Friday, March 13, 2009 (60th day)- Deadline
for filing most bills and joint resolutions

-



Monday, May 11, 2009 (I 19th day) - Last day
for house committees to report house bills and
joint resolutions

-



Thursday, May 14, 2009 (1 22nd day) - Last
day for house to consider nonlocal house bills
and joint resolutions on second reading

5.



-

Friday, May 15, 2009 (123rd day) - Last day
for house to consider uonlocal house bills and
joint resolutions on third reading



Saturday, May 23, 2009 (13lst day)- Last day
for house committees to report senate bills and
joint resolutions

The Big 'Un- Probate Code Recodification.

5.1. A New Beginning.

January 1, 2014 . Less
than five years from now. That's a date you,ll
need to remember if you're still practicing in
our area. It is the proposed effective date of our
new Estates and Guardianship Code, which will
replace our current Probate Code. Here's the
story ....

5.2. Our Current Probate Code is Not a "Code".
Texas has had a number of statutory
compilations during its history. In 1925, the
39th Legislature adopted its fourth bulk revision
of Texas laws, the Revised Statutes of Texas.
2
In 1936, The Vernon Law Book
1925.

2

The

source

of

this

"titneline"

http-//ww'.v lrl state tx us/research/texasLawTimeline.btml.

-

is

2009 Legislative Preview- Proposed Changes Affecting Texas Probate. Guardianship. and Trust Law

-

Company
published
an
unannotated
compilation of the 1925 Revised Civil and
Criminal Statutes, updated with changes
through January 1, 1936. Between 1936 and
1948, this was updated with non-cumulative
bie1mial supplements.
In 1948, a new
compilation was published, and biennial
updates continued. The 'Texas Probate Code"
was first enacted in 1955, effective January 1,
1956. However, Texas had not yet adopted any
organized system of statutory codification at the
time, so the Texas Probate Code was
incorporated into Vernon' s Revised Civil
Statutes, known as the "Black Statutes" for
those of us old enough to have practiced with
the hard copies of these volumes.

5.3. The "Codification" Process Began in 1963,
After Our Probate Code Was Enacted. In the

-

-

-

38 years since the 1925 general revision of
Texas laws, the statutes had become confusin~
and difficult to use.
In 1963, the 58t
Legislature passed S.B. 367, which ordered the
creation of a permanent, ongoing statutory
rev1s1on program.
The Texas Legislative
Council was charged with making a complete,
non-substantive revision of Texas statutes.
Legislation enacting new code sections is
generally based on a Revisor's Report which
contains the proposed language of the new
code, the language of the old statutes, and brief
notes. When the program is complete, all
general and permanent statutes will be included
in one of 27 codes. The Probate Code is not a
"code" for purposes of the Code Construction
Act and the Legislative Council codification
initiative since ( 1) it was enacted before the
codification effort began, and (2) it does not
comply with the organizational and stylistic
(The
principles of modem Texas codes.
Criminal Procedure Code is the only other
remaining "uncodified" code. The Probate
Code just happened to draw the short straw in
2006.)
5.4. The Legislative Council's Procedure. The
Texas Legislative Council's nonsubstantive
revision process involves reclassifying and
rearranging the statutes in a more logical order,
employing a numbering system and format that
will accommodate future expansion of the law,
eliminating repealed, invalid, duplicative, and
other ineffective provisions, and improving the
draftsmanship of the law if practicable- all

Page 5

toward promoting the stated purpose of making
tl1e statutes "more accessible, understandable,
and usable" without altering the sense,
meaning, or effect of the law. The Legislative
Council staff encourages examination and
review of all proposed code chapters by any
interested person. The staff attempts to include
in the proposed code all source law assigned to
the code and to ensure that no substantive
change has been made in the law. A complete
and adequate outside review is necessary,
however.

5.5. The

"Estates

and

Guardianship

Code."

Legislative Council has chosen the "Estates and
Guardianship Code" as the new name for the
recodified Probate Code

5.6. REPTL's Probate Codification Committee.
When REPTL learned in the summer of 2006
that the Legislative Council was going to codify
the Probate Code, it began to work actively
with the Legislative Council staff on the
codification project. It established a Probate
Code Codification Committee, which is cochaired by Professor Thomas M. Featherston,
Jr., the Mills Cox Professor of Law at Baylor
Law School, and by Barbara McComas
Anderson, a Dallas attorney, both of whom are
former REPTL chairs. Through a series of
meetings with Legislative Council staff, it was
decided that:
1. REPTL and the Legislative Council would
cooperate in determining how the new code
would be organized.
2. The Legislative Council would take the lead
in drafting the new code, although REPTL 's
committee would work on some of the thorniest
prov1s1ons, like jurisdiction, venue, and
independent administration, where it was
considered difficult or impossible to codify the
current statutes without some tweaking.
3. The chapters of the code governing
decedents' estates would be drafted first, with a
goal of submitting these chapters to the
Legislature for adoption in 2009 .
4. The remaining chapters of the code,
proviSIOns
governing
including
those
guardianships and powers of attorney, would be
drafted after the 2009 session, with a goal of

Page6

2009 Legislative Preview Proposed Changes Affecting Texas Probate, Guardianship. and Trust Law

submitting these chapters to the Legislature for
adoption in 2011.
5. The new code would become effective after
the 2011 session. (But see Section 5. 10.)

