Estate, Guardianship, and Trust Law
By Lauren Davis Hunt
There were significant and numerous changes made by the 88th Texas Legislature affecting the law of decedents’ estates, guardianships, trusts, powers of attorney, and other related areas of the law. This article contains summaries of highlights only and should not be relied on as a complete list of bills affecting these areas or a full description of any bill. See the TexasBarCLE webcast “Legislative Update 2023: Estate and Trust Law” or the Legislative Update paper presented at the Advanced Estate Planning and Probate Course. The paper is also available on the REPTL.org website for Real Estate, Probate, and Trust Law Section members. All bills are effective September 1, 2023, unless otherwise noted.
SB 1373 changes references in the Estates Code so that notice that was previously required to be given by certified mail, return receipt requested, will now be given by “qualified delivery method,” which is a defined term and expands the types of delivery services that can be used in addition to USPS (i.e., FedEx, DHL, UPS). The chapter of the Estates Code governing multi-party accounts now expressly applies to brokerage accounts. Under certain circumstances, a court can now authorize a person with a felony to serve as executor of an estate. In certain Estates Code proceedings, when serving a minor with citation, the parent/guardian of minors under age 16 can now waive service (previously minors over age 12 had to be served and waiver was not an option). Minors over age 16 can waive their own service. Unsworn declarations can now be used in lieu of sworn oaths for persons to qualify as a personal representative of an estate. In an heirship application, the applicant is only to list the decedent’s property located in Texas. HB 3474 allows a person to apply for an emergency order for reimbursement (rather than just payment) of a decedent’s funeral/burial expenses and extends the deadline for filing an application for payment/reimbursement to nine months after death. HB 3474 is effective September 1, 2023, except Article 15, which was effective June 13, 2023; Sections 1.011, 2.014, 2.015, 2.018, and 2.019 effective October 1, 2023; Section 1.014 effective September 1, 2024; Section 1.015 effective October 1, 2024; Section 1.009 effective January 1, 2025; and Section 1.016 effective October 1, 2025.
GUARDIANSHIP AND PERSONS WITH DISABILITIES
SB 1457 changes references in the Estates Code from giving notice by “certified mail return receipt requested” to giving notice by “qualified delivery method” and expands the types of delivery services that can be used for giving notice of a proceeding. Attorneys ad litem can now accept service on behalf of proposed wards for pleadings filed after the initial petition is served on the proposed ward. A surviving parent serving as guardian of the estate can now appoint a successor guardian to serve if the parent dies, becomes incapacitated or resigns (prior law only allowed the surviving parent who is serving as guardian of the person or guardian of the person and estate to name a successor, but not a parent solely serving as guardian of the estate, and the statute did not apply if the parent resigned as guardian). A guardian of the person can now control up to $20,000 of the ward’s funds without getting a guardian of the estate appointed, but the guardian of the person must get a bond to cover the funds and must file an annual report of how the funds were used. The value of real property that can be sold on behalf of a minor or ward without the necessity of a guardian of the estate is increased from $100,000 to $250,000. Now a court can order a third party (such as a bank) to transfer the ward’s interest in a community property account to the guardian of the estate when the ward’s spouse refuses to make such transfer to the non-spouse guardian. A guardian of the person is now permitted to receive $3,000 annually, paid in monthly installments, as compensation. SB 1624 has a number of changes, including clarity regarding who can serve as guardian ad litem (it can’t be an interested person and usually can’t be the attorney ad litem), clarity of the role of the attorney ad litem, and what happens when a proposed ward or ward hires their own attorney, allowing a psychologist to perform a capacity exam for certain guardianships, updating the requirements for the guardian of the person’s annual report, requiring a court investigator or visitor in counties with statutory probate courts to do a report every three years, and it provides what is required for a restoration proceeding. The bill further increases training requirements for judges and court investigators dealing with guardianships and the ward’s bill of rights is updated to permit a ward to have private communications with a medical professional unless a court, after a hearing, orders such communications limited due to a risk of substantial harm to the ward or unduly burdening the medical professional. HB 266 requires the applicant in a guardianship to file with the court
(not the clerk) basic contact information for the persons entitled to notice of the guardianship proceeding. The contact information is to remain confidential and privileged except that the information is provided to the guardian upon appointment. In HB 3009, advanced practice registered nurses acting under a physician’s supervision can now prepare a Physician’s Certificate of Medical Examination, or PCME, that is signed by a supervising physician. In SB 944, procedures for committing an individual with an intellectual disability to a state supported living center are clarified.
