William D. Pargaman 2015-08-25 10:05:09
For additional information on statutory changes and a more-detailed version of these materials, including a list of effective dates, go to the author’s firm website at snpalaw.com/resources/2015legislativeupdate. Disclaimers The Texas Uniform Disclaimer of Property Interests Act (HB 2428) is a “Tex-ified” version of the uniform act proposed by the Real Estate, Probate & Trust Law Section of the State Bar of Texas, found in new Chapter 240 of the Property Code (more information at texasprobate.com). Highlights include elimination of the nine-month deadline for disclaimers for state law purposes, provisions allowing fiduciaries to disclaim in certain circumstances, and more relaxed rules for delivering or filing disclaimers. Decedents’ Estates The REPTL decedents’ estate bill (SB 995)1 contained a number of miscellaneous changes. Wills may now be modified or reformed to accomplish the testator’s tax objectives, qualify for government assistance, or correct a scrivener’s error. The scrivener’s error ground requires a higher burden of clear and convincing evidence. If the executor files an affidavit in lieu of inventory, copies no longer need to be sent to beneficiaries who weren’t required to receive the Chapter 308 notice. Rules voiding provisions in favor of ex-spouses are extended to revocable pour-over gifts to trusts, powers of appointment, and account designations. Several changes apply to wills executed outside Texas. Self-proving affidavits conforming to the law of the state of the testator’s domicile at the time of execution were recognized in 2011, and this has been extended to the law of the state where the will is executed or the testator has a residence. If a will has been probated elsewhere within four years of death, it may be probated and an administration opened here more than four years after death. The definition of a payable-on-death account is expanded to include a transfer-on-death account, and a guardian or agent under a financial power of attorney is allowed to sign a POD agreement. If you use the one-step, self-proving affidavit, the verb tense is corrected in several places. When filing the Ch. 308 affidavit or attorney’s certificate of notice to beneficiaries, you no longer need to include the beneficiaries’ addresses. Another bill (HB 3136) requires small-estate affidavits to identify the assets that are considered exempt. “Homestead” and “exempt property” are limited to property that would be eligible to be set aside during an estate administration. Guardianships The REPTL guardianship bill (HB 1438) also featured several miscellaneous changes. An existing bond will remain in effect while a guardianship is transferred to another court. If there is no guardianship estate, costs may be assessed against a Chapter 1301 management trust. An interested person wishing to intervene in a guardianship proceeding must file a timely motion, serve all parties, state the grounds for intervention, and attach a pleading setting forth the purpose. The court has discretion to grant or deny the motion. The verb tense of the one-step, self-proving affidavit in a guardianship declaration is corrected. The family member exception for criminal background checks for proposed guardians is eliminated, so only attorneys are exempt from those background checks. Provisions have been added facilitating the creation of safekeeping agreements prior to a guardian’s qualification. The duration of a temporary guardianship pending a contest is limited to nine months, unless renewed following a hearing. All management trustees, not just those with existing guardianships, must file an initial report of assets within 30 days of creation of the trust. A court may appoint an ad litem to sell property of a minor without a parent, guardian, or ward whose guardian is appointed by a court outside Texas. And court investigators may compel discovery of a customer’s financial information. Judges will be randomly assigned to hear recusal motions. Following recusal of a statutory probate judge, the presiding statutory probate judge will assign a new judge. The judge hearing a recusal motion may assess attorneys’ fees and expenses if the judge determines the motion was groundless and filed in bad faith or for the purpose of harassment or clearly brought for unnecessary delay without sufficient cause. A movant may be enjoined from filing further recusal motions without the consent of the presiding statutory probate judge. The Texas Judicial Council Elders Committee and the Texas Working Interdisciplinary Network of Guardianship Stakeholders proposed HB 39 to foster the imposition of the least restrictive alternative on a ward or proposed ward. Numerous existing alternatives to guardianships are listed in the statute. An incapacitated person subject to a limited guardianship is presumed to retain capacity to make personal decisions regarding the person’s residence. “Supports and services” are defined as resources and assistance that enable an individual to meet basic needs, manage health and finances, and make certain personal decisions. An attorney ad litem should investigate and discuss alternatives that might avoid the need for a guardianship or if certain powers of the guardian should be limited. A guardian ad litem should investigate the need for a guardianship and evaluate alternatives and supports and services. Any information gathered by the guardian ad litem is subject to court examination. An attorney for the applicant in a guardianship proceeding must now complete the four-hour ad litem certification course, with one hour devoted