-

6. REPTL would assist the Legislative Council
during the entire legislative process, including
providing expert review of chapters as they are
drafted and expert testimony about legislation
before the Legislature.

5.7. The

"Substantive"
Recodification.
Lisa Jamieson of Fort Worth chairs the
subcommittee dealing with jurisdiction and
venue, while Stephanie Donaho of Houston
chairs
the
independent
administration
subcommittee.

5.8. Online Review of the Recodification Drafts.
Legislative Council has posted its current drafts
of the "nonsubstantive" recodified portions of
the Estates and Guardianship Code at
http://www.tlc.state.tx.us/Jegal/estatescode/estat ·
cs proposcd.html.
REPTL's drafts of the
proposed "substantive" recodification language
will be available when the bills containing those
portions are filed.

-

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5.9. Jurisdiction and Venue. The jurisdiction and
venue provisions are being revised with the
goal of making them more streamlined and
easier to understand. However, because of the
different courts in Texas that have original
probate jurisdiction based on which county you
find yourself in, there is a limit to how much
streamlining can be achieved.
5.9.1. "Probate Proceedings." The term "probate
proceedings" is used to define the matters that
must be brought in a court exercising original
In addition to the
probate jurisdiction.
jurisdiction of a court to exercise original
probate jurisdiction over "probate proceedings,"
the provisions set out each court's power to
hear matters "related to a probate proceeding. "
If a matter is merely "related to a probate
proceeding, " then it need not be brought in the
court exercising original probate jurisdiction
unless that court is a statutory probate court.
All matters "related to a probate proceeding"
must be brought in a statutory probate court
unless the statutory probate court has
concurrent jurisdiction with the district court on
a matter related to a probate proceeding.

5.9.2. Types of Courts The types of courts
exercising original probate jurisdiction will not
change. However, the probate jurisdiction of
county courts at law is expanded to include the
of
interpretation
and
administration
testamentary trusts if the will creating the trust
was admitted to probate in that court.
5.9.3. Contested Matters The provisions outlining
the transfer of contested matters from a court
with original probate jurisdiction arc being
modified slightly with the hope of alleviating
some of the jurisdictional traps that have been
associated with these transfer statutes.
Transfer to District Court If a contested matter
is transferred from a county court to a district
court, any matter related to the probate
proceeding may also be brought in the .district
court proceeding. The district court, on Its own
motion or the motion of any party, may
determine that the new matter is not contested
and transfer the new matter back to the county
court that had original jurisdiction of the probate
proceeding. In addition, jurisdiction for any
other contested matters filed after the transfer of
a contested matter to district court will be in the
same district court.
Assignment of Statutory Probate Judge. If a
contested matter in assigned to a statutory
probate judge, then any other contested matters
filed after the assignment must be assigned to a
statutory probate judge.
Transfer to County Court at Law. In those
counties where there is a county court at law
exerclSlng original probate jurisdiction, a
contested matter must be transferred to that
county court at law on motion of any party. In
addition, the judge of the county court, on his or
her own motion or on the motion of any party,
may transfer the entire proceeding to the county
court at law. If only the contested portion of the
proceeding is transferred to the county court at
law it may be returned to the county court for
further pro~eedings once resolved.
5.9.4.Statutory Probate Courts A new provision
grants statutory probate courts concurrent
jurisdiction with district courts over certain
matters involving tmsts and powers of attorney,
and certain matters involving a personal
representative in personal injury lawsuits.

2009 Legislative Preview - Proposed Changes Affecting Texas Probate, Guardianship. and Trust Law

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5.9.5. Transfer Powers The Section SB transfer
power of statutory probate courts is preserved,
with the limitation that venue for actions by or
against a personal representative for personal
injury, death or property damage related to the
personal injury or death must be determined
under Section 15.007 of the Civil Practice and
Remedies Code. This change is designed to help
clarify that the statutory probate court still has its
transfer powers as previously found in Section
SB except in the limited situations where the
Probate Code provides that venue is govemed by
the Civil Practice and Remedies Code.

5.9.6. Venue The venue provisions have not been

-

materially changed, but they have been
consolidated into a single section to make them
easier to locate. This includes venue for heirship
proceedings which was previously located in the
heirship provisions.

5.1 0.

Independent
Administration.
The
independent administration changes attempt to
bring some further substantive clarification to
three areas of independent administration:

l. Specifying the authority of an independent
executor or administrator to sell assets in the
absence of an express grant in the will;
2. Detailing the procedures for presenting and
dealing with creditors' claims; and

-

3. Providing a simpler procedure for filing a
notice that an independent administration has
"closed" without the need for a full accounting of
all receipts and disbursements.

5.10.1.
Independent Administration by
Agreement Provisions are added allowing

-

parents of minor children and trustees to
consent to independent administration by
agreement where no conflict exists.

5.10.2.

-

-

-

Power of Sale by Consent In
administrations without a will, or where a will
fails to expressly grant a power of sale, an
independent administrator may be granted a
power of sale over real property in the order of
appointment if the beneficiaries who would
receive the real property consent to the power.

5.10.3.

Secured Claims Secured creditors
electing matured, secured status must file a
notice in the official records of the county in

Page 7

which the real property securing the
indebtedness is located. Those creditors must
obtain court approval or the administrator's
consent to exercise any foreclosure rights.
Secured creditors electing preferred debt and
lien status may not exercise any nonjudicial
foreclosure rights during the first six months of
the administration.

