Legislative Update
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.
DECEDENTS’ ESTATES
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.
TRUSTS
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’
REMAINS
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.
MISCELLANEOUS
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.