to alternatives and supports and services. An application for a guardian must state whether alternatives and supports and services were considered, whether any are available and feasible, and whether the proposed ward’s right to make residence decisions should be terminated. A physician’s certificate must state whether any improvement in the ward’s condition is possible, and if so, when the ward should be reevaluated. If that time is less than one year, the order must include a deadline for the updated certificate. The court must make a reasonable effort to consider a proposed ward’s preferred guardian. The court’s order must find by clear and convincing evidence that alternatives and supports and services were considered, but were not feasible, and must specifically state any rights retained by the ward and whether supports and services are needed to exercise those. Finally, absent an emergency, a guardian of the person must obtain court approval to place a ward in a more restrictive care facility. SB 1881 facilitates the use of “supported decision-making agreements,” a less restrictive alternative to guardianship for adults who are not “incapacitated” but need assistance with daily living decisions. These authorize a “supporter” to provide supported decision-making without deciding on behalf of the adult; assist the adult in accessing and understanding relevant information; and assist the adult in communicating decisions. (Note that the language of SB 1881 is also included in HB 39.) SB 1882 adds a ward’s bill of rights to new Estates Code Section 1151.351. Other REPTL Proposals The REPTL decedents’ estates bill clarifies that the “other” exempt property to be set aside after an inventory is filed and approved means the homestead and property listed in Property Code Section 42.002(a). The REPTL exempt property bill (HB 2706) increases exempt tangible personal property value limits from $30,000 for a single person and $60,000 for a family to $50,000 and $100,000, respectively (accounting for inflation since 1991). The REPTL TUTMA bill (SB 1202) increases the amount a fiduciary or obligor may transfer to a TUTMA custodianship from $10,000 or $15,000 to $25,000. And the REPTL disposition of remains bill (HB 3070) adds executors and administrators to the end of the list of persons with the right to control the disposition of remains. Any of the listed persons is authorized to seek reimbursement from the decedent’s estate. The statutory form for designating agents becomes permissive, any authority granted in that form to a spouse terminates upon dissolution of the marriage, and appointments are valid without the agents’ signatures, although an agent must sign before exercising the authority to dispose of the remains. Trusts The Texas Bankers Association proposed a bill related to directed trusts (HB 3190). Current Section 114.003 will become applicable only to charitable trusts, while all others will be subject to new Section 114.0031. A person with authority to direct, consent to, or disapprove a trustee’s investment, distribution, or other decision is considered a fiduciary, unless the trust provides otherwise. A trustee acting in accordance with those directions is not liable for the consequences absent willful misconduct on the part of a trustee. A trustee is not liable for following the directions just because it knows of willful misconduct on the part of the adviser, nor is a trustee liable for any act resulting from the adviser’s failure to provide a required consent after a request is made by a trustee, except in cases of the trustee’s willful misconduct or gross negligence. Further, a trustee who does not receive the requested consent is not liable for ordinary negligence stemming from any decision it makes without that consent. A trustee has no duty to monitor the adviser’s conduct, provide advice to or consult with the adviser, or communicate with or warn any beneficiary or third party. Absent clear and convincing evidence, a trustee’s acts within scope of the adviser’s authority are presumed administrative only. Advance Directives Several minor changes in the terminology used in a directive to physicians were enacted by HB 3074, so revise your forms. A more substantive change is that following a determination that life-sustaining treatment is medically inappropriate, the patient or surrogate may request a 10-day extension in many situations to seek out another facility that will provide the treatment. Access to Probate and Estate Planning Initiative Several bills were passed as part of an initiative to increase access to probate and estate planning for those having difficulty paying legal fees (more information at texasatj.org). HB 705 provides a simplified process for obtaining an intestate’s bank account and HB 831 provides a simplified process for a surviving spouse to obtain information about the mortgage on a homestead. Financial institutions must now make certain disclosures to the customer regarding nontestamentary accounts when an account is opened (SB 1791). A TOD deed has been authorized based on the Uniform Real Property Transfer on Death Act (SB 462). And the Texas Supreme Court has been directed to promulgate forms for small estate affidavits, muniment of title pleadings, and simple wills for married and single individuals with adult, minor, or no children (SB 512). (SB 478 is a similar bill relating to the promulgation of simple landlord-tenant forms.) Note 1). The REPTL decedents’ estates and guardianship bills incorporated additional non-REPTL proposals by the time they passed.
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