5.10.4.
Method of Presenting Claims and
Notices Creditors must present their claims or
respond to notices (i) in a written instrument
that is hand-delivered or sent by certified mail,
in either case with proof of receipt, to the
administrator or the administrator' s attomey;
(ii) in a pleading filed in a lawsuit with respect
to the claim; or (iii) in a v,rritten instrument or
pleading filed in the court in which the
administration is pending.

5.10.5.

Statute of Limitations The ruill1ing
of the statute of limitations is tolled only by
(i) a written approval of a claim signed by the
administrator, (ii) a pleading filed in a suit
pending at the time of the decedent's death, or
(iii) a suit brought by the creditor against the
administrator. The mere presentment of a claim
or notice does not toll the running of the statute
of limitations.

5.10.6.

Other Claims Procedures Other
claims procedures generally do not apply.
Specifically, a claim is not barred merely
because a creditor fails to file suit within ninety
days following the rejection of a claim.

5.10.7.

Notice of Closing Estate
In
addition to existing procedures for closing
independent administrations, an administrator
may elect to close
an
independent
administration by filing an affidavit stating that
all known debts have been paid, or have been
paid to the extent the assets of the estate will
permit; that all remaining assets have been
distributed; and the names and addresses of the
distributees. Once the administration is closed,
third parties may deal directly with the
distributees.

5.10.8.

Closing Not Required
A new
provision explicitly recognizes that independent
administrations are not required to be closed

5.11.

Changes Awaiting the 2011 Session. This
session' s proposals will not include revisions to

Page 8

2009 Legislative Preview Proposed Changes Affecting Texas Probate, Guardianship. and Trust Law

the entire Probate Code. Revisions to the
guardianship
provlSlons
and
other
miscellaneous portions of the Probate Code will
have to wait for the 2011 legislative session.

5.12. Effective Date of the New Estates and
Guardianship Code. While only a portion of
the Probate Code will be recodified in the 2009
session, for simplicity's sake, REPTL pushed
for a single effective date for the entire
recodification effort. l11erefore, the effective
date would have to await the end of the 20 ll
session. However, Legislative Council felt it
important that all recodified portions of the
Probate Code be enacted with a cushion of at
least one session following enactment but prior
to effectiveness. This would provide enough
time to review the enactments and correct any
errors or omissions in a subsequent legislative
session prior to anything becoming effective.
In order to provide that one-session cushion for
the portions to be enacted in the 2011 session,
the effective date of the newly recodified
Estates and Guardianship Code (with whatever
new name is chosen for it) would have to be
delayed until after the 2013 session. And since
it appears to make more sense to have any new
rules apply on a calendar year basis, it is the
authors' current understanding that the new
Estates and Guardianship Code will have an
effective date of January 1, 2014. However,
some of the substantive independent
administration changes may have an earlier
effective date
perhaps as early as
September 1, 2009.

-

6.

Changes Affecting Decedents' Estates.

The REPTL 2009 legislative package is relatively
modest, given the resources being devoted to the
recodification project. There are only two relatively
minor proposals affecting decedents' estates.

-

6.1. Repeal of Section 70 - Provision in Will for
Management ofSeparate Property. Section 70
allows a testator to include a provision in his or
her will giving the surviving spouse the power
to keep testator's separate property together
until each of the beneficiaries becomes an adult,
using the same provisions applicable to the
management of community property. Since this
provision is rarely (if ever) used, REPTL
proposes repealing it. This repeal is also
contained in H.B. 1968 filed by Rep. Hartnett.

6.2. "One-Step" Procedure for Will Execution.
Ever find yourself trying to explain to your
clients why it's necessary fo r them and the
witnesses to sign the will twice? Ever consider
the procedure archaic?
Well REPTL has
something just fo r you - a handy, dandy
revision to Section 59 that allows an optional
method of simultaneously executing, attesting,
and making a will self-proved, so that everyone
signs just once. For those of you who think this
is just too radical a departure from current law,
rest assured that the Unifonn Probate Code has
contained an optional one-step method for
years. Further, if that still doesn't make you
feel better, the tried-and-true two-step method
will remain available.

6.2.1. No

Contest Provisions in
Wills.
Rep. Hartnett has filed H.B. 1969 which makes
no contest provisions unenforceable if probable
cause exists for commencing the contest and the
contest was brought in good faith .

6.3. Reference to Prior Divorce in Probate
Application. Rep. Paxton has filed H.B. 1460
and H.B. 1461, that revise the required contents
of applications to probate wills to state whether
the decedent was ever divorced after the
execution of the will .

6.4. Notice to Beneficiaries?

Never Mind.
Senator Wentworth, who introduced the
legislation in the last session expanding the
notice to beneficiaries from charitable
organization to all beneficiaries, has filed
S.B. 319 which would repeal the existing
Section 128A notice requirements and enact a
new Section l 28C which appears to be identical
to the old notice-to-charities provision.

6.5. Timing of Section 149B Distribution Petitions.
Rep. Hartnett has filed H.B. 1968 which,
among other things, would allow the filing of a
petition to distribute an estate subject to
independent administration two years from the
date letters testamentary or of administration
are first issued. (The current statute is tied to
the date an independent administration was
created and the order appointing the
independent executor was entered. This lead to
confusion regarding when a petition could be
filed in a case where a subsequent independent
executor or administrator was appointed.)