HB 2196, effective June 9, 2023, clarifies that a revocable trust can qualify for homestead benefits if the trust uses the required language listed in either the Tax Code (where the beneficiary has a right to occupy the property “rent free and without charge”) or in the Property Code (where the beneficiary has the right to occupy the property “at no cost”). The bill clarifies that if a trust beneficiary holds a testamentary general power of appointment over trust property and does not exercise the power of appointment, then the trust property is not subject to creditors’ claims. The definition of “effective date” in the new rule against perpetuities statutes is modified to provide that the effective date of the trust (for purpose of starting the 300-year period) is the date the governing instrument creating an interest in the trust becomes irrevocable with respect to that interest (i.e. each successive trust governed by one trust instrument does not get a new 300-year vesting period). The bill clarifies that when decanting a trust, the new trust can keep the same name and employer identification number, or EIN, as the old trust. For a court to appoint an attorney ad litem in a trust proceeding, it must first find that representation of the minor or incapacitated beneficiary would otherwise be inadequate. In HB 2333, effective June 18, 2023, noncharitable trusts without an ascertainable beneficiary (also known as a “purpose trust”) are now permissible in Texas. These trusts can be set up for a special purpose (i.e. to carry on a business for employees, maintain a family compound, preserve collections, etc.), do not have beneficiaries, but do have trust enforcers who owe a fiduciary duty to ensure the trust purposes are met. In SB 801, a conveyance to a “trust” in a deed is now considered a conveyance to the trustee of the trust. A trust is not a legal entity that can own real property, so in the past, a conveyance to a trust rather than the trustee needed correction.
DURABLE POWERS OF ATTORNEY
In SB 1650, the court can now provide in an order appointing a permanent guardian that the ward’s durable power of attorney is merely suspended during the pendency of the guardianship rather than automatically revoked. In a Texas Estates Code § 751.251 proceeding where someone questions the actions of an agent under a durable power of attorney, the court can now award reasonable and necessary attorneys’ fees as deemed equitable and just, and the Department of Family Protective Services has standing to bring a Texas Estates Code § 751.251 action. Agents with powers over “business operation transactions” can now act with respect to business interests other than just partnerships (such as LLCs).
ANATOMICAL GIFTS AND DISPOSITION OF DECEDENTS’
In SB 2186, a person executing a statement of anatomical gift who is unable to sign the form themselves but has someone sign for them can now do so either before two witnesses or before a notary (in the past, if a person is signing for someone else, the form could only be signed before two witnesses, but a person signing for themselves could also sign before a notary). In SB 1300, the order and identity of persons who must consent to remove a decedent’s remains now conforms to the same list of persons who have the right to control the initial disposition of remains.
Statutory probate courts were added in the following counties: Bexar, Cameron, Harris, Montgomery, and Travis. In HB 1547, Chapter 3 of the Family Code regarding reimbursement claims (including reimbursement claims in probate proceedings) was substantially modified. See the “Family Law” discussion of HB 1547 for more detail.
LAUREN DAVIS HUNT is a partner in Osborne, Helman, Scott, Knisely & Stanton, where she practices trust and estate litigation. She serves as the chair of the Estates & Trusts Legislative Affairs Committee with the Texas Real Estate and Probate Institute, or T-REP, as well as for the Real Estate, Probate & Trust Law Section of the State Bar of Texas, or REPTL.