2009 Legislative Preview

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Proposed Changes Affecting Texas Probate. Guardianship. and Trust Law

6.6. Sealing Inventories. Senator Hegar has filed
S.B. 559 which would allow inventories to be
sealed in independent administrations and
require a court order for inspection.

6.7. Liabilities of Personal Representatives and
Remedies for Breach of Fiduciary Duty.
Rep. Hartnett has filed H.B. 1968 which,
among other things, outlines the damages
resulting from a breach of fiduciary duty by a
personal representative, including losses
incurred by the estate, profit made by the
personal representative, profit that would have
accrued to the estate but for the breach,
exemplary damages, and costs and fees (new
Probate Code Section 236). Tllis appears to be
based
primarily
on
Trust
Code
Section 114.00l(c). H.B.1968 also outlines a
dozen remedies available bor breach of
fiduciary
duty
(new
Probate
Code
Section 236A). The latter appears to be based
primarily on new Trust Code Section 114.008,
added in 2005.

-

6.8. Regulation
of
Heir
Finders.
Senator Wentworth has filed S.B. 1243 which
provides for the regulation of "heir finders" by
the Texas Private Security Board.
7.

Changes Affecting Guardianships.

The REPTL guardianship package deals mostly with
compensation issues.

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7.1. More Frequent Periodic Compensation of
Guardians and Trustees. Sections 665 and 868
would be revised to allow the court to authorize
guardians and trustees of management trusts to
receive estimated commissions on a quarterly
basis, rather than having to await the approval
of the annual account. The court will still retain
the power to review and approve the total
commission upon review of the account,
including the power to require the guardian or
trustee to refund commissions should it tum out
that the estimated quarterly payments exceeded
the commissions finally allowed.
7.2. Additional Compensation for Guardians of the
Person. In situations where most of the ward's
assets are managed in a trust, it may be
unreasonable to limit the compensation of the
guardian of the person to five percent of the
income received and five percent of the
expenses paid by the guardian of the estate. A

Page 9

further revision to Section 665 would allow the
court to exceed this limit in appropriate
circumstances.

7 .3. Compensation for Attorneys Serving as
Guardians.
New Section 665D places
restrictions on the attorney's fees charged by
attorneys who are also serving as guardians.
Their invoices must include a detailed
description of the services performed, and they
are only entitled for attorney's fees for legal
services. They may not receive attorney's fees
for services as guardian that are not legal
services. (A similar proposal was introduced,
but did not pass, in the 2007 session. Although
it was not a REPTL proposal, its substance has
been incorporated into the REPTL package for
2009.)
7.4. Compensation of Attorneys Seeking to
Establish Management Trusts. Section 665B
is clarified to allow awarding attorney's fees to
attorneys representing a person seeking to
create a management trust under Section 867.

7.5. Payment of Attorney's Fees of Guardianship
Applicant Rep. Naishtat has filed H.B. 587
that allows a probate court to authorize the
payment of reasonable and necessary
attorney's fees incurred by the applicant for
creation of a guardianship. Payment from the
county treasury may be authorized if the court
satisfies itself that the attorney is not being paid
from some other source.
7 .6. "One-Step" Procedure for Guardianship
Declaration Execution. The same optional
one-step method for will execution described
above will also be made available to
declarations of guardians for minor children
(Section 677A) and for the declarant (Section
679).

7.7. Appointment

of DADS as Guardian.
Senator Harris has prefiled S.B. 271 which
would allow a court to appoint the Department
of Aging and Disability Services as guardian in
certain limited circumstances where there is no
one else available to serve.
Because
appointment of DADS under this provision is
allowed without DADS making the application
for guardianship, total statewide appointments
under this provision are limited to 55 per year,
distributed roughly equally among DADS'
regions in the state.

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Proposed Changes Affecting Texas Probate, Guardianship. and Tmst Law

7 .8. Examination Requirements of Persons With
Mental Retardation. Rep . Naishtat has filed
H.B. 889 which would add certain additional
examination requirements when a guardianship
is sought for persons with mental retardation.
(This appears similar to H.B. 1708 filed in
2007 .)

7.9. Notification of Exemption of Trusts from
Liability for Support. Senator Van de Putte has
filed S.B. 584 which would require notification
to a patient of a mental health or resident care
facility of the exemption of certain tmsts from
the liability to pay for support. (This appears
similar to S.B. 973 filed in 2007 .)

7.10. Criminal History Background Checks for
"Professional" Guardians. Senator Uresti has

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filed S.B. 1053 and 1055--57, all of which deal
with criminal history background checks for
"professional"
guardians
(and
certain
elimination of duplicate checks). Rep. Naishtat
has filed H.B. 2047-50 as identical companion
bills.

restrictions, but would be applicable only to
tmsts that became irrevocable following its
enactment.
8.2. Protecting Directed Trustees. TBA and others
have expressed concerns that our current
Section 114.003 does not contain a bright-line
test for when a trustee may follow (without
liability) the directions of a third party who is
given a power to direct the tmstee's actions in
the trust agreement. At TBA's request, REPTL
has
included
proposed
changes
to
Section 114.003 designed to clarify when
trustees have to listen to, and when they have a
duty to ignore, a the person holding a power to
direct the trustee's actions. The proposal also
acknowledges the current law that the person
holding the power to direct is presumptively a
fiduciary, but since this presumption implies
that the settlor may modify or eliminate that
fiduciary status, clarifies that a settlor may not
use a power to direct to avoid the mandatory
provisions of Section 111. 0035.

8.3. Attorneys ad Litem Under the Trust Code.
8.

Changes Affecting Trusts.

The REPTL Tmst Code package is also much more
modest than the past three sessions.

8.1. Trustee's Power to Make Non-HEMS
Distributions to Himself. Trusts may give

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tmstees the power to make distributions to the
beneficiaries in the tmstees' sole discretion,
without any standard, or in accordance with a
standard that is not "ascertainable." This rarely
causes problems unless the tmstee, herself, is
This may result in
also a beneficiary.
unintended estate tax and creditor problems for
the trustee-beneficiary. A well-drafted tmst
would contain a savings provision cutting back
on the tmstee 's power to make distributions to
herself, limited those distributions to health,
education, support, and maintenance. New
Section I 13.029 would add a statutory savings
provision to correct poorly-drafted tmsts that
would protect trustee-beneficiaries from
attorneys who accidentally give them an
unascertainable power to distribute to
themselves for, e.g., comfort, benefit, welfare,
or well-being.
The proposal does not
completely suspend a distribution power; it
carves it back to permissible limits. The
provision would require language expressly
referring to the new statute to "opt out" of its

Section 11 5.014 is amended to add express
statutory authorization for the appointment of
attorneys ad litem in Tmst Code proceedings,
and to provide for compensation of them and
guardians ad litem.

8.4. Distributions from IRAs and Other Retirement
Plans to Marital Trusts. Section 116.172 is
amended to incorporate the current proposed
response of the American College of Tmst and
Estate Counsel to objections raised by the
Internal Revenue Service (in Rev. Rul. 200626) that our current default statute may not
contain an effective marital deduction savings
clause for IRA's and qualified retirement plans
payable to a trust designed to qualify for a
QTIP marital deduction election.

8.5. Effect of Divorce on Revocable Trusts.
Amendments to Probate Code Sections 4 71,
472, and 473 would conforn1 these provisions
relating to revocable trusts to the similar
changes relating to wills in Section 69 of the
Probate Code made in the last legislative
session. They revoke provisions in favor of the
former spouse's relatives following dissolution
of a marriage, and add references to a
declaration that a marriage is void (in addition
to divorce and annulment) .

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2009 Legislative Preview- Proposed Changes Affecting Texas Probate. Guardianshi!). and Trust Law

8.6. Trustee Named as Beneficiary in Insurance
Policy. Section 1104.021 of the Insurance
Code contains a reference to a trust that
"designates a beneficiary" of a life insurance
policy. This proposal changes the reference to
a trust that "is designated as a beneficiary" of a
life insurance policy.
8.7. Persons Who May Disclaim Interests in
Trusts. This minor change to Trust Code
Section 112.0 I 0 would add a reference to
independent administrators, in addition to
independent executors, as persons who may
disclaim an interest in a trust. (While the latter
is defined to include the former in the Probate
Code, there is no such definition in the Trust
Code.)
8.8. RAP Modification. Rep. Hartnett has filed
H.B. 990, a TBA proposal that modifies the
Rule Against Perpetuities found in Trust Code
Section 112.036 to provide a flat 200-year
perpetuities period, rather than the traditional
" lives-in-being plus 21 years" test. TBA's
position is that "(t]he current statute, adapted
from English feudal law, is antiquated, hard to
interpret by fiduciaries and estate planners and
contrary to modem estate planning desires of
Texas citizens.
Life expectancies have
increased dramatically and Texas citizens who
wish to provide for future generations are
forced to take advantage of estate planning
services in a growing number of other states
(23) where this rule already has been updated.
This modest clarification and enhancement will
assist fiduciaries and estate planners with a
greater definition of terms and will benefit
Texas citizens by enabling them to understand
in plain English their access to estate planning
options." The REPTL council believes that
there is no consensus either way among REPTL
members, so REPTL has taken no position on
this proposal.

8.8.1. No Contest Provisions in
Trusts.
Rep. Hartnett has filed H.B. 1969 which makes
no contest provisions unenforceable if probable
cause exists for commencing the contest and the
contest was brought in good faith.
9.

Changes to Jurisdiction and Venue.

Since 1983, statutory probate courts have had the
power to transfer cases filed elsewhere that are
appertaining or incident to an estate pending in that

Page 11

court for trial and disposition. One of the reasons for
authorizing the courts to make such a transfer is to
permit these courts to resolve issues upon which the
prompt and efficient administration of an estate
depends . However, this transfer authority has
generated some controversy and accusations of
forum shopping due to the occasional transfer of
personal injury or wrongful death cases by a
statutory probate court to itself where the
appropriateness of the new venue was considered
questionable.

9.1. Civil Practice
and Remedies
Code
Section 15.007. In 1995, the legislature added
Section 15.007 to the Texas Civil Practice and
Remedies Code, effective for cases fi led on or
after August 28, 1995. This venue statute,
entitled Conflict With Certain Provisions,
provides :
15.004,
Notwithstanding
Sections
15.005, and 15.031, to the extent that
venue under this chapter for a suit by or
against an executor, administrator, or
guardian as such, for personal injury,
death, or property damage conflicts with
venue provisions under the Texas
Probate Code, this chapter controls.
(emphasis supplied)
This was part of then-Governor Bush' s first tort
reform push. The intent seems clear: follow the
normal venue rules in personal injury, death, or
property damage cases, rather than the Probate
Code ' s
"by
or
against a personal
representative" rule. However, this statute was
not interpreted in this manner by statutory
probate courts, due to the statute's reference to
"venue" provisions under the Probate Code.
For the most part, statutory probate judges
insisted that Sections 5A, 5B, 607, and 608
were jurisdictional statutes, not venue statutes.
Therefore, they argued, Civil Practice and
Remedies Code Section 15.007 didn't control
those jurisdictional statutes.
9.2. Gonzalez v. R eliant Energy, Inc.. On March
11 , 2005, in the midst of the 2005 session, the
Texas Supreme Court decided the Gonzalez v.
Reliant Energy, Inc., case (159 S.W.3d 615
(2005)). This case involved a wrongful death
action brought in the Hidalgo County statutory
probate court, where the estate administration
was pending, rather than in Harris or Fort Bend

Page 12

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2009 Legislative Preview

Proposed Changes Affecting Texas Probate, Guardianship, and Trust Law

Counties, where venue would otherwise lie.
The Texas Supreme Court acknowledged that
the estate administration was properly brought
in the Hidalgo County statutory probate court,
and that the same court had jurisdiction over the
\x.rrongful death and survival action. However
the provision granting the statutory probat~
court jurisdiction did not confer venue. The
Supreme Court disagreed, holding that
Section 15.007 of the Civil Practice and
Remedies Code prohibits such a transfer when
there is a timely objection.
9.3. 2007 Legislative ProposaL
The Supreme
Court's decision in Gonzalez v. Reliant Energy
led to concerns among some practitioners that
appropriate property damage claims, such as
theft by an executor or guardian, would not be
transferable under a strict reading of
Section 15.007, since its reference to property
damage claims was not expressly limited to
those arising out of wrongful death and
H. B. 660 was
personal injury claims.
introduced in the 2007 session to address this
concern and to clarify that for matters not
specifically covered by the trump statute, a
statutory probate court may transfer causes of
action appertaining or incident to an estate or
guardianship without concern for venue. The
proposal would have amended Section 15.007
of the Civil Practice and Remedies Code by
limiting the actions concerning property
damage to which that section applied to
property damage related to a personal injury or
death suit. While H. B. 660 passed in the
House, its companion bill, S. B. 392, failed to
emerge from the Senate Jurisprudence
Committee.
9.4. !009 Legislative Proposal. The 2009 proposal
1s substantively similar to the 2007 proposal. In
addition to the amendment to Section 15.007, it
amends Sections 5B and 608 to specifically
except out cases to which Section 15.007
applies. It also adds new Sections 7 and 610A
to the Probate Code that would have the effect
of empowering a statutory probate court to
transfer any case that was not cover ed by
Section 15.007.

9.5. Senate Jurisprudence Committee Interim
Report. In December, the Senate Jurisprudence
Committee issued an interim report. This issue
The
Committee's
was
discussed.

recommendation is that in order to exercise a
transfer power, the statutory probate court must
have at least permissive venue of the transferred
cause of action.
9.6. Proper Venue Required. Perhaps in response
to the interim report, Senator Hinojosa has filed
S.B. 1267, which requ ires a statutory probate
court to have mandatory or property venue of
an action to exercise its transfer power under
Sections 5B or 608 .
10. Changes Affecting Charitable Trusts or
Organizations.

Restriction on Relocation of Charitable
Trusts. Senator Shapleigh has filed S.B. 666
add new Trust Code
which
would
Section 113.029, restricting the ability of a
tmstee of a charitable tmst to relocate the
administration of the trust or the trust assets
without the settlor' s consent. Otherwise, "if the
trustee determines that the municipality or
county in which the trust is administered or the
trust property is situated must be changed to
prevent the charitable purposes of the trust from
being frustrated," the trustee must initiate a
procedure involving the Attorney General's
office that may result in a judicial proceeding.

10.1.

Attorney General Participation in Breach
of Fiduciary Duty Claims Involving
Charitable Trusts. Senator Harris has filed
S.B. 917 and S.B. 918. The former would
incorporate the definition of "charitable tmst"
from Property Code Section 123.001 into
Probate Code Section 5(e)'s reference to a
statutory probate court's jurisdiction over an
action involving a charitable trust The latter
would clarify that the venue is in Travis County
for a proceeding brought by the Attorney
General's office against a charity for breach of
fiduciary duty.
(Current Property Code
Section 123.005 only refers to actions against a
fiduciary or managerial agent of a charitable
tmst, not the charity itself.)

10.2.

10.3. Charitable Gift Annuities. Rep. Eiland has
filed H .B. 1857 which sets forth requirements
an organization must meet prior to issuing its
first charitable gift annuity. Senator Ellis has
filed S.B. 961 which authorizes the Department
of Insurance to investigate whether a charitable
organization issuing a charitable gift rumuity

2009 Legislative Preview- PrO!losed Changes Affecting Texas Pt·obate. Guardianship. and Trust Law

meets the criteria required by Section I 02.002
of the Insurance Code.

11. Court Administration

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11.1. References
to
Court's
"Minutes."
Rep. Naishtat has introduced H.B. 585 that
changes numerous references in the Probate
Code to the court's minutes to references to the
judge's probate or guardianship docket.

11.2. Replacement of Recused Statutory Probate

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Judges. In recent years, there has been some
disagreement relating to the procedure to be
followed when a motion to recuse a statutory
probate judge is filed. It now appears clear that
the presiding judge of the administrative region
in which the statutory probate court is located
appoints the judge to hear the recusal motion.
However, despite that clarification, it remains
unclear who appoints the replacement judge if
the recusal motion is granted. H.B. 763, filed
by Rep. Hartnett, makes clear that in the event
the judge of a statutory probate court recuses
himself or herself, or a motion to recuse that
judge is granted, the presiding judge of the
statutory
probate
courts
(currently
Judge Guy Herman of Travis Cow1ty) fills the
vacancy. On the other hand, S.B. 683, filed by
Senator Wentworth, takes the exact opposite
approach and provides that the presiding judge
of the administrative region in which the
statutory probate court is located, and not the
presiding judge of the statutory probate courts,
fills the vacancy. Stay tuned ....

11.3. Eligibility of Former Statutory Probate
Judges for Assignment. Rep. Hartnett has filed
H.B. 764 and Senator Wentworth has filed
S.B. 477 which are identical bills disqualiying
former statutory probate judges from
assigrunents if they were publicly reprimanded
or censured by the State Commission on
Judicial Conduct, or left office while an
investigation by that office was pending.
11.4. Supplemental Longevity Pay for Statutory
Probate Judges.
Rep. Hartnett has filed
H.B. 765 which requires counties to pay
statutory probate judges the same supplemental
longiveity pay that district judges are entitled to
receive.

11.5. Proceedings m Absence of Statutory
Probate Judge.

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Rep. Hartnett has filed

Page 13

H.B. 1809 which allows statutory probate
judges to hear matters pending in another
statutory probate court in the same county in
the absence of the judge of the latter court (so
long as another judge has not been assigned by
the presiding judge of the statutory probate
courts).

11.6. Sealing Records Containing Identifying
Financial Information. Rep. Rios Ybarra has
filed H.B. 2132 which allows a person to file a
motion to seal any court record containing the
movant's tax identification number or
information that can be used to access a
financial account of the movant.
12. Nontestamentary Transfers.
12.1. Convenience Accounts. The Independent
Bankers Association of Texas (" IBAT") may
introduce a proposal that appears to allow an
account holder to require the financial
institution to offer a "convenience account"
where the convenience signer acquires no
ownership of the account either during the
primary account holder's lifetime or upon
death. (It is the authors' experience that many
financial
institutions
reqmre
multiparty
accounts to contain rights of survivorship.)
13. Disability Documents.
13.1. Power
of
Attorney
for
Child.
Rep. Villarreal has filed H.B. 804 that wou ld
add a provision to the Family Code allowing a
parent to give a third party authority to make
decisions regarding the medical care and
In addition,
education of the child.
Rep. Herrero has filed H.B. 1940 that would
allow a parent to give a third party authority to
make decisions regarding a child if the other
parent is unwilling or unable to execute the
power or make decisions regarding the care of
the child.
13.2. Attorney's Fees in Actions to Revoke
Medical Powers of Attorney. Health & Safety
Code Section 166.165 authorizes certain
persons to bring an action to revoke a medical
power of attomey on grounds of incapacity or
undue influence at the time of execution.
Rep. Howard has filed H.B. 1455 that would
authorize awarding attorney' s fees and costs to
the prevailing party, and other relief such as

Page 14

2009 Legislative Preview - Proposed Changes Affecting Texas Probate, Guardianship. and Trust Law

added health care costs during
"unwarranted" delay in revocation.

any

13.3.

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Revised Uniform Anatomical Gift AcL
Rep. Zerwas has filed H.B. 2027 which adopts
the Revised Uniform Anatomical Gift Act as
new chapter 692A of the Health and Safety
Code. (Yes, we know this is not technically a
"disability document," but we think it fits best
here in the outline.)

effort of a spouse by a business entity under the
control and direction of that spouse. Additional
criteria that may be considered would include:


the reduction of the principal amount of a
debt secured by a lien on property owned
before marriage, to the extent the debt
existed at the time of marriage;



the reduction of the principal amount of a
debt secured by a lien on property received
by a spouse by gift, devise, or descent
during a manage, to the extent the debt
existed at the time the property was
received;



the reduction of the principal amount of that
part of a debt, including a home equity loan,
incurred during a marriage secured by a lien
on property and incurred for the acquisition
of, or for capital improvements to, property



the reduction of the principal amount ofthat
part of a debt incurred during a marriage
secured by alien on property owned by a
spouse for which the creditor agreed to look
for repayment solely to the separate marital
estate of the spouse on whose property the
lien attached, and incurred for tl1e
acquisition of, or for capital improvements
to, the property;



the refinancing of a principal amount to the
extent the refinancing reduces that principal
amount; and



capital improvements to property other than
by incurring debt.

14. Changes Affecting Marital Property.

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Tite Family Law Sections proposes a repeal of the
economic contribution provisions currently found at
Family Code Section 3.401, et seq. Near the end of
the 1999 legislative session, statutes were enacted
designed to replace the case law regarding
"equitable claims for reimbursement" with a
statutory rule recognizing an "equitable interest."
1l1e statutes created as many problems as they
solved. A joint committee comprised of family law
practitioners and probate lawyers worked on
revisions adopted in 2001 and amended in 2003.
However, after a number of years of working under
this statutory framework, the Family Law Section
has apparently given up and would rather return to a
case-based equitable system.

14.1. Replacement of Statutory Economic
Contribution
Formula with
Equitable
Remedy. Senator Harris has filed S.B. 866,
which replaces the statutory formula for
economic contribution with an equitable
remedy. Family Code Sections 3.402, which
defines the amount of economic contribution,
and 3.403, which creates a claim against one
marital estate in favor of another marital estate
for the amount of economic contribution, would
be repealed.

14.2.

Permissive Claim for Reimbursement.
Family Code Section 3.406 would be amended
to permit a claim for reimbursement, rather
than mandate a claim for economic
contribution.

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14.3.

Expansion of Reimbursement Criteria.
The
defmition
of the
elements
of
reimbursement claims contained in Family
Code Section 3.408 would be expanded.
Currently, those claims include payment by one
marital estate of the unsecured liabilities of
another marital estate and inadequate
compensation for the time, toil, talent, and

14.4.

Measure of R eimbursement.
The
reimbursement claim for funds expended by
one estate for improvements to another would
be measured by the enhancement in value to the
benefited estate.

14.5. Equitable Principles; Offsets. New Family
Code Section 3.411 would direct the court to
use equitable principles in determining
reimbursement claims, and to consider offsets
where appropriate, including offsets related to
the benefits of use and enjoyment of property
(consideration of such an offset is currently
prohibited by Section 3.403(e)).

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2009 Legislative Preview- Proposed Changes Affecting Texas Probate, Guardianship. and Trust Law

15. Not So Fast, My Friends ...

Page 15

to reverse the result in that case. The proposal
made no headway in the 2007 session.

15.1.

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Trust Decanting.
Many trusts already
contain a decanting provision that allows the
trustee to distribute the assets of a trust to
another trust for the benefit of the beneficiaries
of the trust. This is typically known as a
"decanting" provision . A popular change that
has been "sweeping the nation" is a statutory
decanting provision (for trusts without a
decanting provision).
Many of the new
provisions are designed to apply only in
situations where the trustee already has broad
discretion over distributions - akin to a "best
interests" standard. TBA would like to see such
a proposal to allow trustees to "clear out the
administrative deadwood" of older trusts.
REPTL has considered decanting proposals,
and likely will have its own proposal in the
2011 session, but for now would like the
opportunity to review what other states pass in
the meantime.

15.2. Revocable Trust Provisions. REPTL still
would like to add provisions regarding
revocable trusts to the Trust Code. However,
this project has been delayed because of
energies diverted to the Probate Code
Recodification project. The Uniform Trust
Code contains model provisions dealing with
some of these issues, but they require
significant revision for use in Texas where we
have many trusts with two settlers, i.e. . the
typical joint revocable trust created by spouses
that holds community property, and possibly
separate property of each spouse.

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15.3.

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15.4. Anti-Jarboe Amendment? An early-2007

-

Uniform Power of Attorney Act. In 2006,
the National Conference of Commissioners on
Uniform State Laws promulgated a new
Uniform Power of Attorney Act. REPTL is in
the process of studying this act with a view
towards a 20 11 proposal.
bankruptcy decision interpreting Texas law (the
Jarboe case) held that the exemption of IRA's
by Property Code Section 42.0021 did not
extend to inherited IRA's (other than spousal
IRA's). Most of us were surprised at this
interpretation, especially since the court paid lip
service to the strong Texas public policy
favoring debtors.
Members of the Texas
Academy drafted language during that session

REPTL considered this provision again for the
2009 legislative package, but declined to
include it because of the perceived lack of
consensus among its members. However, there
may be some other group that proposes this
change.

16. Conclusion.
While there are a number of changes that will be
proposed in the 2009 session, we expect that most
will pale in comparison to the 500 pound gorilla of
Probate Code Recodification. It may not make for
great cocktail-party banter, but it will affect all of us.

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Texas Academy of Probate and Trust Lawyers
Membership Application/2009 Dues Notice

-

List below the information to be included in the membership roster

Name

Firm or School/University

Address
--------------------------------~' Texas __________________

City

-

Zip

Fax Number

Telephone Number

E-Mail

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I prefer receiving information by:

0

E-Mail

D

Fax

0

U. S. Mail

Please Check the Appropriate Box(es):

Dues

0

Board Certified, Estate Planning and Probate Law,
Texas Board of Legal Specialization and/or

0
0
0

Fellow, American College ofTrust and Estate Counsel ............................................... ...... ..... $125.00
I am an Academician ..... ..... ............ ....... ............................................. .. ............................ ........ $75.00
I am currently a member of the Academy
P lease make your check payable to the Texas Academy of Probate and Trust Lawyers
and mail to the following address:

-

Texas Academy ofProbate and Trust Lawyers
%Tom Featherston, Treasurer
1114 S. University Parks Drive
Waco, TX 76798-7288

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If you have any questions, contact Al Golden, Academy Chair, at (512) 472-5675, or
aj g@ikardgolden.com.

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Files

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Citation

Gerry W. Beyer, “CLE: 2009: Courthouse Morals and Legislative Expectations: A Review of Recent Cases and Proposed Legislation Impacting Texas Estate Planners,” St. Mary's Law Digital Repository, accessed March 27, 2017, http://lawspace.stmarytx.edu/item/STMU_HomecomingCLE2009Beyer.

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